(CNN) — A federal judge has quashed subpoenas the Justice Department had issued against Federal Reserve Chair Jerome Powell, according to court documents unsealed Friday.
The ruling is a major blow to President Donald Trump, who has repeatedly criticized Powell for not lowering interest rates, and an embarrassing setback for the D.C. U.S. attorney, Jeanine Pirro, who launched the probe. Pirro slammed the opinion in a hastily scheduled news conference Friday, saying she plans to appeal.
U.S. District Judge James “Jeb” Boasberg wrote in the new opinion that a “mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning.”
“On the other side of the scale, the Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual,” Boasberg said.
The federal probe underscores the Trump administration’s intense pressure campaign against Powell and the Fed in a bid to get the politically independent central bank to lower interest rates.
Trump continues to insult Powell on social media and his administration is currently trying to push out Fed Governor Lisa Cook, appointed by then-President Joe Biden, in a landmark case at the U.S. Supreme Court.
Powell had stayed mostly mum in the face of Trump’s attacks, but just a few days after he was served with a subpoena in early January, the Fed chief released a remarkable video calling out the investigation as an affront to the Fed’s independence.
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.
With Republicans having a slim majority in the Senate Banking Committee, which approves Fed chair nominations, Republicans need Tillis on board with confirming Warsh. In a statement Friday, Tillis described the probe as “nothing more than a failed attack on Fed independence.”
“Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair,” he wrote.
Remarkable news conference
Friday afternoon, Pirro said the Justice Department will appeal the judge’s ruling and denied claims the investigation is politically motivated.
“Politics is not the lane I’m in right now,” Pirro told reporters during a remarkable news conference protesting Boasberg’s ruling. “We are focused on the law. We’re focused on the people of the District. We are not focused on politics.”
Pirro said that Boasberg determined that Powell is “beyond reproach.”
“This is the antithesis of American justice,” Pirro said, later adding, “This judge has put himself at the entrance door to the grand jury, slamming that door shut.”
The investigation concerns false statements to the government as well as a fraud charge, Pirro said, stressing that it would be up to the grand jury to decide what if any charges to bring.
Boasberg, an appointee of former President Barack Obama, has been a particular thorn in Trump’s side over the last year after his rulings in a high-stakes immigration case put the administration on the defensive for months and resulted in the judge’s decision to pursue a contempt inquiry into officials who may have violated his orders in that matter.
Trump’s calls for the judge to be impeached over his actions in that case led to a rare rebuke from Chief Justice John Roberts, who said that litigants should instead be appealing adverse rulings.
A judicial complaint filed by the Justice Department against the judge last year was later dismissed.
‘A novel improper purpose is improper all the same’
The Board of Governors of the Federal Reserve had challenged the subpoenas in court in February, with secret proceedings that only became public Friday.
In his ruling, Boasberg 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.”
Acknowledging there was not an on-point case to guide his ruling, Boasberg wrote, “Even if nobody has tried that before, a novel improper purpose is improper all the same.”
Boasberg recounted the president’s public attacks against Powell and the earlier investigatory moves to probe him. He said that the “facts strongly imply that this investigation was launched for an improper purpose, as were the resulting subpoenas.”
According to Boasberg, the Justice Department put forward “only a tenuous assertion of a legitimate purpose” for its investigation and that DOJ could not spell out the discrepancies in Powell’s testimony that had justified the criminal probe.
“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,” the opinion said.
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