Prosecutor admits to having no evidence of crime in Fed renovation

by · UPI

March 25 (UPI) -- A federal prosecutor told a judge in Washington, D.C., that his office had no evidence of a crime committed by the Federal Reserve earlier this month in its investigation of the renovation of the Fed.

"What evidence is there of fraud or criminal misconduct in relation to the renovations?" Chief U.S. District Judge James E. Boasberg asked prosecutor George A. Massucco-LaTaif at a previously sealed hearing on March 3.

"We do not know at this time," Massucco-LaTaif said, according to a now-unsealed transcript of the court proceedings, first reported by The Washington Post. "However, there are 1.2 billion reasons for us to look into it."

When Boasberg pressed on, Massucco-LaTaif admitted "we don't know" which of Powell's statements from his congressional testimony in June were false.

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"There are certain areas that he addressed that caused concern," Massucco-LaTaif said.

"$1.2 billion, that's the GDP of some smaller countries, yet we are going to overlook it as, oh, it's just overrun because it's a historical building? That doesn't seem right," Massucco-LaTaif told Boasberg.

"And are we prohibited from looking into it? That would seem to, you know, put a chilling effect on any investigation the government ever did," he added.

A spokesperson for the U.S. attorney's office, led by Jeannine Pirro, told The Post that the purpose of a grand jury investigation is to determine if there is probable cause.

"That is exactly what we are doing here as we investigate the discrepancies in Federal Reserve Chair Jerome H. Powell's testimony before Congress and the billion-dollar-plus cost overrun," the spokesperson said.

The Department of Justice began a criminal investigation in January into Powell's testimony last year about the renovations. Powell said the investigations were "pretexts" to punish him and the Fed after it did not set interest rates where President Donald Trump wanted them.

After the March 3 hearing, Boasberg released an opinion on March 11 in which he quashed two subpoenas.

"The Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual," Boasberg wrote in the opinion.

"Indeed, most members of the committee that Powell testified before -- including a majority of each party's members, as well as the committee's chair -- have said that they do not think he committed any crime," the judge wrote.

President Donald Trump told reporters last week during the visit with the Japanese Prime Minister that the renovation at the Fed could have been accomplished for $25 million.

"They're spending $4 billion. All right? So it's, uh -- there is criminality," Trump said. "Maybe it's with the contractor."

Prosecutors have said in court that the renovation's cost is estimated at $2.5 billion.

Pirro has said the Justice Department will appeal the quashed subpoenas, and the U.S. attorney's office filed a request for Boasberg to reconsider his ruling.

Powell's term as chair ends in May, and Trump has appointed Kevin Warsh to replace him. It's unclear if Powell will stay on the board as a governor for the rest of his term.

Sen. Thom Tillis, R-N.C., said he would block Warsh's nomination in the Senate until the investigation of Powell is dropped. His stance could block the nomination from consideration by the Senate.

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