Judge Nixes DOJ Subpoenas for Fed Chair Powell
A federal judge has nullified subpoenas that the Justice Department had issued against Federal Reserve Chair Jerome Powell, as revealed in court documents unsealed on Friday. The ruling represents a significant setback for President Donald Trump, who has consistently voiced his discontent with Powell’s refusal to lower interest rates, and it serves as an embarrassing moment for DC US attorney Jeanine Pirro, who initiated the investigation. Pirro criticized the opinion, stating her intention to appeal. US District Judge James “Jeb” Boasberg stated in the recent opinion that a “mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning.” Boasberg stated that “On the other side of the scale, the Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual.” The federal investigation highlights the Trump administration’s aggressive pressure tactics aimed at Powell and the Fed, seeking to influence the politically independent central bank to reduce interest rates. Trump persists in his derogatory remarks about Powell on social media, while his administration is actively working to remove Fed Governor Lisa Cook, who was appointed by former President Joe Biden, in a significant case before the US Supreme Court.
Powell had remained largely silent in response to Trump’s criticisms, but shortly after receiving a subpoena in early January, the Fed chief issued a striking video denouncing the investigation as a violation of the Fed’s independence. Powell’s term as chair is set to expire in May, while Trump nominated former Fed Governor Kevin Warsh to lead the central bank in January. However, Republican Sen. Thom Tillis, an influential member of the Senate Banking Committee responsible for confirming the nomination, has stated that the committee should refrain from voting until the criminal investigation involving Powell is concluded. Given the narrow majority held by Republicans in the Senate Banking Committee, which is responsible for approving Fed chair nominations, it is essential for Republicans to secure Tillis’s support for the confirmation of Warsh. In a statement Friday, Tillis characterized the investigation as “nothing more than a failed attack on Fed independence.” He stated “Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.” On Friday afternoon, Pirro stated that the Justice Department intends to appeal the judge’s ruling and refuted allegations that the investigation is driven by political motives. “Politics is not the lane I’m in right now,” Pirro stated. “We are focused on the law.” Our attention is directed towards the residents of the District. “We are not focused on politics.” Pirro stated that Boasberg concluded that Powell is “beyond reproach.” Pirro stated “This is the antithesis of American justice,” later emphasizing, “This judge has put himself at the entrance door to the grand jury, slamming that door shut.”
The investigation involves false statements made to the government alongside a fraud charge, Pirro stated, emphasizing that the decision on any potential charges rests with the grand jury. Pirro’s conference occurred against a backdrop of growing apprehension regarding Trump’s attempts to utilize his Justice Department as a tool against his political opponents. Trump recently conveyed his frustration to prosecutors regarding their failure to present viable cases against his adversaries. Attorney General Pam Bondi has faced criticism for her management of the Epstein documents. Pirro’s confrontational and resolute press conference seemed tailored for a singular audience – a president who may be in search of his next attorney general. Boasberg, an appointee of former President Barack Obama, has been a significant challenge for Trump over the past year. His rulings in a high-stakes immigration case placed the administration on the defensive for months and led to the judge’s decision to initiate a contempt inquiry into officials who may have violated his orders in that matter. Trump’s calls for the judge to be impeached over his actions in that case prompted a rare rebuke from Chief Justice John Roberts, who stated that litigants should instead be appealing adverse rulings. A judicial complaint lodged by the Justice Department against the judge last year was subsequently dismissed.
The Federal Reserve’s Board of Governors contested the subpoenas in court back in February, with the proceedings remaining confidential until they were made public on Friday. In his ruling, Boasberg determined that the subpoenas were issued for “the improper purpose of harassing and pressuring Powell to push the Fed to lower interest rates or to resign and make way for a more pliant Chair.” Recognizing the absence of a directly relevant case to inform his decision, Boasberg stated, “Even if nobody has tried that before, a novel improper purpose is improper all the same.” Boasberg detailed the president’s public criticisms of Powell and the prior investigative efforts aimed at him. He stated that the “facts strongly imply that this investigation was launched for an improper purpose, as were the resulting subpoenas.” Boasberg stated that the Justice Department presented “only a tenuous assertion of a legitimate purpose” for its investigation, noting that the DOJ was unable to clarify the discrepancies in Powell’s testimony that warranted the criminal probe. “In the quest for any indication that Powell may have misled Congress, the sole factor the Court can discern is that he provided testimony at a hearing.” The opinion stated “The Government might as well investigate him for mail fraud because someone once saw him send a letter.”
