March 24, 2026 — A sealed transcript of a closed hearing shows a Justice Department prosecutor privately acknowledged there was no evidence of a crime in the federal inquiry into the Federal Reserve’s multibillion-dollar renovation project.
Assistant U.S. Attorney Andrew Massucco told Chief Judge James Boasberg at a March 3 hearing that investigators had not identified false statements by Fed Chair Jerome Powell or proof of fraud tied to the renovations. When the judge pressed for specifics—asking what false statements Powell had made before Congress—Massucco answered, “We don’t know.” When asked what evidence there was of fraud, Massucco again said investigators did not know but added, “However, there are 1.2 billion reasons for us to look into it,” referencing alleged cost increases.
Eight days after that hearing, Boasberg quashed government subpoenas directed at the Federal Reserve, calling the government’s showing so thin that it produced “essentially zero evidence” to suspect Powell of a crime. In his March 11 ruling, the judge questioned whether the subpoenas were being used to exert political pressure rather than to pursue legitimate investigative leads.
Boasberg wrote that a “mountain of evidence” suggested the subpoenas were intended to pressure the Fed’s chair into supporting lower interest rates or to compel his resignation. Massucco disputed that characterization, telling the court the government’s motive was simply to get to the truth and that the office had the right to investigate.
Lawyers for the Fed argued the subpoenas fit a broader pressure campaign tied to President Trump’s public push for lower rates. Robert Hur, representing the Federal Reserve board at the hearing, raised that concern. Jeanine Pirro, who leads the U.S. Attorney’s office in Washington, criticized Boasberg as an “activist judge,” accused him of hamstringing the grand jury’s work and said the office would appeal, calling the ruling improper and without legal authority. A Fed spokesperson declined to comment.
The probe centered on Powell’s brief June testimony to the Senate Banking Committee about cost overruns on the Fed’s campus renovation. The Fed’s latest estimate puts the project at roughly $2.5 billion, about $600 million higher than a $1.9 billion estimate from 2022.
The transcript’s release was first reported by The Washington Post. The investigation has also complicated Senate consideration of Kevin Warsh, President Trump’s nominee to replace Powell when his term ends May 15; Powell can remain chair past that date until a successor is confirmed.
Boasberg said the Justice Department declined his offer to submit additional evidence directly to the court—an option he proposed to avoid revealing investigative material to the Fed or Powell—leaving the judge unconvinced that the government was pursuing suspicious facts rather than targeting a disfavored official.