House GOP adds to chorus criticizing DOJ investigation into Fed’s Powell

(The Hill) — Some House Republicans have joined in criticizing the Department of Justice's probe into Federal Reserve Chair Jerome Powell, arguing that it could undermine the regulator's independence.

Those GOP members join a chorus of Democrats and some Republican senators who have criticized the investigation, arguing it's an abuse of the Justice Department's authority meant to pressure Powell, who has resisted President Trump's calls to lower interest rates.

"I know Mr. Powell to be a man of integrity with a strong commitment to public service. While over the years we have had our policy disagreements, I found him to be forthright, candid, and a person of the highest integrity," House Financial Committee Services Chairman French Hill (R-Ark.) said in a statement.

"Pursuing criminal charges relating to his testimony on building renovations at a time when the nation's economy requires focus creates an unnecessary distraction," Hill added. "The Federal Reserve is led by strong, capable individuals appointed by President Trump, and this action could undermine this and future Administrations' ability to make sound monetary policy decisions."

The DOJ's investigation into Powell relates to his testimony before the Senate Banking Committee last year. Powell had discussed the renovation of the central bank's Marriner S. Eccles and Federal Reserve Board East buildings. Erected in the 1930s, they have not been renovated since opening.

The project, initially estimated to cost $1.9 billion, began in 2022.

But the cost of the renovation has risen to $2.5 billion, with the central bank citing changes to the designs of the buildings, higher costs for materials, equipment and labor than initially projected and "unforeseen conditions," such as more asbestos than anticipated, toxic soil contamination and a sinkhole.

Powell himself confirmed he received a subpoena, but said while figures like him are not above the law, he said the specter of charges "should be seen in the broader context of the administration's threats and ongoing pressure."

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," he said in a Sunday video address.

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation."

Rep. Kevin Kiley (R-Calif.) told reporters on Tuesday that while he doesn't know the facts of the specific case, "usually when we're talking about buildings cost overruns, that's a matter for congressional oversight."

"So it's quite unusual to have this approach to that particular issue, and I do think it should go without saying that the independence of the Federal Reserve is absolutely foundational. That's a cornerstone of our economic system here, and we need to defend it," Kiley said.

Rep. Brian Fitzpatrick (R-Pa.), a former FBI agent, told The Hill he saw the DOJ's investigation as 'suspect' and would want to see the justification for the case.

A number of Senate Republicans also defended Powell.

"If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question," Sen. Thom Tillis (R-N.C.) said in a statement.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) argued the attacks on Powell are merely part of a broader Trump strategy to divert the public's attention away from the many controversies swirling around his second term, including the president's invasion of Venezuela and his previous friendship with late child sex offender Jeffrey Epstein.

"This administration is doing everything in their power to distract from working people, to distract from the pedophilia ring that they are currently covering for," Ocasio-Cortez said. "They are doing everything to throw the kitchen sink, whether it's invading other countries, or whether it's impulsively tweeting out new policy proposals, or whether it's threatening to extort the chairman of the Federal Reserve in order for them to get people to not believe what people are seeing with their own eyes and hearing with their own ears."

Under the Trump administration, the Justice Department has launched a number of probes into Trump's perceived political foes. On investigations related to mortgage fraud alone, the Justice Department has launched charges against New York Attorney General Letitia James (D) and Federal Reserve Board of Governors member Lisa Cook, while opening probes into Reps. Adam Schiff and Eric Swalwell, both Democrats of California.

Separately, the Trump administration brought charges against former FBI Director James Comey, alleging he lied to Congress. That case, as well as the one brought against James, was tossed by a judge after finding the U.S. attorney who filed the case was unlawfully appointed.

DOJ has also brought charges against former national security adviser John Bolton and is investigating both former CIA Director John Brennan and former Director of National Intelligence James Clapper.

However, not all opposed reviewing Powell, noting the investigation is at an early stage.

"I have long said the Fed needs to be audited, and I would even support ending it. I'm not a fan of the Federal Reserve," Rep. Eric Burlison (R-Mo.), a member of the far-right House Freedom Caucus, said.

"We've turned over a large part of our economy and a lot of major decisions over to this entity that is not accountable to the taxpayers whatsoever," Burlison added.

Rep. Nick LaLota (R-N.Y.) said that "it's just an investigation, at this point. It's not an indictment."

"And Jerome Powell…is advocating for 2.5 billion dollars of costs. That's more than a Yankee Stadium for a federal office building. I think that's worthy of investigation. Certainly, if he lied to Congress, that's worthy of an investigation. Because 2.5 billion dollars (is) a heck of a lot of money for a simple federal office building," he said.

"I think the truth will set Chairman Powell free. If he's done nothing wrong, if he's not involved in fraud, if he didn't lie to Congress, the truth will set him free. That's not a weapon. That's just how our system works," he added.

Mike Lillis contributed.

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