WASHINGTON \u2014 Late last year, as President Donald Trump was publicly intensifying his attacks against Federal Reserve and Chairman Jerome Powell, federal prosecutors quietly began a criminal investigation. And when subpoenas were ready, three sources told NBC News, they kept the circle small.<\/p>\n\n\n\n
The U.S. Attorney\u2019s Office for the District of Columbia didn\u2019t contact main Justice Department officials, the White House or the Treasury Department before it issued subpoenas involving the renovation of Federal Reserve office buildings, according to the three people familiar with the investigation, who spoke to NBC News on condition of anonymity. The probe began in November, they said.<\/p>\n\n\n\n
The investigation, which Powell confirmed Sunday evening, is the latest instance in which Trump\u2019s Justice Department has been accused of using the criminal justice system to punish or intimidate his perceived enemies. Powell has said that federal prosecutors threatened an indictment.<\/p>\n\n\n\n
In a phone call with NBC News, Trump said he knew nothing about the investigation before he attacked Powell again.<\/p>\n\n\n\n
\u201cWhat should pressure him is the fact that rates are far too high,\u201d Trump said. \u201cThat\u2019s the only pressure he\u2019s got.\u201d<\/p>\n\n\n\n
But in late December, Trump telegraphed upcoming legal action against Powell.<\/p>\n\n\n\n
\u201cWe\u2019re thinking about bringing a suit against Powell for incompetence,\u201d he said, arguing that the Federal Reserve building renovations were costing too much. Coincidentally, Trump has torn down the East Wing of the White House and is building a ballroom in its place that would cost an estimated $400 million.<\/p>\n\n\n\n
U.S. Attorney Jeanine Pirro\u2019s office is heading the investigation, and FBI agents at the Washington field office are working on it, the people said.<\/p>\n\n\n\n
Pirro, a Trump ally and former Fox News host, has received some praise from career Justice Department officials because of her handling of high-profile incidents like the killing of two Israeli Embassy employees. But her office has also notched some losses. In November, a jury acquitted a man known as \u201csandwich guy,\u201d who tossed a Subway hoagie at a Customs and Border Protection agent who was patrolling on the streets of Washington at Trump\u2019s order.<\/p>\n\n\n\n
Pirro posted on X Monday evening that her office had contacted the Federal Reserve “on multiple occasions to discuss cost overruns and the chairman\u2019s congressional testimony, but were ignored, necessitating the use of legal process \u2014 which is not a threat.”<\/p>\n\n\n\n
She said “none of this would have happened if they had just responded to our outreach.”<\/p>\n\n\n\n
Powell said in a statement a day earlier that the move by prosecutors was very much political.<\/p>\n\n\n\n
\u201cNo one\u2014certainly not the chair of the Federal Reserve\u2014is above the law,\u201d Powell said. \u201cBut this unprecedented action should be seen in the broader context of the administration\u2019s threats and ongoing pressure.\u201d<\/p>\n\n\n\n
He said the Justice Department\u2019s subpoenas were just the latest way for the administration to exert control over the Fed and its decisions about interest rates.<\/p>\n\n\n\n
\u201cThe 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,\u201d Powell said, indicating he would not step down despite the investigation.<\/p>\n\n\n\n
Since before the start of his second term, Trump has demanded lower interest rates and routinely attacked Powell and the central bank\u2019s other top officials, ramping up his criticism as an affordability crisis hit consumers and critical midterm elections are looming.<\/p>\n\n\n\n
The Fed cut interest rates three times last year.<\/p>\n\n\n\n
Sen. Thom Tillis, R-N.C., said he would not vote to confirm any nominee for the Federal Reserve, including for the position of chair, until the legal issue was resolved.<\/p>\n\n\n\n
\u201cIf there were any remaining doubt whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,\u201d Tillis said in a statement. \u201cIt is now the independence and credibility of the Department of Justice that are in question.\u201d<\/p>\n\n\n\n
Alexis Loeb, a former Justice Department deputy chief, said that while it doesn\u2019t take much evidence to open a grand jury probe, the system \u201crelies on prosecutors\u2019 and agents\u2019 exercise of discretion\u201d to wield that power fairly.<\/p>\n\n\n\n
\u201cThere is a growing list of instances where the administration has been accused of abusing the criminal justice system to intimidate or punish its perceived enemies,\u201d Loeb said.<\/p>\n\n\n\n
Federal Housing Finance Authority Director Bill Pulte, a critic of the Fed who sparked a federal investigation into allegations of mortgage fraud by Fed Gov. Lisa Cook \u2014 allegations she denies \u2014 said Monday that he didn\u2019t know anything about the investigation.<\/p>\n\n\n\n
\u201cThe DOJ is outside of my purview; this is out of my purview. I don\u2019t know anything about it, and I would defer you to the DOJ,\u201d he said in an interview with Bloomberg Television.<\/p>\n\n\n\n
Federal prosecutors \u2014 and public officials \u2014 tend to keep publicly mum about ongoing investigations, in part so they don\u2019t taint the investigations with political opinions. That is not always the case with Trump.<\/p>\n\n\n\n
In late September, Trump publicly called on Attorney General Pam Bondi to bring charges against former FBI Director James Comey, Sen. Adam Schiff, D-Calif., and New York Attorney General Letitia James. Comey and Schiff were indicted shortly after. James was indicted in October.<\/p>\n\n\n\n
\u201cWhat about Comey, Adam \u2018Shifty\u2019 Schiff, Leticia???\u201d Trump wrote on Truth Social. \u201cThey\u2019re all guilty as hell, but nothing is going to be done.\u201d He said that \u201cwe can\u2019t delay any longer, it\u2019s killing our reputation and credibility.\u201d<\/p>\n\n\n\n
Trump addressed the post to \u201cPam,\u201d writing: \u201c\u201cThey impeached me twice, and indicted me (5 times!), OVER NOTHING. JUSTICE MUST BE SERVED, NOW!!!\u201d<\/p>\n\n\n\n
Trump meant the missive as a direct message, not a post, according to an administration official, and reacted to the discovery that it was public by saying, \u201cOh,\u201d and then tried to shrug it off.<\/p>\n\n\n\n
No action has been taken in Schiff\u2019s case. U.S. District Judge Cameron McGowan Currie dismissed Comey\u2019s and James\u2019 cases in late November, after he found the Justice Department had violated the Constitution by appointing the U.S. attorney who brought the charges.<\/p>\n\n\n\n
Officials hinted Monday that they were looking at Comey’s case again. A federal grand jury refused to indict James in December, the third such attempt to prosecute her.<\/p>\n\n\n\n
Public pronouncements by Trump and his allies have threatened to jeopardize some of the federal cases against his enemies. Before Comey\u2019s case was dismissed, his attorneys had argued the case against him was a vindictive and selective prosecution, a legal reason to have the charges thrown out.<\/p>\n\n\n\n
A former federal prosecutor called Comey\u2019s argument the \u201crarest of all beasts\u201d because it appeared to be strong enough to overcome the high legal burden.<\/p>\n\n\n\n
\u201cIf there is ever going to be a vindictive prosecution motion that is successful, it will be this motion,\u201d Patrick J. Cotter, a former federal prosecutor who is now a partner at UB Greensfelder, told NBC News.<\/p>\n\n\n\n