WASHINGTON — A federal judge on Friday quashed Justice Department subpoenas issued to the Federal Reserve in January, a severe blow to an investigation that has already attracted strong criticism on Capitol Hill.
Judge James Boasberg said that a “mountain of evidence suggests” that the purpose of the subpoenas was simply to pressure the Fed to cut its key interest rate, as President Donald Trump has repeatedly demanded.
Fed Chair Jerome Powell revealed the investigation Jan. 11, prompting Sen. Thom Tillis, a North Carolina Republican to block consideration of Trump’s pick to replace Powell as Fed chair when his term expires May. 15.
Boasberg said in his ruling that the case “thus asks: Did prosecutors issue those subpoenas for a proper purpose? The Court finds that they did not.”
“There is 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,” he wrote.
U.S. Attorney Jeanine Pirro, who issued the subpoenas, said at a news conference Friday that she would appeal the ruling.
She said an “activist judge” has quashed the subpoenas, and has “neutered the grand jury’s ability to investigate crime” and leaves Powell “bathed in immunity.”
“This is wrong and it is without legal authority,” she said.
Tillis said the ruling confirmed “just how weak and frivolous the criminal investigation of Chairman Powell is.” Tillis has vowed to blockade all Federal Reserve nominees, including that of Kevin Warsh, whom Trump has nominated to be the next Fed chair, until the criminal probe into Powell is dropped.
“We all know how this is going to end and the D.C. U.S. Attorney’s Office should save itself further embarrassment and move on,” Tillis said Friday. “Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.”
AP Writers Michael Kunzelman, Alanna Durkin Richer, and Seung Min Kim contributed to this report.
