A federal judge has quashed two Justice Department subpoenas targeting the Federal Reserve, the Wall Street Journal reported Friday, delivering a significant legal victory to the central bank and a serious setback to the criminal probe that U.S. Attorney Jeanine Pirro had opened into Fed Chair Jerome Powell.
U.S. District Judge James Boasberg, whose ruling was unsealed Friday, found the subpoenas to be improper. The Obama-appointed judge wrote that the record showed the subpoenas’ primary purpose was to pressure Powell into either capitulating to the President’s wishes or stepping aside in favor of a more compliant successor.
“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,” the judge wrote.
Pirro, a longtime Trump ally, had launched the investigation to scrutinize whether Powell provided false congressional testimony last summer regarding the Fed’s building-renovation project. The probe drew an extraordinary public rebuttal from Powell himself, who in a January 11 video statement characterized it as a transparent pretext for the administration’s broader campaign to subordinate the Fed to White House control and force interest rates lower.
The Journal had previously reported that the Fed was waging a quiet legal fight against the subpoenas, a battle that unfolded entirely out of public view due to the secrecy requirements governing grand jury proceedings.
The move could clear the way for Kevin Warsh to be confirmed by the Senate as the next chairman of the Federal Reserve. Sen. Thom Tillis (R-NC) has said he would not vote for confirmation until the investigation had been set aside.
Pirro said the ruling lacked legal authority and put Powell beyond the reach of the law. She said she plans to appeal the decision.
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