When Federal Reserve Chair Jerome Powell and the Federal Reserve received grand jury subpoenas in January of this year, The Guardian Powell’s reaction centered on politics. However, the real issue that this controversy exposes is not political interference, but the American grand jury system. Under the law, the American grand jury system allows for the formation of criminal accusations, otherwise known as indictments, in secret. These proceedings are guided almost entirely by prosecutors, who present evidence to a grand jury without the presence of a judge to weigh the validity of the evidence and without giving the accused the opportunity of presenting a defense until trial. What is more troubling is that the process does not require a prosecutor to present evidence that demonstrates the accused is innocent (exculpatory information). Cornell Law Review 1992 Our grand jury system, originally designed to safeguard individual freedom, has evolved into little more than a procedural formality. More than 95 percent of cases presented to grand juries result in indictments Congressional Hearings 2000 (Page 14), giving rise to the well-known phrase that “a prosecutor can indict a ham sandwich.” First coined by Sol Wachtler, Chief Judge of the New York Court of Appeals in 1985.
Other democracies have concluded that the grand jury process no longer serves its intended purpose. England, which created the grand jury a thousand years ago, abolished the system in 1933. U.K. Parliament, Administration of Justice Act 1933 it now uses open preliminary hearings before judges, where all the evidence is presented and both sides are heard. In contrast, the United States remains an outlier among other democracies.
The Powell investigation brings the structural problems of the grand jury system into public focus given the Federal Reserve’s role. When accusations are made behind closed doors, trust in multiple institutions erodes. Trust declines in the justice system due to secrecy and unchecked evidence; in the executive branch due to suspicions of political influence; and in the Federal Reserve due to concerns about its credibility to independently set monetary policy – all three become undeserving collateral damage.
Powell can perhaps encourage a discussion about the real issue, not politics, but grand jury reform because many before Powell, including President Trump, have been forced to defend themselves. Unfortunately, Powell has had to hire criminal defense attorneys to defend him personally. He is now experiencing the massive legal costs—potentially that could run into millions of dollars even before an indictment is issued above the Law along with reputational harm comes with these accusations. Powell’s experience is common, not the exception. It reflects what countless ordinary individuals face when confronted with an indictment. Careers are often damaged, reputations can be destroyed and financial security evaporates for those forced to hire legal counsel. All this devastation happens before a neutral decision-maker tests the evidence. Sadly, the ideal of innocent until proven guilty often yields to our human nature—public suspicion.
Conclusion
Powell’s dilemma, like that faced by thousands of ordinary individuals and even President Trump reflects an unchecked procedural power of the government. The solution may lie in new statutes to eliminate grand juries or statutes that require the government to withhold names until actual trials begin. If accusations are made in secret, fairness suggests that the names of the accused should remain confidential until the accused can tell his side of the story in court. Finally, maybe the solution is more fundamental, respecting human dignity and freedom.
