Grand Jury Rejects Federal Indictment of New York Attorney General, Raising New Questions About Trump’s Use of DOJ Power

WASHINGTON — A federal grand jury in Norfolk, Va., has rejected the Justice Department’s second attempt to indict New York Attorney General Letitia James on mortgage-fraud charges, a stunning setback for the Trump administration that has intensified scrutiny over the president’s use of federal law-enforcement power against political adversaries.

The decision, handed down on Dec. 4, marks the second time prosecutors appointed by President Trump have failed to secure charges against Ms. James, who for years has led high-profile civil investigations into Mr. Trump and his business empire. A federal judge dismissed the first indictment earlier this year, calling the evidence insufficient and legally deficient.

Instead of abandoning the effort, the Justice Department empaneled a new grand jury to review a reworked case. After hearing testimony and reviewing government evidence, jurors — ordinary citizens drawn from the Norfolk area — declined to return an indictment. According to individuals briefed on the proceeding, the panel concluded that prosecutors failed to establish probable cause.

The rare rejection is likely to deepen alarm among legal experts and civil-liberties advocates who say the administration has blurred the line between the impartial application of law and the president’s political objectives.

Ms. James, in a statement, said the decision “vindicates what we have warned about for months — that the Justice Department was being used as a weapon of retaliation.” She added that she would continue “pursuing the work New Yorkers elected me to do.”

The attempt to prosecute Ms. James followed months of upheaval inside the Justice Department. According to people familiar with internal discussions, the original U.S. attorney overseeing the review of Ms. James’s conduct refused to bring charges, citing lack of evidence. President Trump subsequently fired him and appointed a new U.S. attorney, Michael Halligan, who moved quickly to reopen the case and present it to a grand jury.

Mr. Halligan has also revived dormant inquiries into other Trump critics, including former FBI director James Comey, drawing additional concern from career prosecutors who say political considerations are shaping investigative priorities.

At the same time, the president has issued a sweeping series of pardons — more than 20 since January — many of them benefitting political allies, donors and individuals facing significant federal charges. Among them are Representative Henry Cuellar of Texas, accused of bribery and money-laundering, and real-estate developer Michael LeLay, indicted under Mr. Trump’s own Justice Department for bid-rigging.

Taken together, critics say, the pattern resembles the kind of loyalty-based justice system seen in authoritarian governments, where leaders use prosecution to punish enemies and clemency to reward friends. “This is the definition of abuse of power,” said one former Justice Department official, who requested anonymity to speak candidly.

The grand jury’s refusal to indict represents one of the strongest institutional checks so far on the administration’s push to pursue its adversaries. It also arrives at a politically precarious moment for the White House, which is facing a prolonged government shutdown, a faltering economy and declining approval ratings.

While the Justice Department has not indicated whether it will attempt a third prosecution, legal experts say the path forward appears narrow. For now, the grand jury’s message is clear: regular citizens are unwilling to endorse the administration’s most aggressive attempts to criminalize its critics.