Judge quashes subpoenas in Justice Department's investigation of Fed
chair Jerome Powell
[March 14, 2026]
By CHRISTOPHER RUGABER
WASHINGTON (AP) — A federal judge on Friday quashed Justice Department
subpoenas issued to the Federal Reserve in January, a severe blow to an
investigation that has already attracted strong criticism on Capitol
Hill.
The investigation into testimony last June by Chair Jerome Powell about
a $2.5 billion building renovation has also delayed Senate consideration
of Kevin Warsh, President Donald Trump's pick to replace Powell when his
term ends May 15.
Judge James Boasberg said that the government has “produced essentially
zero evidence to suspect Chair Powell of a crime” and called its
justifications for the subpoenas so “thin and unsubstantiated" that they
were simply a pretext to force Powell to cut interest rates, as Trump
has repeatedly demanded.
“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,” he wrote.
The unprecedented investigation into Powell and the Fed is the latest in
a series of moves by the Trump administration to pressure the central
bank, which has for decades been considered as independent from
day-to-day politics. Trump has also sought to fire Lisa Cook, a member
of the Fed's governing board, after a member of his administration
accused her of mortgage fraud, though no charges were ever filed. The
Supreme Court has blocked Cook's firing for now.
Boasberg's ruling blocks U.S. Attorney Jeanine Pirro, who issued the
subpoenas, from obtaining records from the Fed related to the building
renovation. Pirro blasted the ruling at a news conference and said she
would appeal it.
Pirro said an “activist judge” has quashed the subpoenas, and has
“neutered the grand jury’s ability to investigate crime“ and leaves
Powell “bathed in immunity.”
“This is wrong and it is without legal authority,” she said.
The Justice Department’s investigation centers on testimony last June by
Powell before the Senate Banking Committee, when he was asked about cost
overruns on the Fed’s extensive building renovations. The most recent
estimates from the Fed suggest the current estimated cost of $2.5
billion is about $600 million higher than a 2022 estimate of $1.9
billion.
Powell at the time disputed that the renovation included “rooftop
gardens ... VIP elevators” and other amenities. But administration
officials charged that earlier construction plans included some of those
features, suggesting Powell was either lying or hadn't filed updated
building plans.
Pirro, in her news conference, said she wanted to investigate “an
atrocious cost overrun of $1 billion." In a filing unsealed Friday, the
government said it was investigating “possible fraud and false
statements” by the Fed and Powell.
Pirro's plan to appeal and continue the investigation could further
delay the Senate's consideration of Warsh's nomination. Powell can
remain as chair past May 15 if no replacement has been approved.
Powell revealed the investigation in an unprecedented video Jan. 11,
which prompted Sen. Thom Tillis, a North Carolina Republican and member
of the banking committee, to block consideration of Warsh until the
investigation is dropped.
Tillis said the ruling confirmed “just how weak and frivolous the
criminal investigation of Chairman Powell is.” Tillis has vowed to
blockade all Federal Reserve nominees until the criminal probe into
Powell is dropped.
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Federal Reserve Chair Jerome Powell speaks during a news conference,
Wednesday, Jan. 28, 2026, at the Federal Reserve Board Building in
Washington. (AP Photo/Jacquelyn Martin, File)
“We all know how this is going to end and the D.C. U.S. Attorney’s
Office should save itself further embarrassment and move on,” Tillis
said Friday. “Appealing the ruling will only delay the confirmation
of Kevin Warsh as the next Fed Chair.”
Tillis has also said that seven Republican members of the banking
committee have said no crime was committed by Powell at the June
hearing.
On Tuesday, Tillis met with Warsh and said he “possesses impeccable
credentials and a clear vision for maintaining the Fed’s
independence while achieving its dual mandate,” which is to seek low
inflation and maximum employment. But he reiterated he couldn't
support Warsh until the investigation is completed.
With Republicans holding only a 13-11 majority on the committee,
Tillis can block Warsh's nomination from being forwarded to the
Senate if all Democrats vote against it.
In his ruling, Boasberg said he offered to let the government submit
further evidence against Powell directly to him, so that they
wouldn't have to tip their hand to the Fed or Powell. But the
government declined to submit evidence under those conditions.
“The Court is thus left with no credible reason to think that the
Government is investigating suspicious facts as opposed to targeting
a disfavored official,” the judge wrote in his ruling.
In one of the filings unsealed Friday, there was a tantalizing
reference to a key question that has surrounded Powell for months,
which is whether he will step down from the governing board when his
term as chair ends. It was included in a government filing in
response to the Fed's move to throw out the subpoenas.
Powell is serving a separate term as a Fed governor until January
2028. Most chairs resign from the board when their time as chair
ends, but Powell has refused to answer if he will do so. Remaining
on the board would enable Powell to deny Trump the opportunity to
appoint a new governor.
In recounting a meeting between a lawyer for the Fed and Pirro, the
filing says that the Fed's attorney indicated that: “The Chair feels
like he would not leave the board when his term as Chair expires, if
he was still under investigation."
The filing went on to say that Powell wouldn't commit to leave the
board if he was not under investigation, but added that, "it would
be a different look to the Chair if he was not facing criminal
investigation and the Chair would be free to make a decision that
would focus on his family.”
Boasberg, who was nominated to the bench by Democratic President
Barack Obama, has been at odds with the White House on other legal
fronts since Trump returned to office last January. The Justice
Department sought Boasberg’s removal from a high-profile case in
Washington after he barred the Trump administration from carrying
out a wave of deportation flights under wartime authorities from an
18th-century law.
___
AP Writers Michael Kunzelman, Alanna Durkin Richer, and Seung Min
Kim contributed to this report.
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