Court blocks Justice Department subpoenas of Federal Reserve

A federal judge blocked the Justice Department’s move to subpoena Federal Reserve records, a significant setback in its inquiry into central bank chief Jerome H. Powell and his testimony regarding the Fed’s renovations of its headquarters.

U.S. District Judge James E. Boasberg in D.C. quashed a pair of subpoenas tied to the investigation and ordered the docket in the case to be unsealed. The ruling was unsealed Friday.

“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,” Boasberg wrote. “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.”

U.S. Attorney Jeanine Pirro, the top federal prosecutor in D.C. and a close ally of President Donald Trump, last year opened an investigation into whether Powell gave misleading testimony to Congress in the summer regarding the Fed’s $2.5 billion renovation of its headquarters overlooking the National Mall. Trump and some other Republicans have questioned the building’s amenities and rising costs.

A grand jury issued subpoenas to the Fed seeking records or testimony about the renovation, with a Jan. 29 deadline, The Washington Post has reported.

Powell has denied wrongdoing. After the subpoenas were issued, Powell publicly revealed the investigation’s existence and called it an attack on the Fed’s independence on matters of monetary policy.

This is a developing story. It will be updated.