Jay Powell wrote to senators last July with details about the Federal Reserve’s $2.5bn renovation project, according to a letter seen by the FT, complicating the Trump administration’s claims that he misled Congress.
The four-page letter, which has not been previously reported, was sent two and a half weeks after the chair of the central bank testified to the Senate banking committee about the project’s cost overruns.
Powell is the subject of a Department of Justice criminal investigation over testimony he delivered to the committee on June 25 about the revamp of the central bank’s headquarters.
President Donald Trump and other senior administration officials, including Office of Management and Budget head Russell Vought, have accused the Fed chair of misleading Congress over the size and scale of changes to the renovations. The Fed’s board first approved the project in 2017 and the work is set for completion next year.
Powell on Sunday said the DoJ asked a federal grand jury to subpoena the Fed, a step that could ultimately lead to an indictment.
Jeanine Pirro, US attorney for the District of Columbia, who is overseeing the criminal probe, said her office had called for the subpoenas in part to find more information about “the chairman’s congressional testimony” related to the project. She alleged her office had sought information on “multiple occasions” but was “ignored”.
The Fed received two emails over the holidays from a member of staff at the US attorney’s office in Washington, which did not mention a criminal investigation, said a person familiar with the matter.
The letter Powell sent to the powerful Senate banking committee suggests the central bank chief had provided extensive answers to lawmakers in response to their questions.
“The board believes it is of the utmost importance to provide transparency for our decisions and to be accountable to the public through the Congress for our work,” Powell wrote in the letter, which was addressed to Senate banking committee chair Tim Scott, and Elizabeth Warren, the top Democrat on the panel.
“We take seriously our commitment to transparency. We respect the critical importance of the constitutionally-derived congressional oversight of our activities, and we are committed to working collaboratively and cooperatively with you.”
The Fed declined to comment, while a spokesperson for Scott did not respond to a request for comment.
Warren’s spokesperson declined to comment, but pointed to the senator’s previous statement on the DoJ investigation, accusing the president of “abusing the authorities” of the justice department “so the Fed serves his interests”.
The $2.5bn renovation project of the Fed’s 1930s headquarters and next-door building is over budget by about $700mn.
Powell told the banking committee in June that the Fed had scrapped some of the original elements of its plans — such as water features, beehives and rooftop terraces — in an attempt to keep costs under control.
In the July letter, Powell said “various factors” had driven up costs for the multiyear renovation project, including higher prices for materials, equipment and labour, as well as “unforeseen condition in the properties”, including asbestos, toxic contamination in the soil and a higher than expected water table.
“We take seriously the responsibility to be good stewards of public resources as we fulfil the duties given to us by Congress on behalf of the American people,” Powell added, noting that an inspector-general also had “full access” to information about the project.
Ten days after sending the letter to lawmakers, Powell gave Trump, Scott and other White House officials a tour of the renovation site on July 24.
Powell on Sunday said the Fed had “made every effort to keep Congress informed about the renovation project”.
The Fed chair, who was appointed by Trump in his first term, has described the justice department’s “unprecedented action” as part of a series of threats and pressure from a White House that wants interest rates to be set lower.
Trump has denied being involved in the DoJ investigation. But the president has continued to disparage Powell and call for his departure, even as a growing number of Republican lawmakers on Capitol Hill have rebuked his administration’s attempts to go after the Fed chair.
The president is expected to name his pick to succeed Powell in the coming weeks. Powell’s term as Fed chair is due to expire in May.
Speaking to reporters as he left the White House on Tuesday morning, Trump said Powell was “either . . . incompetent or . . . crooked”, adding: “I don’t know what he is, but he certainly doesn’t do a very good job.”
Trump — who is overseeing a renovation of the White House’s East Wing with a projected cost of $400mn — later called the Fed renovations the “most expensive construction job in history”, and claimed he “could have done that job for $25mn”.
“They’re spending billions and billions of dollars,” the president told reporters while touring a Ford car plant in Detroit. “[Powell] either doesn’t know what he’s doing or it’s worse than that. Hopefully he’ll be out of there soon.”
Additional reporting by Abigail Hauslohner in Detroit