Jerome Powell Faces DOJ Referral Over Alleged $1.9 billion Perjury Claims

• Perjury accusations against Fed Chair Powell over testimony on renovation costs.
• DOJ referral intensifies political and legal scrutiny on the Fed chair.

On July 18, 2024, The Hill reported that the Department of Justice (DOJ) received a formal criminal referral accusing Federal Reserve Chair Jerome Powell of perjury related to the $1.9 billion renovation of the central bank's headquarters. Republican Representative Anna Paulina Luna of Florida initiated the referral, citing discrepancies between Powell’s testimony before the Senate Banking Committee and the project's initial planning documents.

Powell testified that features such as a “VIP dining room,” “new marble,” “special elevators,” and “new water features” were not part of the current renovation plan. He attributed cost overruns to unforeseen construction challenges, including unexpectedly high levels of asbestos, soil toxicity, and a high water table. However, 2018 planning documents mentioned some of these luxury amenities. This contradiction raises questions about Powell’s accountability and the accuracy of his testimony.

In response to the allegations, Powell stated that the Federal Reserve, not taxpayers, is funding the renovation. He also noted that the Federal Reserve had removed costly features from earlier documents to streamline the project and reduce expenses. Following the criminal referral, Powell requested the Federal Reserve’s inspector general conduct a new review of the project to address public concerns.

Representative Luna’s accusations of misrepresentation have increased scrutiny on Powell, adding to existing criticism of the Federal Reserve’s monetary policies. While the DOJ is not obligated to act on the referral, it represents a formal escalation. Former President Donald Trump suggested the controversy could justify dismissing Powell “for cause.” However, the legal basis for removing a Federal Reserve chair under these circumstances remains untested.

Powell has remained resolute in his commitment to completing his term, stating that only being carried out of the building “in a pine box” would prevent him from doing so. Meanwhile, the DOJ has not indicated whether it will investigate the referral, leaving Powell under mounting political and legal pressure.