Federal Reserve Challenges Justice Department Subpoenas in Court Over Headquarters Renovation Probe

2026-03-01 politics

Washington D.C., Saturday, 28 February 2026.
The Federal Reserve’s move to quash DOJ subpoenas regarding headquarters renovations has stalled the confirmation of Trump’s nominee, Kevin Warsh, as lawmakers question the investigation’s political motives.

A Deadlocked Legal Battle

The legal confrontation between the Federal Reserve and the Department of Justice has intensified, with the central bank now engaging in a closed-door effort to quash grand jury subpoenas issued by U.S. Attorney for the District of Columbia Jeanine Pirro [1][5]. As of late February 2026, the two entities remain in a standoff that has dragged into its second month, following the initial issuance of subpoenas in January [2]. The dispute, which is playing out in sealed proceedings, centers on demands for documents related to Federal Reserve Chair Jerome Powell’s past testimony regarding the institution’s massive headquarters renovation project [3][5]. While the specific legal arguments remain confidential, the Fed is reportedly challenging the scope of the requests, a move that signals the unlikeliness of a quick resolution to the probe [1][2].

A Multi-Billion Dollar Bone of Contention

At the heart of the investigation lies the extensive and increasingly expensive renovation of the Federal Reserve’s Washington headquarters, which encompasses the 1937 Marriner S. Eccles Building and the 1931 Federal Reserve East Building [4]. The project has faced significant financial scrutiny, with costs climbing substantially over the last few years. The initial budget of $1.88 billion has swelled to approximately $2.46 billion as of mid-2025, representing a massive increase of 30.851% [4]. These escalating costs have been attributed to a variety of factors, including inflation, higher labor and material costs, and complex issues involving historic preservation and hazardous material removal, such as lead and asbestos [4].

Legislative Gridlock and Political Fallout

The ramifications of this legal battle have extended directly into the U.S. Senate, imperiling President Trump’s future plans for the central bank. Senator Thom Tillis (R-N.C.), a member of the Senate Banking Committee, has declared that he will not vote to advance any Federal Reserve nominees until the DOJ concludes its investigation [1]. This ultimatum poses a direct threat to the confirmation of Kevin Warsh, whom President Trump has selected to replace Powell when his term expires in May 2026 [1][5]. Tillis has expressed concern that the probe represents an attempt to undermine the Federal Reserve’s political autonomy, aligning himself with the concerns raised by the central bank’s leadership [1].

Sources

Federal Reserve investigation