DOJ Launches Criminal Probe Into Fed Chair Jerome Powell for Potential Lies to Congress

Federal prosecutors have launched a criminal investigation into Federal Reserve Chair Jerome H. Powell, focusing on whether he lied to Congress about the scope and features of the central bank's $2.5 billion headquarters renovation project in Washington.

The U.S. attorney's office in the District of Columbia, led by Jeanine Pirro, a Trump appointee and former Fox News host, opened the probe in November.

Prosecutors are reviewing Powell's June testimony before the Senate Banking Committee, public statements, and spending records related to the multiyear overhaul of the historic Marriner S. Eccles Building and another structure on Constitution Avenue.

The project, which began in 2022 and is slated for completion in 2027, has overrun its budget by about a whopping $700 million due to unforeseen issues such as higher-than-expected asbestos removal, soil contamination, material costs, and labor expenses.

In his testimony, Powell denied luxury elements in the updated plans.

"There’s no V.I.P. dining room; there’s no new marble. We took down the old marble, we’re putting it back up. We’ll have to use new marble where some of the old marble broke. But there’s no special elevators. There’s just old elevators that have been there," he stated.

Powell added that plans had "continued to evolve" and some initial features were scrapped.

The Justice Department served the Federal Reserve with grand jury subpoenas on Friday threatening a criminal indictment tied to that testimony.

Powell addressed the matter in a rare Sunday video statement.

"On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June," Powell explained. "That testimony concerned, in part, a multiyear project to renovate historic Federal Reserve office buildings."

He described the action as "unprecedented" and insisted the renovation and testimony issues served as "pretexts."

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," Powell declared. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation."

Powell affirmed his commitment and "deep respect for the rule of law and for accountability in our democracy."

"No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure. I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people."

A Justice Department spokesperson declined to comment on the specific case but noted that Attorney General Pam Bondi "has instructed her U.S. attorneys to prioritize investigating any abuse of taxpayer dollars."

The Federal Reserve is funded through fees and investment income, not direct taxpayer appropriations.

President Trump, who nominated Powell as chair in 2017 during his first term, has repeatedly blasted the Fed for not cutting interest rates aggressively enough.

"I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings," Trump warned in an NBC News interview.

He added that the subpoenas had "nothing to do with interest rates," stating: "No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got."

Trump has indicated he will soon announce Powell's replacement when the chair term ends in May, with Kevin Hassett among the front-runners.

Powell's governor term extends to January 2028.

Lawmakers from both parties questioned the probe's motivations.

"If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question," stated Sen. Thom Tillis, R-N.C., a Banking Committee member.

He vowed to oppose confirmation of any Trump Fed nominees until the matter resolves.

Sen. Elizabeth Warren, D-Mass., the committee's top Democrat, warned, “As Donald Trump prepares to nominate a new Fed chair, he wants to push Jerome Powell off the Fed Board for good and install another sock puppet to complete his corrupt takeover of America’s central bank.”

This escalation fits a pattern of Trump administration pressure on the Fed, including efforts to remove Gov. Lisa D. Cook over mortgage fraud allegations and prior threats to sue Powell for "incompetence" over the renovations.

The investigation marks a sharp test of the Federal Reserve's statutory independence, enshrined by Congress to pursue low inflation and maximum employment free from political interference.

At long last, a no-nonsense leader like President Trump is cracking down on the out-of-touch bureaucrats who've turned the Fed into a bloated empire, wasting billions on gold-plated renovations while hardworking Americans grapple with crippling interest rates.