Federal Reserve Chair Jerome Powell is staring down a potential criminal indictment for what Slate legal analyst Marc Joseph Stern called Monday a “made-up crime,” part of Trump’s audacious power grab to force the central bank into submission.
And it’s all but assured to come back to haunt him.
The Trump administration hit the Fed with grand-jury subpoenas on Friday, launching a criminal investigation into allegations that Powell lied to Congress about building renovations. The allegations are baseless, wrote Stern, as every penny of the $2.5 billion renovation has been meticulously documented. Builders uncovered asbestos, lead, and groundwater issues that sent costs soaring. A federal commission rejected cost-cutting and insisted on expensive marble to preserve historical integrity.
The criminal probe comes as Powell refuses to slash interest rates on Trump’s demand, which the Fed chair warned was a transparent “pretext” for the president’s real motive.
Stern tore into the Trump administration’s move, and warned it will likely blow up in Trump’s face.
“The probe represents yet another weaponization of the Justice Department’s prosecutorial powers to menace perceived political foes. But it is also an astoundingly foolish, self-defeating gambit that is all but guaranteed to backfire badly at the Supreme Court and further frustrate Trump’s efforts to take control of the Fed,” he said. “This investigation is not just legally frivolous; it is a grave tactical blunder that shows exactly why the judiciary must insulate Powell and his colleagues from the president’s wrath.”
He noted that while Trump’s previous attempt to fire Fed Governor Lisa Cook over dubious mortgage fraud allegations was rooted in the fact that she appeared to have falsely notated a secondary home as a primary residence, the Powell probe is “pure nonsense.”
“There is no kernel of truth here: The claims of wrongdoing are fabricated from top to bottom,” he said.
That could doom his case against Cook at the Supreme Court.
“There is a chance they would have let the president fire Cook if they believed that her ouster would constitute the one-off purge of a holdover Democrat. The Powell investigation proves that Trump has far greater ambitions—to knock off anyone, even a Republican, who won’t do his reckless bidding. It is a terrible omen for the rule of law, and the single greatest gift the president could have given Cook,” he wrote.
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