Federal Reserve says Jerome Powell subpoena should be kept void

The Federal Reserve’s Board of Governors urged a judge to reject prosecutors’ request to reconsider its recent decision to block subpoenas issued in the criminal investigation of Chairman Jerome Powell over a costly renovation of the central bank’s headquarters and his congressional testimony about that.

Fed lawyers, in one Court filing opened on Thursday, Judge James Boasberg said the U.S. Attorney’s Office for the District of Columbia failed to even remotely meet the legal threshold for this. reconsideration motion.

“The reconsideration motion … does not even mention the demanding legal standard – let alone meet – that applies to extraordinary relief,” Fed lawyers wrote in the motion in U.S. District Court in Washington.

The lawyers said “reconsideration is only necessary” if there has been a change in the law related to the issues in the case, when there is new evidence, or if “it is needed to correct an obvious error or prevent a manifest injustice.” None of this happened, the lawyers said.

“The motion (by prosecutors) does not attempt to overcome these high hurdles, but rather resorts to misrepresentation of the Court’s opinion and the record on which it relies,” the lawyers wrote.

The Fed’s reasoning was expected, given that the board had first sought to block the subpoenas to the central bank, saying they and the criminal investigation were merely a pretext to get Powell to agree to cut interest rates more quickly and more sharply, as President Donald Trump has repeatedly demanded.

Trump called Powell the “idiot at the Fed” during a call with reporters at the White House on Thursday.

This echoes Trump’s previous sharp comments about the chair, which Boasberg cited at length in his ruling as evidence that, “Overall, the President essentially spent several years asking if someone would relieve him of this troublesome Fed chair.”

Trump on Thursday also criticized the rising costs of renovating the Federal Reserve Building and said he was being sued for demolishing the East Wing of the White House to build the ballroom, while Powell appeared to be avoiding legal liability.

It’s unclear when Boasberg will rule on the dueling motion, or whether U.S. Attorney Jeanine Pirro will drop her office’s investigation of Powell if she loses her bid to have the judge overturn the March 11 ruling.

Pirro’s office argued in a March 12 motion for reconsideration that Boasberg’s decision “applied the wrong legal standard, erred with respect to some important facts, and ignored other relevant facts.”

It is extremely rare for a judge to overturn a decision in such cases and it is even rarer for appellate courts to overturn such decisions.

Sen Thom Tillis, R.N.C. has promised to block the confirmation of Kevin Wersh to replace Powell as Fed chair until the investigation is concluded.

Boasberg, in his blistering rulingThe Fed’s board rescinded two subpoenas served by Pirro’s prosecutors seeking records regarding a multibillion-dollar project to renovate the central bank’s headquarters, and Powell’s testimony to a Senate committee in which he “briefly discussed those renovations.”

The judge agreed with the Fed Board’s argument that the subpoenas were issued for an improper purpose.

“There is abundant evidence that the principal (if not the sole) purpose of the subpoena is to harass
and pressure Powell to either yield to the President or resign and make way for a Fed Chairman who will do so,” Boasberg wrote in the decision.

The decision was issued more than a week after Boasberg asked a prosecutor in a sealed court hearing, “What evidence is there of fraud or criminal misconduct with respect to the renewal?”

The prosecutor, GA Masuko-Lataife, replied, “We don’t know at this time,” an unsealed transcript of the proceedings shows.

“However, we have 1.2 billion reasons to look at it,” Masuko-Lataife said, referring to the dollar overruns in the project’s cost.

“And I would tell the court that a $1.2 billion increase in costs … doesn’t seem right,” said the prosecutor who leads the criminal division of Pirro’s office.

“This is the GDP (gross domestic product) of some small country, yet we’ll ignore it and say, oh, it’s gone just because it’s a historic building? It doesn’t seem right,” Masuko-Lataife said. “And are we prohibited from investigating it? That would seem, as you know, to prejudicially affect any investigation the government has done so far.”

In his written decision, Boasberg called prosecutors’ arguments for the subpoena a “weak claim to a legitimate purpose.”

In its briefing, the government’s only justification for investigating the renovation is that it “went way over budget, raising suspicions of fraud,” Boasberg wrote. “But buildings often go over budget. This fact, standing alone, hardly suggests that any crime has been committed.”

“Nor is there any reason to think that this project was particularly prone to fraud,” the judge wrote, noting that the Fed’s “independent Inspector General … has full access to project information on costs, contracts, schedules, and expenditures and receives monthly reports on the construction schedule.”

“They audited the renewals several years ago and raised no concerns about fraud,” Boasberg said.

Trump criticized the cost of the renovations and their slow progress in remarks at the White House on Thursday.

Trump said, “I would have built that building for $25 million; it probably would have cost $4 billion.” “I passed by that building the other day. It’s ‘see-through’. Do you know what ‘see-through’ means? There’s no wall there.”

“But the National Trust for Historic Preservation, which is a joke, they didn’t sue that building,” Trump said.

“He sued me. I was sued. That can only happen to Trump,” the president said.

Trump said, “But they don’t prosecute the guy whose interest rates are too high. So we call him too late. His name is Jerome Powell.” “We call him Jerome “Too Late’ Powell and he’s done a terrible job so you have shabby little walls, eventually a flat little roof, but right now, you have nothing, and no one’s suing this guy.