The federal prosecutor running the investigation into cost overruns for a long-running renovation of the Federal Reserve’s headquarters says the inquiry will continue, raising the possibility that the confirmation of President Trump’s nominee to head the Fed could be delayed.
U.S. Attorney Jeanine Pirro told reporters at a press conference on Wednesday that the investigation would not be brought to an end despite protests from Senators at a hearing Tuesday for Kevin Warsh’s nomination to be the next chairman of the Fed.
Senator Thom Tillis, the North Carolina Republican, has repeatedly said he will hold up the confirmation until the investigation is resolved.
“The cost overruns on that building are well over $1 billion,” Pirro said. “This investigation continues>’
Pirro, the U.S. Attorney for the District of Columbia, began investigating the cost overruns last year. She has said that after the Fed repeatedly refused to cooperate with the investigation, her office sought a grand jury investigation to issue subpoenas. As well as the spending on the renovations, Pirro has said she is investigating Fed chair Jerome Powell’s congressional testimony. There have been no criminal allegations against the Fed or Powell.
Powell responded to the subpoenas with an unprecedented attack on the U.S. attorney’s office, posting a video in which he called the investigation a pretext and an attempt to undermine Fed independence. He claimed, without evidence, that the investigation was aimed at pressuring the Fed to cut interest rates. It is not clear how responding to the subpoenas would undermine the Fed’s ability to direct monetary policy.
Critics say that the Federal Reserve’s refusal to cooperate with the Justice Department’s investigation is itself unlawful and would put the central bank beyond the reach of the law.
“No agency is so important that they can exempt themselves from the constitution,” AEI senior fellow John Yoo told Fox Business’s Larry Kudlow last week. “President Trump has a constitutional duty to make sure people are not engaging in waste or fraud or abuse and that the money is being spent wisely.”
James E. Boasberg, chief judge of the U.S. District Court for the District of Columbia, quashed the subpoenas last month, ruling that prosecutors hadn’t met the bar to seek a subpoena. On April 3, Boasberg denied a request for a reconsideration by prosecutors.
At the confirmation hearing on Tuesday, Sen. Tillis praised Warsh, Trump’s nominee to succeed Powell as head of the Fed, saying Warsh has “extraordinary credentials.” But he maintained that he would not vote to move the nomination forward until the investigation—which he described as “bogus”—is dropped.
In his complaints about the investigation, however, Tillis undermined Powell’s claim that it was directed at controlling the Fed. “Big DOJ didn’t know anything about it, the president didn’t know anything about it. Let’s get rid of this investigation so I can support your confirmation,” Tillis said.
Last week, investigators from the U.S. Attorney’s office visited the Fed construction site but were turned away by construction workers who cited safety protocols and. The outside attorney for the Fed, former federal prosecutor Robert Hur, complained that the investigator appeared “without prior notice.” Hur said the visit was “inappropriate” and an attempt to circumvent Judge Boasberg’s ruling striking down the subpoenas.
Pirro, who held the press conference to announce her office’s prosecution of an international auto theft ring operating in D.C., said it would be inappropriate for her to drop the investigation in order to move Warsh’s nomination forward.
“I am in the legal lane, there are others who are in the political lane. I don’t intersect those two lanes,” Pirro said. “I am going forward…and we are continuing in this investigation.”
Pirro added that her office is appealing Boasberg’s ruling, arguing that it defies Supreme Court precedent setting an extremely low bar federal prosecutors convening grand juries.
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