Prosecutors from the U.S. attorney’s office in Washington on Tuesday appeared without warning at the Federal Reserve’s headquarters seeking a tour of an active construction site, escalating their probe of the central bank, according to two people familiar with the interaction and a letter from the Fed’s outside counsel reviewed by The Washington Post.
After interacting with construction workers, two prosecutors and an agent from U.S. Attorney Jeanine Pirro’s office were told they would need prior clearance before gaining access and were referred to the Fed’s legal team, according to people familiar with the interaction who spoke on the condition of anonymity because the investigation is ongoing.
The move suggests the Justice Department is not backing down from an investigation into the Federal Reserve and Chair Jerome H. Powell, as President Donald Trump continues to seek ways to reshape the Fed leadership while insisting on lower interest rates.
Robert K. Hur, an outside attorney representing the Fed, pushed back on the visit in a letter to Pirro’s office, citing a federal judge’s ruling last month that quashed two grand jury subpoenas issued to the central bank. In that decision, the judge found that the investigation was a pretextual effort by the Trump administration to pressure Powell to lower interest rates or resign from the independent central bank.
“Should you wish to challenge that finding, the courts provide an avenue for you; it is not appropriate for you to try to circumvent it,” Hur wrote. “I ask that you commit not to seek to communicate with my client outside the presence of counsel.”
Hur’s letter said the prosecutors appeared without prior notice to “check on progress” and asked for a tour.
Pirro’s office has been looking into the Fed’s $2.5 billion overhaul of two historic office buildings overlooking the National Mall, despite a series of legal and political setbacks to the investigation. The investigation also threatens to delay the confirmation of Kevin Warsh, Trump’s pick to replace Powell as Fed chief, when Powell’s term as chair expires in mid-May.
Pirro, in a statement, defended Tuesday’s visit.
“Any construction project that has cost overruns of almost 80 percent over the original construction budget deserves some serious review,” she said in a statement. “And these people are in charge of monetary policy in the United States?”
Pirro is close to Trump and widely seen as a contender to replace Pam Bondi as U.S. Attorney General.
After finding that the Justice Department had not provided any evidence of a crime, Chief U.S. District Judge James E. Boasberg of D.C. ruled last month to quash two subpoenas that prosecutors have described as make-or-break for the criminal investigation. Prosecutors asked the judge to reconsider his ruling. Boasberg denied that request this month, saying nothing had changed. Pirro has vowed to appeal the judge’s ruling, but she has not yet done so and faces a looming deadline. Boasberg’s decision cannot be appealed after May 3.
The Wall Street Journal first reported the interaction at the construction site.
The Senate Banking Committee set a Tuesday hearing to consider Warsh’s nomination. The panel’s chairman, Tim Scott (R-South Carolina) said he expected Pirro’s investigation would end in the coming weeks.
But even with the hearing, the timing of Warsh’s confirmation is uncertain. Sen. Thom Tillis of North Carolina, a key Republican, has said he will not vote for any Fed nominees until the probe is resolved, effectively blocking Warsh from advancing out of the banking panel.
Powell has said he would stay on as acting chair if Warsh isn’t confirmed in time and that he has no intention to step down from the Fed entirely until after the Justice Department probe is finished. Even after he steps down as chair, Powell could elect to stay through early 2028 as one of seven members of the Fed’s board of governors in Washington, depriving the White House of a crucial seat on the board.
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