By Emmanuel Bobby
Late last year, as President Donald Trump publicly intensified his attacks on Federal Reserve Chair Jerome Powell, federal prosecutors quietly opened a criminal investigation related to the renovation of Federal Reserve office buildings. When subpoenas were issued, the circle of people informed was kept deliberately small, according to three sources familiar with the matter.
The U.S. Attorney’s Office for the District of Columbia did not notify senior Justice Department leadership, the White House, or the Treasury Department before issuing the subpoenas, the sources said. The investigation began in November and remained largely out of public view until Powell confirmed it Sunday evening.
The probe marks the latest instance in which Trump’s Justice Department has been accused of using the criminal justice system to intimidate or punish perceived political adversaries. Powell has said prosecutors threatened a criminal indictment.
In a phone interview, Trump said he knew nothing about the investigation and again criticized Powell’s leadership at the central bank.
“What should pressure him is the fact that rates are far too high,” Trump said. “That’s the only pressure he’s got.”
However, Trump appeared to foreshadow potential legal action in late December, when he publicly floated the idea of suing Powell over alleged mismanagement of the Fed’s building renovation costs.
“We’re thinking about bringing a suit against Powell for incompetence,” Trump said at the time, arguing that the renovations were excessively expensive. The remarks came as Trump himself was overseeing the demolition of the White House’s East Wing to make way for a new ballroom estimated to cost about $400 million.
The investigation is being led by U.S. Attorney Jeanine Pirro’s office, with FBI agents from the Washington field office assisting, according to people familiar with the case. Pirro, a Trump ally and former television host, has drawn mixed reviews within the Justice Department. While some career officials have praised her handling of high-profile matters, her office has also suffered setbacks, including the acquittal of a man charged with throwing a sandwich at a Customs and Border Protection agent.
On Monday evening, Pirro said her office had contacted the Federal Reserve multiple times about cost overruns and Powell’s congressional testimony but received no response, which she said forced prosecutors to use legal process.
“That is not a threat,” Pirro wrote, adding that “none of this would have happened if they had just responded to our outreach.”
Powell, in a statement released a day earlier, said the investigation was politically motivated.
“No one — certainly not the chair of the Federal Reserve — is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
He described the subpoenas as another attempt to exert control over the Fed’s independence, particularly its authority to set interest rates.
“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 said, adding that he would not resign.
Trump has repeatedly demanded lower interest rates since before the start of his second term and has escalated his criticism of Powell as consumer affordability concerns have grown and midterm elections approach. The Fed cut interest rates three times last year.
Sen. Thom Tillis, R-N.C., said the investigation had crossed a line and vowed to block confirmation of any Federal Reserve nominees until the issue is resolved.
“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,” Tillis said. “It is now the independence and credibility of the Department of Justice that are in question.”
Alexis Loeb, a former Justice Department deputy chief, noted that while opening a grand jury investigation does not require a high evidentiary bar, the system depends heavily on prosecutorial discretion.
“There is a growing list of instances where the administration has been accused of abusing the criminal justice system to intimidate or punish its perceived enemies,” Loeb said.
Federal Housing Finance Authority Director Bill Pulte, a vocal critic of the Fed who previously pushed for an investigation into alleged mortgage fraud by Fed Governor Lisa Cook — allegations she denies — said he had no knowledge of the Powell probe and deferred all questions to the Justice Department.
Traditionally, prosecutors and public officials avoid public commentary on active investigations to prevent politicization. That restraint has not always applied to Trump.
In late September, Trump publicly urged Attorney General Pam Bondi to bring charges against former FBI Director James Comey, Sen. Adam Schiff of California, and New York Attorney General Letitia James. Indictments against Comey and James followed shortly afterward, though Schiff was never charged.
Trump later claimed the message was intended as a private communication and reacted dismissively when he learned it had been made public.
Ultimately, no charges stuck. A federal judge dismissed the cases against Comey and James in November, finding constitutional violations in the appointment of the U.S. attorney who brought the charges. A federal grand jury later declined to indict James for a third time.
Legal experts warned that Trump’s public statements risk undermining prosecutions. Before his case was dismissed, Comey’s lawyers argued he was the victim of vindictive and selective prosecution — a rare but powerful legal claim.
“If there is ever going to be a vindictive prosecution motion that is successful, it will be this motion,” said Patrick J. Cotter, a former federal prosecutor now in private practice.
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