Just as the Department of Justice was preparing to file criminal charges, the Financial Times disclosed a previously sealed letter: Powell had already detailed the allocation of the $2.5 billion renovation funds as early as last July...
According to a letter seen by the Financial Times, Federal Reserve Chair Jerome Powell wrote to senators in July of last year, detailing the Fed's $2.5 billion renovation project, which complicates the Trump administration's claims that he misled Congress.
This previously unreported four-page letter was sent two and a half weeks after the central bank chief testified before the Senate Banking Committee about the project's cost overruns. Powell is currently under criminal investigation by the Justice Department for his testimony on June 25 last year regarding the renovation of the central bank's headquarters.
President Donald Trump and other senior administration officials, including Office of Management and Budget (OMB) Director Russell Vought, have accused the Fed Chair of misleading Congress about the scale and scope of the renovation work. The Board of Governors initially approved the project in 2017, with completion scheduled for next year.
Powell stated last Sunday that the Justice Department had asked a federal grand jury to issue a subpoena to the Fed, a move that could ultimately lead to prosecution.
Jeanine Pirro, the Washington D.C. federal prosecutor overseeing the criminal investigation, said her office requested the subpoena partly to seek more information related to the "Chair's congressional testimony" about the project. She claimed her office had sought information on "multiple occasions" but was "ignored."
According to informed sources, the Fed received two emails from a staffer at the Washington Federal Prosecutor's Office during the holidays, which did not mention a criminal investigation. Powell's letter to the influential Senate Banking Committee indicates that the central bank chief had provided exhaustive answers to lawmakers' questions.
"The Board believes it is critical to provide transparency for our decisions and to be accountable to the public through Congress for our work," Powell wrote in the letter to Senate Banking Committee Chair Tim Scott and the committee's Democratic leader, Elizabeth Warren. "We take our commitment to transparency seriously. We respect the constitutional importance of Congress's oversight of our activities, and we are committed to working with you cooperatively and collaboratively."
A spokesperson for Warren declined to comment but referenced the senator's previous statement on the DOJ investigation, accusing the president of "abusing" the power of the Justice Department "to make the Fed serve his interests."
The Fed's $2.5 billion renovation of its 1930s-era headquarters and the adjacent building is now approximately $700 million over budget. Powell told the banking committee last June that the Fed had eliminated some originally planned elements, such as water features, beehives, and a rooftop terrace, in an attempt to control costs.
In this July letter from last year, Powell stated that "multiple factors" had driven up the cost of the multi-year renovation project, including rising prices for materials, equipment, and labor, as well as "unforeseen conditions at the property," including asbestos, toxic contaminants in the soil, and a higher-than-expected water table.
"We take seriously our responsibility to be good stewards of public resources as we carry out the duties assigned to us by Congress on behalf of the American people," Powell added, noting that the Inspector General also had "full access" to project information.
Ten days after sending the letter, on July 24, Powell accompanied Trump, Scott, and other White House officials on an inspection tour of the renovation site.
Powell said last Sunday that the Fed had "done everything possible to keep Congress informed about the renovation project." The Fed Chair, appointed during Trump's first term, described the Justice Department's actions as an "unprecedented move," part of a series of threats and pressures from the White House aimed at forcing interest rates lower.
Trump has denied involvement in the Justice Department's investigation but continues to disparage Powell and calls for his resignation, despite growing condemnation from Republican lawmakers on Capitol Hill against the administration's targeting of the Fed Chair. Trump is expected to nominate Powell's successor in the coming weeks. Powell's term as Fed Chair expires in May.
On Tuesday morning, while leaving the White House, Trump told reporters that Powell was "either... incompetent, or... dishonest," adding, "I don't know which one he is, but he's certainly not doing a good job."
Trump, who is currently overseeing a $400 million renovation of the East Wing of the White House, again called the Fed's renovation "the most expensive construction job in history" when discussing the topic, claiming he "could do it for $25 million." "They are wasting billions and billions of dollars," Trump told reporters while inspecting a Ford factory in Detroit. "(Powell) either doesn't know what he's doing, or it's something worse than that. Hopefully, he'll be gone soon."
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