Federal prosecutors on Tuesday made a surprise visit to the Federal Reserve headquarters building that's undergoing a $2.5 billion renovation, as they continue to investigate whether Fed Chair Jerome Powell lied to Congress about the cost and scope of the project. Construction workers told the prosecutors they couldn't come on the site without prior authorization, the Wall Street Journal reported. Instead, they were referred to the Fed's lawyers to coordinate a return visit.
The provocative move is the latest chapter in a months-long legal drama over the enormously expensive renovation of two Fed office buildings built in the 1930s, and whether Powell made false statements about the project in a congressional hearing last June. Specifically, Powell disputed media reports and accusations from administration officials and congressional Republicans that the project had extravagant design features, such as a VIP dining room, premium marble, water features and a rooftop terrace garden.
Last year, Office of Management and Budget Director Russell Vought reported that the $2.5 billion cost was $700 million over budget. President Trump, who has repeatedly criticized Powell for not pushing interest even lower than they are, was quick to condemn the Fed director for the steep price of the project. “When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” he said last year. More recently, he said the lead contractor "is probably one of the richest men in the country right now."
The ongoing drama had a moment of comic relief in July, when Trump joined Powell in touring the construction site with reporters tagging along:
Last month, US District Judge James Boasberg threw out two subpoenas that federal prosecutors had issued to the Fed. “There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will,” wrote Boasberg, an Obama appointee. Tuesday's surprise visit to the construction zone signals the DOJ's dedication to chasing the case.
“Any construction project that has cost overruns of almost 80 percent over the original construction budget deserves some serious review,” US Attorney for the District of Columbia Jeanine Pirro told the Journal on Tuesday. “And these people are in charge of monetary policy in the United States?” Pirro, a long-time Trump ally, gave a green light to the investigation in November.
Powell’s term as chair will expire on May 15, though his underlying seat on the Fed’s Board of Governors doesn’t end until 2028. In January, Trump nominated Kevin Warsh to replace him, but his Senate confirmation is being held up by Republican North Carolina Sen. Thom Tillis, who said he won't vote to advance Warsh's nomination until the DOJ investigation of Powell and the Fed is complete. Powell has said he'll stay on as chair until his successor is confirmed. Fed chairs usually give up their Board of Governors seat after leaving the top job, but Powell has said he will make a decision on that "based on what I think is best for our institution and the people we serve.”