Jeanine Pirro will be sworn in as the new interim U.S. attorney for the District of Columbia at a ceremony hosted by U.S. President Donald Trump at the White House in Washington, DC, on May 28, 2025.
Leah Millis | Reuters
Federal prosecutors are continuing to put pressure on the Federal Reserve over the Trump administration’s allegations of irregularities in the ongoing renovation of the building, as well as Powell’s testimony to Congress about it. But legal experts say the investigation by U.S. Attorney Jeanine Pirro for the District of Columbia appears to be stalling, and she is running out of time to appeal the judge’s ruling against her.
Investigators from Mr. Pirro’s office visited the Fed’s construction site on Tuesday, according to a memo sent by the Fed’s legal team to prosecutors and seen by CNBC. Federal Reserve lawyer Robert Herr wrote in a memo that the agents showed up “without prior notice” and requested an inspection.
“Construction projects with cost overruns of almost 80% over the original construction budget deserve a serious review,” Pirro said in a statement to CNBC.
The visit by law enforcement officials marks an important juncture in the investigation into Mr. Pirro. Chief Judge James E. Boasberg of the U.S. District Court for the District of Columbia ruled last month that prosecutors did not meet the low bar for subpoenaing the Feds. He rescinded the subpoena issued by Pirro’s office and on April 3 denied a request by prosecutors to appeal the order.
Under the Court of Appeals’ rules, Pirro has 30 days to appeal Boasberg’s decision to cancel the subpoena. That would set May 4 as the date by which the Senate could try to move forward with an initial vote on a nominee to replace Mr. Powell, former Fed director Kevin Warsh.
The fate of Mr. Warsh’s nomination is tied to Mr. Powell’s investigation. Sen. Thom Tillis (R-North Carolina) said by Tuesday he would vote against continuing the investigation into Mr. Warsh as long as Mr. Pirro’s investigation remains open. Tillis and Powell described the investigation as an attempt to bully the Fed into lowering interest rates.
Congress gave the Fed the power to set interest rates independently of politics because it is common practice to keep them low despite the potential risk of inflation.
Mr. Warsh is scheduled to testify before the Senate Banking Committee on April 21, but it is unclear what will happen next because Mr. Tillis has blocked his confirmation. A public hearing is a step the committee takes before voting on candidates.
The investigators’ visit to the Fed, first reported by the Wall Street Journal, may have been an attempt to break the impasse.
Prosecutors in Mr. Pirro’s office told Mr. Boasberg in March that the Justice Department “doesn’t know” whether Mr. Powell acted inappropriately and rejected the judge’s offer to present charges without an attorney present. Boasberg also ruled that the prosecutor’s subpoena was unwarranted because the government “has not presented any evidence of fraud.”
Daniel Richman, head of the appellate division of the U.S. Attorney’s Office for the Southern District of New York and a law professor at Columbia University, said that without some new evidence, Pirro’s investigation of Powell will not withstand judicial scrutiny.
Mr. Boasberg’s order did not bar the government from investigating, but it was clear that the court wanted to see solid evidence.
Richman said Boasberg “left room for the government to move forward with appropriate screenings.” “In fact, the government’s refusal to release it is one of the reasons why this order is so difficult to appeal.” Richman said he believes the appeals court will conclude that Boasberg was correct in finding that prosecutors did not meet the minimum standards for issuing a grand jury subpoena.
Pirro said he believes he has room to move forward. A person familiar with Ms. Pirro’s thinking, speaking on condition of anonymity to discuss private discussions about the ongoing investigation, said she “certainly can continue with the investigation.”
“The appeal against the judgment only concerns the issuance of the summons,” the person said.
For this reason, there remains the possibility that the deadline for appealing the case will expire without a clear conclusion to the investigation. Both Tillis and Powell say a quiet exit is not enough. They want to see a positive ending. Without that, Tillis could leave Warsh stuck until the senator retires from Congress in January.
Pirro said he believes the Fed’s headquarters renovation cost overruns are enough reason to continue investigating the central bank.
Meanwhile, President Donald Trump continues to insist that Powell did something wrong. President Trump said Wednesday that he would fire Powell “if he does not leave office on time.” Powell’s term as chairman ends on May 15, but he can remain on the board until January 2028.
President Trump is also searching for a new attorney general after firing Pam Bondi earlier this month. Politico reported that Pirro is among the candidates to replace Bondi.
Pirro said in a press conference last week that he is happy with his current job.
—CNBC’s Steve Liesman contributed to this report.
