Tag: jerome powell
Abusing 'The Most Dangerous Power' Against Trump Adversary Gavin Newsom

Abusing 'The Most Dangerous Power' Against Trump Adversary Gavin Newsom

Multiple news outlets reported last week that federal agents have been questioning friends, former employees, and associates of Governor Gavin Newsom of California and his wife, Jennifer Siebel Newsom. A person familiar with the matter, speaking anonymously, confirmed to The Times that multiple investigations are underway, including at least one focused on Jennifer Siebel Newsom’s finances.

In contrast to others of the administration’s political prosecutions, Jennifer Siebel Newsom presents a fairly checkered financial background. She has been the subject of allegations and at least one prior federal inquiry into potential self-dealing, improper financial arrangements between her nonprofit organizations and private entities, and possible conflicts of interest involving donors with business before the state.

Moreover, Governor Newsom’s former chief of staff, Dana Williamson, just pleaded guilty to three felonies, including lying to the FBI about confidential state litigation she leaked to a former business partner, an investigation that was initiated during the Biden administration.

So Todd Blanche and the Department of Justice, who have been pilloried in the courts and public opinion for their rank reprisal prosecutions against blameless targets such as James Comey, may be making a sort of calculated wager. Yes, the multiple investigations certainly seem of a piece with the indefensible investigations and indictments of other Trump enemies. But if they can prospect wide and deep enough, they may come up with a charge against Jennifer Siebel Newsom that they can make stick. And at that point, the calculation goes, their improprieties are redeemed. It’s all in the service of a valid prosecution. The fishing expedition has landed something in its net.

That reasoning is precisely, fundamentally wrong. And the reason it is wrong was spelled out with devastating clarity eighty-six years ago, in words that ever since have carried canonical status in the Department of Justice.

On April 1, 1940, Robert H. Jackson, then Attorney General of the United States and later Associate Justice of the Supreme Court and America’s chief prosecutor at Nuremberg, stood in the Great Hall of the Department of Justice and addressed the country’s assembled U.S. Attorneys. The speech, “The Federal Prosecutor,” came immediately to serve as a sort of Bible for federal prosecutors.

For more than eighty years, it has been taught to new prosecutors, quoted by senior ones (as well as countless courts discussing prosecutorial practices), and invoked in training sessions and ethics discussions across generations as the definitive statement of the value and danger of federal prosecutorial power.

Jackson began by declaring that the prosecutor “has more control over life, liberty, and reputation than any other person in America.” Notice the important substitution for Jefferson’s “the pursuit of happiness.” Jackson was keenly aware the mere investigation of a citizen can be ruinous. This prospect is a chief reason why prosecutors are not supposed to reveal anything about pending investigations, one of several cardinal principles that Blanche’s DOJ has simply ignored.

Jackson went on to explain an alternative way an unscrupulous prosecutor can exact reputational harm: “the prosecutor may choose a more subtle course and simply have a citizen’s friends interviewed.” No doubt the Newsoms understand too well how that works.Jackson then identified what he called “the most dangerous power” a prosecutor possesses: “that he will pick people that he thinks he should get, rather than pick cases that need to be prosecuted.” It is in this realm, Jackson wrote, where the prosecutor “picks some person whom he dislikes or desires to embarrass” and then hunts for a charge to fit—that the abuse of prosecutorial power is most dangerous and consummate.

Critically, a prosecutor who has taken that step—chosen the person whom they dislike or desire to embarrass and then hunts for the crime to pin on them—has already committed the cardinal sin.

Jackson makes this point with pellucid clarity. “With the law books filled with a great assortment of crimes,” Jackson wrote, “a prosecutor stands a fair chance of finding at least a technical violation of some act on the part of almost anyone.”

The grave danger is not the prosecutor who can’t find a crime. It is the one who picks his target first and then goes looking: not discovering a crime and finding its perpetrator, but “picking the man and then searching the law books, or putting investigators to work, to pin some offense on him.”

That, Jackson concludes, is when “the abuse of prosecutorial power is most dangerous and most complete.”

In truth, Jackson’s stern assessment was designed for a Department of Justice that would never even have considered bringing bogus, meritless charges to harass a president’s political enemies. That abominable practice—now a staple of Trump’s DOJ—was so far beyond the pale that it didn’t even figure in Jackson’s calculation. Jackson was speaking to prosecutors who still operated within the basic constraints of institutional good faith. That this Justice Department has shown us an even more dangerous and complete abuse of prosecutorial power doesn’t diminish the force of Jackson’s words.

Jackson’s classic admonition maps directly onto the multiple investigations of the Newsoms. Gavin Newsom is clearly a person whom Trump (and therefore Blanche) “dislikes or desires to embarrass.” In fact, Trump already called for Newsom’s arrest last year. It’s Gavin Newsom’s potential presidential candidacy, not Jennifer Siebel Newsom’s financial peccadillos, that lies at the core of the investigations.

The fresh wave of inquiries to Newsom’s friends and former employees hit around the time Trump announced his intent to nominate Blanche for Attorney General. There is no indication of any new factual development or new witness that landed Jennifer Siebel Newsom in the feds’ crosshairs.Gov. Newsom is not simply presidential timber but one of Trump’s and Blanche’s most prominent antagonists. He has called Blanche “the guy covering up the Epstein Files,” and accused Trump of selling the presidency for golf course approvals and cryptocurrency deals and a private jet. In Jackson’s taxonomy, he has made himself “personally obnoxious to or in the way of the prosecutor himself.”

It was Gavin Newsom who revealed the multiple investigations and fanning out of law enforcement to their friends and employees. In his video, Newsom accused Trump of using the Justice Department to punish a political enemy, described the investigation as a fishing expedition sifting through “years and years of random documents,” and was direct about the motive: “Donald Trump isn’t just coming after me because of my mean tweets. He’s coming after me because I am considering running for president.”

This strategy, also adopted by James Comey in the wake of the second set of charges against him, is the complete opposite of conventional wisdom. Except that wisdom was developed in the context of a Department that follows the rules and respects the Constitution.

In an honest Justice Department, targets of federal investigations keep their heads down, say nothing, and pray that no charges are filed and no one outside a tight circle ever finds out. That is the standard playbook, and it exists for good reason: federal investigations are strictly confidential, charges are not proof, and public exposure of a federal inquiry is itself a form of punishment. DOJ policy has long prohibited the Department from confirming or denying the existence of investigations precisely for this reason.

But the Newsoms had a second, equally compelling reason to get out in front: they cannot trust this Justice Department to stay quiet. This DOJ has a well-documented track record of improperly making investigative activity public for political effect. The Department has repeatedly publicized or permitted disclosure of investigations long before charges were filed—from the criminal investigation of Fed Chair Jerome Powell, to the renewed Russia-investigation inquiries, to public disclosures concerning Comey and Letitia James.

Newsom opted to wear the target as a badge of honor and to frame the investigation as evidence of his political prominence and the president’s fear. Newsom said he was proud to join the “hit list” of people standing up to Trump. He excoriated Trump personally: “You can subpoena my records. You can investigate me. You can harass me. Put my name on every and any enemies list you have, but leave my wife and family out of your personal vendetta.”

In the normal order of things, being investigated by the Justice Department is a mark of potential criminality. In this one, it is a mark of how much Donald Trump loathes and fears you: practically a credential for the 2028 primary. Newsom understands this, and he is playing it accordingly.

The Justice Department has already committed the abuse that Robert Jackson identified as the gravest danger and abuse of prosecutorial power. They have “picked the people” they think they should get, “rather than pick cases that need to be prosecuted.”

Jackson closed his address by sketching the ideal he urged every federal prosecutor to embody: someone who “seeks truth and not victims, who serves the law and not factional purposes, and who approaches his task with humility.”

It’s as fundamental a statement of DOJ’s defining mission as we have, and generations of prosecutors took it as sacrosanct. Todd Blanche has trashed it, stomped on it, and then shredded it for good measure; and he has done so proudly, invoking the superior and ultimate authority of the president for whom he has publicly proclaimed his love.

The Newsoms are the latest victims of a Department of Justice that Jackson could not have begun to recognize. And the transgression is complete already, without regard to whether a phalanx of federal investigators and prosecutors is able to dredge up some tenable federal charge.

Harry Litman is a former United States Attorney and the executive producer and host of the Talking Feds podcast. He has taught law at UCLA, Berkeley, and Georgetown and served as a deputy assistant attorney general in the Clinton Administration. Please consider subscribing to Talking Feds on Substack.

Reprinted with permission from Talking Feds.

Jerome Powell

Nine Americans Who Actually Deserve Money From That Trump Slush Fund

President Donald Trump’s disturbingly corrupt fund to disburse nearly $1.8 billion to traitorous insurrectionists and other Trump loyalists who tried to steal the 2020 election may be on the rocks, as even the sycophantic Republicans in Congress know that letting Trump pay people who broke the law is political suicide.

But what if I told you there are people who actually deserve some of the $1.776 billion that Trump “negotiated” with himself to give out to people who have been the target of a weaponized Department of Justice?

None of them are the domestic terrorists who beat up law enforcement officers at the Capitol on Jan. 6, 2021. Nor are they Trump allies who conspired with him to steal the election. Those people were correctly prosecuted for their conduct, and were not victims of the DOJ, as Trump and other Republican monsters have deludedly convinced themselves.

Instead, the people who deserve compensation are the perceived “enemies” that Trump has either threatened with criminal investigations or actually indicted for the apparent “crime” of not supporting Trump.

They are also the average Americans who Trump’s out-of-control and actually weaponized DOJ has tried to jail for the non-crime of protesting his immigration goons or daring to be born into a minority group.

The following list is not exhaustive. In fact, you may think of others that I missed, and I encourage you to list them in the comments. (For example, New Jersey Democratic Rep. LaMonica McIver, Newark Mayor Ras Baraka, and Sen. Mark Kelly (D-AZ) could easily have made this list, but for the sake of brevity were left out.)

Nevertheless, here are just some of the people who should get some of Trump’s slush fund.

1. Maureen and James Comey

Former FBI Director James Comey and his daughter, Maureen Comey, have both been the target of Trump’s weaponized DOJ.

James has now been indicted by Trump’s DOJ twice—both on bogus charges.

The first indictment was on a bullshit charge of lying to Congress about the Russia investigation. That indictment was thrown out after a judge ruled that the incompetent attorney who sought the charges—now-former United States Attorney Lindsay Halligan—was illegally appointed, and thus the indictment she obtained was also unlawful.

Yet Trump never gave up his desire to punish Comey, and the former FBI director was indicted again in April on yet a new and even dumber fake charge.

The second indictment was over an Instagram post in which Comey published an image of the numbers “86 47” made out of seashells in the sand. The DOJ ridiculously claimed that the image constituted a “threat to take the life of, and to inflict bodily harm upon the President of the United States.”

Even Republicans say the charge is bogus, and amounts to a violation of Comey’s First Amendment right to free speech. Like the first charge, this too will likely be thrown out.

Nevertheless, the weaponized DOJ is costing Comey time and money to fight Trump’s malicious prosecutions, and thus he should be compensated by the slush fund Trump created.

Meanwhile, Maureen was unjustly fired from her job as a federal prosecutor—where she successfully prosecuted Jeffrey Epstein co-conspirator Ghislaine Maxwell—simply because she shares the same last name as her father.

She is suing the DOJ for her wrongful termination. And she should win.

2. New York Attorney General Letitia James

As New York’s top prosecutor, James successfully prosecuted Trump on charges that he falsified business records in the Empire State, which will ensure that Trump in perpetuity will be known as a convicted felon.

And that enraged Trump, who sought revenge on James by indicting her on made-up charges of mortgage fraud.

Like Comey’s indictment, James’ charges were thrown out by a judge, as the same dumb and illegally appointed prosecutor obtained the indictment.

Unlike Comey, James has not been indicted again—at least as of yet. Still, for having to challenge her indictment, James should be awarded compensation for her time and money.

3. Former Trump national security adviser John Bolton

Bolton served in Trump’s first administration as his national security adviser. But he left on bad terms and has since accused Trump in a book of being a malignant narcissist who abused the power of the presidency and gave aid and comfort to America’s enemies.

That book riled up Trump, who not only criticized Bolton but sought his indictment over the very book that made Trump so mad. The DOJ accused Bolton of taking classified information to write the book.

This case has not been thrown out, and Bolton has vowed to fight the charges in court.

“I look forward to the fight to defend my lawful conduct and to expose his abuse of power,” Bolton said after the charges were brought.

4. Former Federal Reserve Board Chair Jerome Powell

Trump sicced sloshed sycophant Jeanine Pirro, the former Fox News host who he appointed as U.S. attorney for the District of Columbia, on Powell likely as a way to get Powell to resign early.

Pirro said that the DOJ was investigating Powell over cost overruns for renovations at the Federal Reserve Bank. Trump wanted Pirro to launch the bogus investigation because he loathed Powell, who did not bend to Trump’s will on lowering interest rates.

Indeed, Trump threatened to fire Powell multiple times. But when the stock market reacted negatively to Trump’s attempts to nix the Federal Reserve’s independence, he instead took the mob-boss route of threatening to make Powell’s life so miserable that Powell would view resigning as a better move than sticking around.

Powell, however, held firm and stuck around while he challenged the probe.

And one lone GOP senator’s protest ultimately helped push the DOJ to drop the probe into Powell. But for the stress of being the target of an unjust investigation, Powell should be compensated.

5. Federal Reserve Governor Lisa Cook

Not content with ousting just Powell, Trump also decided to go after Federal Reserve Board members who also do not support his desire to lower interest rates at a time of high inflation.

Last August, Trump tried to fire Cook, accusing her of the same fake mortgage fraud as he charged Letitia James with. Cook, however, refused to step down. She challenged her firing in court, and won. And for that time and effort, she should be compensated.

6. Kilmar Abrego Garcia

Perhaps no one has been treated worse than Venezuelan immigrant Kilmar Abrego Garcia, whom Trump falsely accused of being a criminal and wrongly deported him to a torture prison in El Salvador.

Garcia successfully fought the accusations and made his way back to the United States.

But since his return, he has been tormented by Trump, who has continued to falsely accuse him of being a criminal. And Trump’s immigration goons have continued their effort to try to deport Garcia to horrible places where he would face extreme danger, although a judge finally dismissed his bogus human smuggling charges on Friday.

His treatment amounts to torture, and he should be compensated for his suffering.

7. ChongLy Thao

Trump’s incompetent immigration goons created a lasting and disturbing image when they marched ChongLy Thao out of his home in freezing temperatures wearing just boxer shorts and a blanket after they wrongly confused Thao of being a wanted undocumented immigrant.

Thao was, however, not the person ICE was seeking. Instead, he is a law-abiding naturalized U.S. citizen who was ripped from his home by authorities who didn’t even have a warrant. Even worse, the person ICE was seeking to arrest was already in jail.

Thao has said he will sue the government for violating his civil rights. And he should win.

8. D.C. sandwich thrower Sean Dunn

Sean Dunn became a pop culture icon, after he was captured on video hurling a sandwich at federal immigration officers trying to abduct people off the street in the nation’s capital.

Trump’s Department of Justice charged him with felony assault for “forcefully” throwing the sandwich at officers.

“I just learned that this defendant worked at the Department of Justice — NO LONGER. Not only is he FIRED, he has been charged with a felony,” former Attorney General Pam Bondi said in a statement that is somehow real and not an Onion article. “This is an example of the Deep State we have been up against for seven months as we work to refocus DOJ. You will NOT work in this administration while disrespecting our government and law enforcement.”

Reprinted with permission from Daily Kos

Fun Times Ahead! What Kevin Warsh Can Expect At His First Fed Meeting

Fun Times Ahead! What Kevin Warsh Can Expect At His First Fed Meeting

Newly appointed Federal Reserve chair Kevin Warsh will lead his first Fed meeting in less than a month. Ordinarily, I would feel sorry for a person in his situation. But since the guy is a rich, power-hungry jerk, I am looking forward to some great entertainment.

To set the table here, in his vast ignorance, Donald Trump has decided that interest rates should be much lower than they are now. He has muttered something along the lines of the Fed having a 1.0 percent interest rate instead of the current 3.5 percent rate.

Trump repeatedly threatened the outgoing Fed chair, Jerome Powell, who he had initially appointed. Trump started with insults on his Truth Social platform, moved on to threats of firing, and then told his Justice Department to cook up a criminal investigation.

While they at least temporarily suspended any prosecution, to get the votes needed in the Senate for Warsh, Trump has explicitly left the option on the table. And Acting Attorney General Todd Blanche has made it clear that he will indict people for getting Trump angry. Powell may still end up facing criminal charges for not going along with Trump’s demands to lower rates.

Trump also has said that he expects Warsh to lower rates or he wouldn’t have appointed him. For this reason, we might expect that Warsh will be looking to lower rates next month.

The problem for Warsh is that he can’t lower rates by himself. He would have to convince a majority of the 12-person Federal Open Market Committee (FOMC) to go along with lower rates. He is not likely to get much help here.

At the last meeting, there was only one person arguing for lower rates, Stephan Miran, another Trump appointee. Warsh replaced Miran in his seat on the FOMC when he became Fed chair. This means that Warsh will step into the meeting with 11 other FOMC members who wanted to keep rates unchanged at the last meeting. Several of them actually leaned toward raising rates.

The new data since that meeting all point to higher inflation and also a somewhat improved labor market. That is not a mix that makes a good case for lowering interest rates.

The overall Consumer Price Index increased 0.6 percent in April, after rising 0.9 percent in March. This brought the year-over-year rate to 3.8 percent, the highest since early 2023. The core wasn’t too much better, rising 0.4 percent in April, bringing the year-over-year rate to 2.7 percent.

The Producer Price Indexes (PPI) and the Import Price Indexes were arguably even worse. The final demand index in the PPI rose 1.4 percent in April, bringing the year-over-year increase to 6.0 percent. The core index rose 0.6 percent, bringing its year-over-year increase to 4.4 percent..

The non-fuel import price index rose 0.8 percent in April, bringing the increase over the last year to 2.9 percent. These prices, on items like imported clothes and cars, had been falling in 2024. (The import price index does not include tariffs.)

These data all indicate a rate of inflation that is well above the Fed’s 2.0 percent target, and considerable pressure from input prices pushing inflation still higher in the future. It is hard to see how Warsh would be able to convince the other 11 FOMC members that the new data since the last meeting justify a rate cut.

This puts Warsh in the interesting spot where he either votes to keep rates constant (there will likely be members pushing for a rate hike) and incurs Trump’s wrath, or he casts a pointless vote for a cut. If Warsh does the latter, it will be the first time ever that a Fed chair has been in the minority on a vote on monetary policy.

If Warsh ends up being the only vote for a cut, like his predecessor, Stephan Miran, it would be truly unprecedented for a Fed chair to be completely out of line with the rest of the FOMC. Most often, the FOMC has no dissents, as the committee works to reach a consensus. The Fed chair being the lone dissenter would be extraordinary.

This dissent may make Trump happy, but it likely takes Warsh further from the goal of lower rates. Unless Trump tries to jail the rest of the FOMC, it will be necessary to convince the other members that there is a good argument for lower rates. A vote for a cut with the data we have recently seen does not look serious. It is not going to carry weight with the people Warsh needs to convince.

As I said, if he weren’t a pathetic, power-hungry jerk, I would feel sorry for him. However, given the situation, I look forward to the entertainment.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.


Now It's The Fed Chair's Choice: Should He Stay Or Should He Go?

Now It's The Fed Chair's Choice: Should He Stay Or Should He Go?

Just to be clear, I’m not saying that the Clash had those numbers right re the trouble ratio if he stays or if he goes. But it did seem to be the relevant hook.

Now that the pathway for replacing Federal Reserve Chair Jerome Powell with Trump’s nominee, Kevin Warsh, was cleared yesterday, I expect Warsh’s nomination to quickly get out of committee and over to the Senate floor, where he should have no problem getting a majority (he may not get any D votes, but he doesn’t need them). He could then take over the chair in mid-May, when Powell’s term as chair ends.

Why the bold above? Because even though Powell’s term as chair ends, his term on the Fed board doesn’t end until January ‘28. The norm, however, is for Chairs to leave the building once their Chair term ends, with, as far as I can tell, one exception: when Marriner Eccles stepped down from the Chair in 1948, he rolled over to the Fed board for another few years.

In this case, if Powell stayed on, Miran would have to resign to make room for the newly minted Chair Warsh to take over.

A number of folks, including commenters here, have argued to me that, in the interest of protecting this critically important institution and the economy itself from Trump’s destructive influence, Powell should emulate Eccles. I certainly understand their argument, but I’m not wholly there. I’ll explain my thinking, but only briefly, because this is Powell’s call and there’s nothing anyone can tell him about this that he doesn’t know. (Read Nick Timiraos in the Wall Street Journal this morning for a comprehensive treatment of the stay/go question, with strong stay-vibes from former Fed economist David Wilcox, who knows more about the inner workings and history of the institution than most).

The motivation for stay, Jay, stay! is understandable nervousness about Warsh’s independence from Trump, a concern I share and have written about in recent days. Powell has been a fierce defender of such independence and thus his presence, especially absent Miran, who has consistently voted, often alone, for the rate cuts Trump wants, would be reassuring in that regard.

There’s no doubt in my mind that Powell’s staying on the board would yield better, more balanced, and more independent-from-Trump monetary policy, which would in turn be better for the U.S. and even the global economy. But there are two countervailing factors.

First, Powell has earned the right to do whatever he sees fit. He’s delivered consistently thoughtful, carefully explained, effective monetary policy in 14 years of service, eight of which he was chair. And many of those years were under Trump (who, for the record, reappointed him), wherein he got more presidential harassment than any Fed chair in history, from daily badgering and name-calling, to a phony criminal inquiry.

To be clear, our hearts should not over-bleed for him. He also had one of the coolest jobs in the world, backed by a deeply talented staff and some very smart colleagues on the board. You take the bad with the good. But the point is he served admirably, and has not only pulled rabbits out of monetary-policy hats—the post-pandemic soft landing, which many tony economists said couldn’t happen—but stood up to Trump and preserved the Fed’s independence. He’s earned the right to make whatever next move he desires.

But second, and I know not everyone will share this take, Warsh deserves the chance to establish himself as the new chair without the old chair hanging around. Readers know that I fear where he’s going with his new gig, but under the assumption that he’s legitimately confirmed in coming days, he has the right to takeover and begin to put his imprimatur on the joint.

If Powell should decide otherwise, i.e., that, as Wilcox argued in the Timiraos Wall Street Journal piece, the institution should at least initially be protected from Warsh’s unencumbered leadership, or, for that matter, that he (Powell) is still at risk of prosecution from the bullshit inquiry that Trump cooked up, I’ll of course support his decision.

But the norm of the Chair stepping down is a norm for a good reason: clearing the path for the new Chair is good for the institution. Of course, independent monetary policy is also very good for the institution, so there are good arguments on both sides.

Luckily, there’s only one person who has to make that call. And his call will be the right one.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities. Please consider subscribing to his Substack.


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