A federal prosecutor has conceded that the Justice Department's investigation into a $2.5 billion renovation project at the Federal Reserve has uncovered no evidence of a crime, according to a transcript of a sealed court hearing. Assistant U.S. Attorney Andrew Massucco made the admission during a March 3 hearing before Chief Judge James Boasberg, who later quashed government subpoenas issued to the central bank.
In his March 11 ruling, Judge Boasberg stated that prosecutors had produced “essentially zero evidence” to suspect Fed Chair Jerome Powell of criminal misconduct. He described the justification for the subpoenas as “thin and unsubstantiated.” The investigation has delayed Senate consideration of Kevin Warsh, President Donald Trump’s nominee to replace Powell when his term ends May 15.
During the hearing, Boasberg pressed Massucco on any evidence of false statements by Powell or fraud related to the renovations. Massucco replied, “We don’t know,” adding that cost overruns of $1.2 billion warranted further inquiry. The judge noted that the government rejected his offer to submit additional evidence directly to him, leaving him with “no credible reason to think that the Government is investigating suspicious facts as opposed to targeting a disfavored official.”
Robert Hur, an attorney for the Federal Reserve Board of Governors, argued that the subpoenas were part of a pressure campaign to support Trump's push for lower interest rates. U.S. Attorney Jeanine Pirro, a Trump appointee, criticised Boasberg as an “activist judge” and vowed to appeal, claiming he had “neutered the grand jury’s ability to investigate crime.”
