A federal judge on Friday quashed Justice Department subpoenas issued to the Federal Reserve in January, a decision that knocked down a criminal investigation aimed at Fed Chair Jerome Powell and has already drawn criticism from lawmakers. Judge James Boasberg said the government’s justification for the subpoenas was unsupported, and he also blocked U.S. Attorney Jeanine Pirro from obtaining Fed records related to a large construction project.
Boasberg ruled that prosecutors had produced “essentially zero evidence to suspect Chair Powell of a crime,” and he described their rationales for the subpoenas as “thin and unsubstantiated.” In his view, the subpoenas were simply a pretext to force Powell to make political concessions, writing that there was “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will.”
The subpoenas targeted materials tied to testimony Powell gave last June before the Senate Banking Committee. The investigation, according to the report, focused on Powell’s statements concerning a Federal Reserve building renovation that has been reported as costing about $2.5 billion, and with federal prosecutors asserting there were issues involving possible misconduct and false statements connected to cost overruns and earlier renovation plans.
The Associated Press report said the most recent estimates from the Fed place the renovation’s current estimated cost at $2.5 billion, about $600 million higher than a 2022 estimate of $1.9 billion. The reporting also described that Powell disputed at the time that the renovation included certain amenities, including “rooftop gardens … VIP elevators” and other features, while administration officials asserted earlier plans included some of those items.
Pirro said the judge’s ruling was wrong and told reporters she planned to appeal, taking issue with what she described as the decision’s effect on the government’s ability to pursue the investigation. She characterized Boasberg as an “activist judge” and said the ruling “neutered the grand jury’s ability to investigate crime“ and left Powell “bathed in immunity.” Boasberg’s ruling, the report said, prevents Pirro from obtaining Fed records related to the renovation, and Pirro said she would seek to undo that result.
In a separate development tied to the broader political fight over the Fed, the report said the Justice Department probe has also complicated Senate action on Trump’s choice to replace Powell as chair. Trump’s nominee, Kevin Warsh, is the person the Senate is considering to take over when Powell’s term as chair ends May 15, but the investigation into Powell’s testimony has delayed that process, according to the report.
Boasberg’s decision also said he had offered the government a path to submit further evidence directly to the judge without having to disclose investigative information publicly to the Fed and Powell. The government declined that approach, leaving Boasberg to conclude the court had “no credible reason to think that the Government is investigating suspicious facts as opposed to targeting a disfavored official.”
The report described how the investigation began gaining traction after Powell disclosed it in an unprecedented video on Jan. 11, prompting Sen. Thom Tillis, a North Carolina Republican and a member of the Senate Banking Committee, to block consideration of Warsh until the criminal probe was dropped. Tillis later said the ruling confirmed “just how weak and frivolous the criminal investigation of Chairman Powell is,” and he reiterated that he would not support Warsh until the investigation is completed.
As Senate Republicans hold a 13-11 majority on the committee, Tillis can block Warsh’s nomination from being forwarded to the Senate if all Democrats vote against it, according to the report. Powell can remain as chair past May 15 if no replacement is approved, the report said.
The court dispute comes amid other legal battles involving Trump’s efforts concerning the Fed. The Associated Press report said Trump sought to fire Lisa Cook, a member of the Fed’s governing board, after a member of his administration accused her of mortgage fraud, though no charges were filed, and the Supreme Court blocked Cook’s firing for now. The report also described the judge, Boasberg, as having clashed with the White House on other matters since Trump returned to office, including efforts to remove him from a high-profile case in Washington.