Federal Prosecutor Jeanine Pirro of the District of Columbia reaffirmed on Wednesday, April 22, her commitment to advancing a criminal investigation into the Federal Reserve. This controversial probe is significantly endangering the confirmation process for Kevin Warsh, President Trump's nominee to replace current Fed Chair Jerome Powell.
The investigation centers on alleged cost overruns in the renovation project of two historic buildings belonging to the Federal Reserve in Washington, D.C. Chair Powell has publicly accused the Justice Department of targeting him with the investigation as an act of political retaliation, stemming from his refusal to comply with President Trump's demands for the Fed to sharply cut interest rates.
This probe has raised substantial concerns about the independence of the Federal Reserve and the increasing risk of interference from the executive branch. In defense of the Fed's autonomy, Republican Senator Thom Tillis of North Carolina has publicly declared that he will block Warsh's nomination in the Senate unless the Justice Department drops its investigation into Powell.
At a press conference on Wednesday morning, Pirro stated she would not retreat from the investigation. Pirro said, "The cost overruns for this building renovation project far exceed $1 billion, and this investigation will proceed." She added, "I operate in the legal lane; others operate in the political lane. These lanes do not cross."
The investigation faced a significant setback last month when a federal judge quashed a series of grand jury subpoenas issued by the prosecutor. The judge's ruling stated that "substantial evidence" indicated the true purpose of the subpoenas was to pressure the Federal Reserve Board.
Judge James Boasberg upheld the initial quashing order in early April and set a deadline of May 4 for Pirro to file an appeal. At Wednesday's press conference, Pirro firmly stated, "We will move forward and appeal Judge Boasberg's ruling." She further commented, "The U.S. Supreme Court has long held that a prosecutor can initiate a grand jury investigation based on rumor and suspicion. For a judge to stand at the grand jury's door and block a prosecutor, we believe that ruling must be appealed, and the investigation will continue."
President Trump, who appointed Powell as Fed Chair in 2017 but has since seen their relationship deteriorate, has voiced support for the ongoing investigation and has exaggerated the cost of the Fed's renovation project. On Tuesday morning, Trump stated, "We must find out why a relatively small building cost nearly $4 billion and how something like that could happen." In reality, the project's total cost is approximately $2.5 billion.
According to Justice Department procedures, prosecutors have 30 days to file a notice of appeal following Judge Boasberg's April 3 denial of Pirro's request for reconsideration. Powell's term as Fed Chair expires on May 15. Warsh's nomination must first be voted on by the Senate Banking Committee. Senator Tillis, a member of the committee, has repeatedly affirmed that he will obstruct the progression of Warsh's nomination as long as the investigation into Powell persists.
The Senate Banking Committee held a nomination hearing for Warsh on Tuesday, April 21. Warsh himself met with Senate Majority Leader John Thune, a Republican from South Dakota, on Wednesday. With the Senate scheduled to be in recess the week of May 4, the Banking Committee's initial vote on Warsh's nomination is unlikely to occur before the week of May 11.
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