Federal Reserve Chairman Jerome Powell finally confirmed what many fiscal conservatives have suspected for months. The Department of Justice has opened a criminal investigation into his testimony about the Federal Reserve’s wildly overbudget $2.5 billion headquarters renovation in Washington, D.C. Powell acknowledged the probe in a video statement Sunday, calling it “unprecedented” and claiming he is being politically targeted. That defense sounds familiar, and not in a reassuring way.
The renovation project, approved by the Federal Reserve’s Board of Governors back in 2017, was originally expected to cost $1.9 billion. Since then, it has ballooned by roughly $700 million. The Fed insists the increase is due to higher steel and cement costs, along with underground construction expenses. That explanation might pass in a high school civics class, but it does not sit well with lawmakers who expect better financial discipline from the institution that lectures the rest of the country about inflation.
Powell testified before the Senate Banking Committee in June 2025, assuring lawmakers that the renovation costs were justified, transparent, and properly managed. Federal prosecutors are now reviewing whether those statements were accurate. According to reports, the investigation was approved in November by U.S. Attorney Jeanine Pirro, and on Friday, the DOJ served the Federal Reserve with grand jury subpoenas. Those subpoenas reportedly include the possibility of criminal charges tied to false statements to Congress.
In his video response, Powell leaned heavily on process. He emphasized audits, documentation, and oversight by the Fed’s Office of Inspector General. He also insisted the Federal Reserve would continue its mission of managing employment, prices, and interest rates while cooperating with investigators. What he did not do was explain how an institution obsessed with controlling every decimal point of inflation managed to let its own renovation spiral hundreds of millions of dollars out of control.
This investigation lands at a time when the so-called independent Federal Reserve is already under intense scrutiny. Americans have watched inflation crush household budgets while the Fed assured them it was “transitory.” Trust in the central bank is not exactly at record highs, and a criminal probe into its leadership does not help.
It is also worth noting that this did not come out of nowhere. In July, Representative Anna Paulina Luna filed a criminal referral related to Powell’s testimony. Fiscal conservatives have been asking basic questions that deserve answers. If the Federal Reserve cannot manage its own construction project, why should anyone believe it can responsibly manage the entire U.S. economy?
The Justice Department, following standard policy, has said nothing publicly. That silence is appropriate, but the facts already raise serious concerns. A $700 million cost overrun is not pocket change, even for the Federal Reserve. Powell may call this political, but at its core, this is about accountability. The central bank that demands discipline from everyone else is now being asked to show some of its own.
Leave a Comment