Pirro Deputy: 'Do Not Know' About Evidence of Crime in Fed Probe

A top deputy to U.S. Attorney Jeanine Pirro acknowledged in a closed-door hearing that the Justice Department does not have evidence of criminal wrongdoing in its investigation into the $2.5 billion Federal Reserve headquarters overhaul, according to a newly unsealed transcript.

G.A. Massucco-LaTaif, chief of the criminal division in the U.S. attorney's office in Washington, also could not pinpoint inaccuracies that have been claimed about parts of Federal Reserve Chair Jerome Powell's remarks to Congress about the project, according to The Washington Post on Tuesday.

Massucco-LaTaif, when pressed by U.S. District Judge James Boasberg, said that "we do not know at this time" what evidence exists of fraud or misconduct tied to cost overruns at the Fed's headquarters.

"There are 1.2 billion reasons for us to look into it," Massucco-LaTaif said, referring to the project's cost overruns. "It doesn't seem right."

He also said that there are "certain areas" that Powell addressed about the project that "caused concern," but added that "we don't know" which parts of the remarks raised questions.

Massucco-LaTaif reportedly cast some doubts on President Donald Trump's recent public claim that "there is criminality" tied to the renovation project.

Trump said last week the project could have been completed for $25 million and suggested wrongdoing, adding, "Maybe it's with the contractor."

The investigation began after Powell testified before Congress last year about the renovation's costs.

Prosecutors have reviewed roughly 600 documents submitted by the Fed and are examining whether cost overruns could constitute fraud or whether Powell misled lawmakers.

A spokesperson for the U.S. attorney's office said the inquiry remains ongoing.

"The purpose of a grand jury investigation is to determine whether there is probable cause that a crime was committed. That is exactly what we are doing here," the spokesperson said.

At the center of the dispute are two grand jury subpoenas issued by Pirro's office.

Boasberg quashed both this month, writing that prosecutors had provided "essentially zero evidence" of a crime and declined to present supporting material even in private.

He described the subpoenas as an improper effort to pressure Powell.

"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," Boasberg wrote.

Pirro's office has said it plans to appeal the ruling and has asked the judge to reconsider, though such requests are rarely granted.

The Fed declined to comment.

In legal filings, attorneys for the central bank said cost overruns are common in large federal construction projects and do not indicate criminal activity.

They pointed to other major projects, including the Department of Homeland Security's St. Elizabeth campus and the Capitol Visitor Center, which also exceeded initial budgets.

"Nothing about cost overruns for such a project is unusual or indicative of criminal activity," Fed attorneys wrote, citing rising labor and material costs, asbestos issues, and the challenges of renovating historic buildings.

The dispute has added to tensions between the administration and the independent central bank, while also complicating the confirmation of Kevin Warsh, Trump's nominee for Fed chair.

Sen. Thom Tillis, R-N.C., has said he will block the nomination until the matter involving Powell is resolved.

Stephen Moore, a longtime Trump adviser, said the standoff risks undermining the administration's broader goals.

"A rivalry has emerged that is really counterproductive at this point," Moore said. "The most important thing for Trump is to put aside disputes with Powell and get the new Fed chairman Kevin Warsh confirmed as quickly and expeditiously as possible."