A federal judge has thrown out two Justice Department subpoenas directed at the Federal Reserve, dealing a major setback to a criminal investigation into Federal Reserve Chairman Jerome Powell.
The ruling, first reported by the Wall Street Journal, was issued by U.S. District Judge James Boasberg and unsealed Friday.
Boasberg concluded that the subpoenas were improper and suggested their primary purpose was to pressure Powell rather than advance a legitimate criminal investigation.
“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,” Boasberg wrote in the ruling.
The subpoenas had been issued as part of a probe launched by U.S. Attorney Jeanine Pirro into whether Powell provided false testimony to Congress last summer.
The investigation focused on statements Powell made about the Federal Reserve’s building renovation project.
The probe was unusual in that it involved a criminal investigation into the sitting chair of the nation’s central bank.
Powell publicly pushed back against the investigation earlier this year.
In a January 11 video statement, Powell said the inquiry appeared to be part of a broader effort to pressure the Federal Reserve and influence monetary policy decisions, particularly interest rates.
The legal dispute over the subpoenas had been taking place largely behind the scenes.
The Wall Street Journal previously reported that the Federal Reserve was quietly challenging the subpoenas in court, with much of the process remaining confidential because of grand jury secrecy rules.
Boasberg’s ruling could also have implications for leadership at the Federal Reserve.
The decision may clear the way for the Senate to move forward with confirming Kevin Warsh as the next chair of the central bank.
Sen. Thom Tillis of North Carolina previously said he would not support moving forward with a confirmation vote while the investigation remained active.
Following the ruling, Pirro criticized the decision and signaled that the Justice Department would challenge it.
She said the ruling lacked legal authority and argued it placed Powell beyond the reach of the law.
Pirro confirmed that she plans to appeal the decision.
The case now moves into the appeals process as the legal fight over the investigation continues.
