WASHINGTON — Late last year, as President Donald Trumpwas publicly intensifying his attacksagainst 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.
The U.S. Attorney's Office for the District of Columbia office didn't contact main Justice Department officials, nor the White House nor Treasury Department before issuing subpoenas involving the renovation ofFederal 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.
The investigation into the Fed, confirmed Sunday evening by Powell, is the latest instance where Trump's Justice Department has been accused of using the criminal justice system to punish or intimidate the president's perceived enemies.
In a phone call with NBC News, Trump said he knew nothing about the investigation, before attacking Powell again.
"What should pressure him is the fact that rates are far too high," Trump said. "That's the only pressure he's got."
But in late December, the president telegraphed upcoming legal action against the chairman of the federal reserve.
"We're thinking about bringing a suit against Powell for incompetence," he said, arguing the Federal Reserve building renovations were costing too much. Coincidentally, Trump has torn down theEast Wing of the White House and is building a ballroomin its place that would cost an estimated $400 million.
U.S. Attorney Jeanine Pirro's office is heading the investigation into the Fed, and FBI agents at the Washington field office are working on the probe, the people said.
Pirro, a former Fox News host and Trump ally, has received some praise from career Justice Department officialsbecause of her handling of high-profile incidentslike the killing of two Israeli Embassy employees. But her office has also notched some losses. In November, ajury acquitteda man known as "sandwich guy," who tossed a Subway hoagie at a Border Patrol agent who was patrolling on the streets of Washington at President Donald Trump's order.
Pirro's office said it could not comment on an ongoing investigation.
Powellsaid in a statementthat the threatened indictment is very much political.
"No one—certainly not the chair of the Federal Reserve—is above the law," Powell said. "But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."
He said the Justice Department's subpoenas were just the latest way for the administration to exert control over the Fed and its decisions about interest rates.
"The 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," Powell said, indicating he would not step down despite the investigation.
Since before the start of his second term, Trump has demanded lower interest rates and has routinely attacked Powell and the central bank's other top officials, ramping up its criticism as an affordability crisis hit consumers and critical midterm elections are looming.
The Fedcut interest rates three timeslast year.
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.
"If 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," Tillis said in a statement. "It is now the independence and credibility of the Department of Justice that are in question."
Alexis Loeb, a former Justice Department deputy chief, said that while it doesn't take much evidence to open a grand jury probe, the system "relies on prosecutors' and agents' exercise of discretion" to wield that power fairly.
"There 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," Loeb said.
Federal Housing Finance Authority director Bill Pulte, a critic of the Federal Reserve who sparked a federal investigation into allegations of mortgage fraudby Fed governor Lisa Cook --chargesshe denies --said Monday he didn't know anything about the investigation.
"The DOJ is outside of my purview, this is out of my purview. I don't know anything about it and I would defer you to the DOJ," Pulte said during an interview with Bloomberg Television.
Federal prosecutors — and public officials — tend to keep publicly mum about ongoing investigations, in part so they don't taint the investigation with political opinions. Not always the case with Trump.
In late September, the president 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 Leticia James. Comey and Schiffwere indicted shortly after.James was indicted in October.
"What about Comey, Adam 'Shifty' Schiff, Leticia???" Trump wrote on Truth Social. "They're all guilty as hell, but nothing is going to be done," and said "we can't delay any longer, it's killing our reputation and credibility."
Trump addressed the post to "Pam," writing: ""They impeached me twice, and indicted me (5 times!), OVER NOTHING. JUSTICE MUST BE SERVED, NOW!!!"
The presidentmeant 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 "Oh," and then tried to shrug it off.
No action has been taken so far in Schiff's case. Comey's and James'cases were dismissedby U.S. District Judge Cameron McGowan Currie in late November, after he found the Justice Department had violated the Constitution by appointing the U.S. attorney who brought the charges.
Officials hinted Mondaythey were looking at Comey's case again. Afederal grand juryrefused to indict James in December, the third such attempt to prosecute her.
Public pronouncements by Trump and his allies have threatened to jeopardize some of the federal cases against his enemies. Before Comey's case was dismissed, hisattorneys had arguedthe case against him was a vindictive and selective prosecution, a legal reason to have the charges thrown out.
One former federal prosecutor called Comey's argument the "rarest of all beasts" because it appeared to be strong enough to overcome the high legal burden.
"If there is ever going to be a vindictive prosecution motion that is successful, it will be this motion," Patrick J. Cotter, a former federal prosecutor who is now a partner at UB Greensfelder,told NBC News.
