A federal judge on Friday denied the Justice Department’s motion to reconsider his quashing of subpoenas related to an investigation of Federal Reserve Chair Jerome Powell.
“The standard for reconsideration is a demanding one: the movant must show that there has been an intervening change in controlling law, new evidence, or a need to correct clear error or prevent manifest injustice,” Judge James Boasberg of the U.S. District Court for the District of Columbia wrote Friday.
Boasberg last month concluded that the subpoenas’ “dominant (if not sole) purpose is to harass and pressure Powell” into either lowering interest rates or resigning to make way for a successor who would.
Boasberg doubled down Friday, citing the DOJ’s “total lack of a good-faith basis.” The judge said the government’s arguments for reconsideration “do not come close to convincing the Court that a different outcome is warranted.”
“The Government’s fundamental problem is that it has presented no evidence whatsoever of fraud,” Boasberg wrote Friday.
The DOJ earlier asserted it was trying to discern whether Powell lied during testimony to Congress last June on over-budget renovations at two Fed buildings.
In its latest argument, the DOJ said Boasberg applied the wrong legal standard to the case and is unfairly limiting the government’s authority to seek evidence of a crime. Boasberg held, though, that that’s moot if the subject is being investigated for an improper purpose.
The DOJ argued its subpoenas were “directed solely” to the Federal Reserve’s board of governors, and not to Powell personally.
Boasberg dismissed that notion.
“The implication seems to be that these subpoenas therefore cannot have been meant to pressure Powell. Yet one subpoena asked for records about Powell’s testimony to see whether he was guilty of lying to Congress. The other sought records about the Board’s renovations whose high costs [President Donald Trump] has repeatedly tried to pin on Powell,” Boasberg wrote. “No matter whom the subpoenas were addressed to, then, it was clear whom they sought dirt on: Powell.”
A spokesperson for Jeanine Pirro, the U.S. Attorney for the District of Columbia, said the office would “absolutely appeal the judiciary’s interference with our access to the grand jury.” That most likely puts the case in the hands of the D.C. Circuit Court of Appeals.
The Fed, meanwhile, declined to comment. However, in a court filing made public March 26, the central bank asserted that Trump “has been waging a pressure campaign against Chair Powell for years in order to try to force interest rates lower, and he has been directing prosecutors to target his enemies throughout his second term.”
The ongoing case may present a speed bump in Trump’s timeline to confirm a successor to Powell in leading the Fed. The president’s nominee for the post, former Fed Gov. Kevin Warsh, is set to appear April 16 at a hearing with the Senate Banking Committee, according to Politico. Yet at least one Republican on the panel, Sen. Thom Tillis of North Carolina, has repeatedly said he would not vote to confirm any Fed nominee until the Powell investigation is over.
Such a move would prevent any Fed nomination from moving to the full Senate, assuming all 11 committee Democrats vote against the nominee.
Tillis last month said Warsh “possesses impeccable credentials and a clear vision for maintaining the Fed’s independence” but castigated Pirro’s office, saying it “should save itself further embarrassment and move on” from the Powell investigation.
Trump, however, showed support for the investigation after Boasberg’s initial March 13 ruling, saying “there is criminality” in the Fed’s over-budget renovations.
“All I want to do is bring out to the public that this guy is incompetent, he’s a very incompetent guy, and he may be a dishonest guy,” Trump said of Powell during Oval Office remarks March 19, according to CNBC.
