Federal Prosecutor Admits ‘Essentially Zero Evidence’ in Politically Charged Fed Probe
WASHINGTON (AP) — A federal prosecutor has privately conceded there was “essentially zero evidence” of criminal wrongdoing in the Justice Department’s investigation into a sprawling $2.5 billion renovation project at the Federal Reserve. This critical admission, made under intense questioning by a skeptical federal judge, ultimately led to the quashing of government subpoenas, delivering a significant blow to the politically charged probe.
Judge Quashes Subpoenas After Damning Admission
Assistant U.S. Attorney Andrew Massucco, chief of the criminal division for U.S. Attorney Jeanine Pirro’s Washington office, made the revelation during a closed-door proceeding on March 3. Just eight days later, on March 11, Chief Judge James Boasberg, an appointee of Democratic President Barack Obama, forcefully quashed the government’s grand jury subpoenas issued to the Federal Reserve. His ruling, now revealed in detail, casts severe doubt on the integrity and motive behind the investigation.
During the sealed hearing, Judge Boasberg pressed Massucco repeatedly for specific evidence of fraud or criminal misconduct, either related to Federal Reserve Chair Jerome Powell’s congressional testimony about the project or the construction work itself. “So what false statements did (Powell) make before Congress?” the judge inquired. Massucco conceded, “Well, we don’t know is my first answer. However, there are certain areas that he addressed that caused concern.” When asked for evidence of fraud or criminal misconduct in the renovations, Massucco could only state, “Again, we do not know at this time. However, there are 1.2 billion reasons for us to look into it,” referring to the massive cost overruns.
The $2.5 Billion Renovation and Its Escalating Costs
The core of the Justice Department’s inquiry revolved around a $2.5 billion renovation of the Federal Reserve’s headquarters, a project that had spiraled significantly over budget. Initial estimates in 2022 had pegged the cost at $1.9 billion, meaning the current figure represented a substantial $600 million increase. The investigation was reportedly sparked by Powell’s brief testimony last June before the Senate Banking Committee, where he addressed these escalating costs.
Political Motivations Alleged in Independent Institution
The investigation, driven by Pirro’s office, had far-reaching political implications. It had, for instance, delayed Senate consideration of Kevin Warsh, President Donald Trump’s preferred candidate to succeed Powell. Powell’s term as chair was set to expire on May 15, though he could remain in the position if a replacement wasn’t confirmed. Robert Hur, an attorney representing the Federal Reserve board of governors at the March 3 hearing, explicitly argued that the subpoenas were part of a politically motivated campaign to pressure Powell into either supporting lower interest rates or resigning, thereby circumventing the Federal Reserve’s established independence in monetary policy. Massucco, however, maintained that the prosecutors’ motive was “anything other than trying to find the truth of the matter,” asserting their right to investigate.
U.S. Attorney Condemns Judge’s Decision
U.S. Attorney Jeanine Pirro, a former Fox News host and Trump’s appointee to lead one of the nation’s largest U.S. Attorney’s offices, vehemently condemned Judge Boasberg’s decision. In a news conference earlier this month, she lambasted him as an “activist judge” who had “neutered the grand jury’s ability to investigate crime” and vowed to appeal his ruling. “This is wrong and it is without legal authority,” Pirro declared.
Judge Finds No Merit in Government’s Pursuit
Despite the Justice Department’s insistence, Judge Boasberg ultimately found no merit in their pursuit. In his final ruling, he revealed that the government had even rejected his offer to submit further evidence against Powell directly and privately, thus preventing the need to disclose their strategy to the Fed. This refusal solidified the judge’s conclusion: “The Court is thus left with no credible reason to think that the Government is investigating suspicious facts as opposed to targeting a disfavored official.” The Federal Reserve, through a spokesperson, declined to comment on the matter this week.
