U.S. District Judge James "Jeb" Boasberg has quashed Justice Department subpoenas targeting Federal Reserve Chair Jerome Powell, writing in a newly unsealed opinion that a "mountain of evidence" pointed to an improper purpose behind the probe and that the government produced "essentially zero evidence" to suspect Powell of any crime.
The ruling, contained in court documents unsealed Friday, torches a criminal investigation launched by DC U.S. Attorney Jeanine Pirro into matters she described as involving false statements to the government and a fraud charge.
Pirro held a news conference Friday afternoon to announce the Justice Department will appeal.
Boasberg, an appointee of former President Barack Obama, concluded 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."
According to reports by Axios, the judge wrote that DOJ put forward "only a tenuous assertion of a legitimate purpose" and could not spell out the discrepancies in Powell's testimony that had supposedly justified the criminal probe. Then he twisted the knife.
"Searching for any reason to suspect that Powell might have lied to Congress, the only one the Court can descry is that he testified at a hearing. The Government might as well investigate him for mail fraud because someone once saw him send a letter."
Boasberg also wrote that even if no court had previously addressed this kind of conduct, the principle still held.
"Even if nobody has tried that before, a novel improper purpose is improper all the same."
Pirro wasted no time responding. At a hastily scheduled news conference Friday, she denied any political motivation and pushed back hard against the judge's reasoning.
"Politics is not the lane I'm in right now. We are focused on the law. We're focused on the people of the District. We are not focused on politics."
She characterized Boasberg's ruling as shielding Powell from scrutiny, saying the judge had determined that Powell is "beyond reproach." She then escalated her rhetoric.
"This is the antithesis of American justice."
And she was not finished. Pirro told reporters that Boasberg had effectively walled off the grand jury process, saying, "This judge has put himself at the entrance door to the grand jury, slamming that door shut." She stressed that the investigation concerns false statements and a fraud charge, and that it would be up to a grand jury to decide what, if any, charges to bring.
The ruling now ripples directly into President Trump's plans for the Fed. Powell's term as chair expires in May, and Trump in January nominated former Fed Governor Kevin Warsh to run the central bank. But Republican Sen. Thom Tillis, a key vote on the Senate Banking Committee that would confirm the nomination, has said the committee should not consider a vote until the criminal probe of Powell is resolved.
In a statement Friday, Tillis described the probe bluntly.
"Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair."
Tillis called the probe "nothing more than a failed attack on Fed independence." With Republicans holding a slim majority on the Banking Committee, they need Tillis on board to confirm Warsh. Pirro's pledge to appeal now threatens to stretch the timeline past Powell's May expiration, leaving the Fed leadership question unresolved at exactly the moment the administration wants a new chair in place.
The Board of Governors of the Federal Reserve challenged the subpoenas in court in February in secret proceedings that only became public when documents were unsealed Friday. Powell was served with a subpoena in early January. A few days after that, Powell released a video calling out the investigation as an affront to the Fed's independence.
Boasberg has history with the administration. His rulings in an immigration case put the administration on the defensive and led him to pursue a contempt inquiry into officials who may have violated his orders. Trump called for the judge to be impeached over that case, which prompted Chief Justice John Roberts to issue a rare rebuke, saying that litigants should instead be appealing adverse rulings. A judicial complaint filed by the Justice Department against Boasberg last year was later dismissed.
Pirro said the DOJ will appeal. That appeal will land before a circuit court whose identity has not been publicly confirmed in the unsealed materials. No charges have been filed against Powell; Pirro said the grand jury would make that determination. The administration is also separately pursuing a case at the U.S. Supreme Court to push out Fed Governor Lisa Cook, who was appointed by then-President Joe Biden.
The practical question is whether this appeal advances a legitimate investigation or simply delays a confirmation the administration says it wants. Tillis has already answered that question for himself. Investigators have not publicly detailed the specific discrepancies in Powell's testimony that triggered the probe, and Boasberg wrote that the DOJ could not spell them out for the court either.
If the Justice Department wants to prove this probe is about the law and not leverage, the appeal is where it will have to show its work.
