Judge says DOJ had “essentially zero evidence” against Fed chair Powell

In a sealed proceeding earlier this month that later became public through a transcript, a federal prosecutor conceded he did not yet have evidence that Federal Reserve Chair Jerome Powell committed a crime connected to the central topics of the Justice Department’s investigation. Chief Judge James Boasberg, in a March 11 ruling, quashed the government’s subpoenas to the Federal Reserve, concluding that prosecutors had not produced the evidentiary basis they needed to continue.

The transcript shows Boasberg pressed Assistant U.S. Attorney Andrew Massucco, who works in U.S. Attorney Jeanine Pirro’s Washington office, on whether prosecutors had any evidence of fraud or criminal misconduct tied to Powell’s testimony about a $2.5 billion renovation project. When the judge asked what false statements Powell made before Congress, Massucco replied, “Well, we don’t know is my first answer,” according to the transcript, adding that “there are certain areas that he addressed that caused concern.”

Boasberg then asked the prosecutor what evidence existed of fraud or criminal misconduct in relation to the renovations themselves. Massucco said, “Again, we do not know at this time,” while pointing to the scale of the project’s cost overruns, saying, “However, there are 1.2 billion reasons for us to look into it.”

Boasberg’s March 11 order rejected the subpoenas issued to the Fed, characterizing the government’s showing as insufficient. In the ruling, the judge said the government produced “essentially zero evidence” to suspect Powell of a crime and described the prosecutors’ justification as “thin and unsubstantiated.” The ruling also reflects that the court rejected a proposal by the government to submit further evidence against Powell directly to the judge.

According to the transcript of the March 3 hearing, the judge asked for specifics about any supposed evidence of wrongdoing tied to Powell’s congressional testimony or to the renovation work itself. The sealed hearing occurred before the judge’s later decision quashing the subpoenas, which came eight days after the proceeding.

The investigation focuses on brief testimony last June by Powell before the Senate Banking Committee, when he was asked about cost overruns on the Federal Reserve’s extensive building renovations. The most recent Fed estimates place the current projected cost at $2.5 billion, which the transcript-linked account says is about $600 million higher than a 2022 estimate of $1.9 billion.

In court, Robert Hur, an attorney who represented the Federal Reserve board of governors, argued that the subpoenas were not grounded in evidence of criminal conduct. Hur told the judge that the subpoenas were part of a pressure campaign to support President Donald Trump’s push for lower interest rates, according to the transcript.

Massucco, during the sealed hearing, also addressed prosecutors’ motive, saying there was no evidence that the motive behind the subpoenas was “anything other than trying to find the truth of the matter.” He added, “And we have a right to do that,” according to the transcript.

Pirro, who was nominated to lead the nation’s largest U.S. Attorney’s office after being U.S. attorney in Washington, criticized Boasberg and said the judge had limited the grand jury’s ability to investigate. She derided him as an “activist judge” and said he had “neutered the grand jury’s ability to investigate crime,” according to the account of her remarks at a news conference earlier this month, and vowed to appeal Boasberg’s decision.

The dispute also bears on timing around Powell’s leadership at the Federal Reserve. The transcript-linked account says the investigation delayed Senate consideration of Kevin Warsh, Trump’s pick to replace Powell when his term ends May 15, while Powell can remain in the role past that date if no replacement has been approved.

In his ruling, Boasberg wrote that the government’s subpoena strategy left him without a “credible reason” to think the investigation targeted suspicious facts rather than a “disfavored official,” according to the transcript-linked summary of the decision.