WASHINGTON (AP) — 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.
The investigation into testimony last June by Chair Jerome Powell about a $2.5 billion building renovation has also delayed Senate consideration of Kevin Warsh, President Donald Trump’s pick to replace Powell when his term ends May 15.
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Judge James Boasberg said that the government has “produced essentially zero evidence to suspect Chair Powell of a crime” and called its justifications for the subpoenas so “thin and unsubstantiated” that they were simply a pretext to force Powell to cut rates, as Trump has repeatedly demanded.
“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.
The ruling blocks U.S. Attorney Jeanine Pirro, who issued the subpoenas, from obtaining records from the Fed related to the building renovation. Pirro blasted the ruling at a news conferecne and said she would appeal it.
Pirro 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.”
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“This is wrong and it is without legal authority,” she said.
Powell revealed the investigation in an unprecedented video Jan. 11, prompting Senator Thom Tillis, a North Carolina Republican and member of the Banking committee, to block consideration of Warsh until the investigation is dropped.
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.
