A federal judge in Washington has declined to reverse his earlier decision blocking subpoenas in a criminal investigation targeting Federal Reserve Chair Jerome Powell, potentially setting the stage for an appeal that could complicate President Trump’s plans to install new leadership at the central bank.
Chief U.S. District Judge James Boasberg of the District of Columbia turned down the Justice Department’s request to reconsider his previous ruling on Friday, which had effectively put a stop to the criminal investigation into Powell.
In his March 13 decision, Boasberg concluded that subpoenas sent to the Federal Reserve’s Board of Governors in January were issued with the inappropriate goal of forcing Powell to comply with Trump’s demands to quickly reduce interest rates or step down from his position.
The subpoenas came from Jeanine Pirro, Washington D.C.’s chief federal prosecutor and strong Trump supporter, who requested details about budget overruns during renovations at the Federal Reserve’s headquarters building and Powell’s congressional testimony regarding the project last year.
This decision represents another win for Powell in his ongoing conflict with Pirro’s office over the investigation, which he has characterized as a pretense for Trump to expand his control over the Fed and monetary policy decisions.
Pirro has committed to pursuing the investigation further and indicated her office plans to file an appeal with the U.S. Court of Appeals for the D.C. Circuit. A source with knowledge of the situation confirmed that Justice Department leadership supports moving forward with the appeal.
The appeal process could postpone the confirmation of Kevin Warsh, Trump’s nominee to replace Powell as Fed chair. Republican Senator Thom Tillis, who serves on the Senate Banking Committee and has criticized the Powell investigation, has promised to continue blocking Warsh’s nomination throughout any appeal proceedings.
Powell has committed to remaining at the central bank until the investigation concludes.
Federal prosecutors have indicated they are examining Powell for possible fraud charges and making false statements to a congressional committee. However, a senior attorney from Pirro’s office admitted during a March 3 court hearing that prosecutors currently lack knowledge of what evidence exists to support criminal charges against Powell, according to court records.
Pirro’s office encountered a significant legal challenge in attempting to persuade Boasberg to overturn his previous ruling, needing to demonstrate either the emergence of new evidence or that the judge committed a substantial legal mistake.
Justice Department attorneys contended that Boasberg established an unreasonably high threshold for prosecutors during the preliminary phases of an investigation and misunderstood the investigation’s timeline.
Legal representatives for the Fed’s Board of Governors maintained that Boasberg’s original decision was supported by “overwhelming evidence.”
