Federal prosecutors’ criminal investigation into Federal Reserve Chair Jerome Powell is echoing the Department of Justice’s failed prosecution of former FBI Director James Comey, raising questions about whether the Powell inquiry will follow a similar trajectory and collapse under its own legal and political weight.
Powell disclosed Sunday that the DOJ has issued grand jury subpoenas tied to the Federal Reserve’s roughly $2.5 billion headquarters renovation and his testimony to Congress about the project, a revelation that immediately rattled markets and intensified concerns about political pressure on the central bank. Powell framed the investigation as retaliation for resisting President Donald Trump’s demands for faster and deeper interest rate cuts.
Legal experts say that framing may be strategic, but the underlying mechanics of the case look familiar.
“If this turns into a criminal case at all, it almost certainly has to be a false statement or perjury theory tied to congressional testimony,” said Neama Rahmani, a former federal prosecutor. “Overruns, waste, bad construction decisions — none of that is a federal crime.”
However, the Trump administration has not yet indicated that the investigation will be limited to Powell’s testimony before Congress. A spokesperson for Attorney General Pam Bondi said Monday that Bondi “has instructed her U.S. Attorneys to prioritize investigating any abuse of taxpayer dollars.”
A familiar playbook under the Trump administration
The DOJ’s previous case against Comey, which resulted in a grand jury indictment of the former FBI director in September, centered on whether Comey misled Congress about authorizing leaks to the media. It ultimately collapsed when a federal judge ruled that the prosecutor who brought the case had been unlawfully appointed, resulting in the indictment being tossed before a trial jury ever weighed the merits.
Powell’s investigation is not identical to Comey’s, but certain parallels are obvious, experts said. Like Comey, Powell is one of Trump’s perceived foes. Like Comey, the alleged criminal exposure appears to stem from testimony before Congress rather than underlying misconduct. And similar to Comey, Powell has chosen to address the allegations head-on in the form of a video statement, framing the investigation as abusive rather than routine.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Powell’s decision to respond to the subpoenas directly from a podium on Sunday underscored the stakes. No modern Fed chair has publicly acknowledged being under criminal investigation while still in office.
Powell has also quietly prepared to fight a potential indictment. He has hired legal counsel from Williams & Connolly, one of Washington’s premier litigation firms, signaling he expects to push back aggressively if prosecutors move toward an indictment or use the investigation to pressure him off the Fed board.
Why testimony cases often fail, and when they don’t
Bill Shipley, a former U.S. attorney, told the Washington Examiner that prosecutions based on congressional testimony are notoriously fragile because lawmakers often ask compound or imprecise questions, leaving room for evasive but not criminal answers.
“Congressional testimony is almost never the basis for criminal prosecution,” Shipley said. “Oftentimes the questions are compound, or they include a faulty factual premise, or the answer is evasive or nonresponsive but not false. And when you get an evasive or nonresponsive answer, that doesn’t mean the witness lied.”
Shipley contrasted Powell’s situation with the prosecution of former Trump adviser Roger Stone, which succeeded because it involved direct, binary denials that were less difficult to prove.
“In the Stone case, it was essentially a yes-or-no question, and the evidence showed the answer was false,” Shipley said. “That’s very different from ambiguous testimony before Congress.”
By contrast, Shipley said, both the Comey matter and Powell’s situation involve layered questioning, shifting factual premises, and testimony that could potentially be characterized as incomplete or evasive without necessarily being false.
The Scooter Libby risk for Powell: Initial investigations can evolve into something else
While the structure of the Powell investigation resembles the Comey case so far, Shipley warned that grand jury probes can veer in unexpected directions once subpoenas are issued.
He pointed to the 2007 case involving a former high-ranking official in the George W. Bush administration, Scooter Libby, as a cautionary example. The investigation began as an inquiry into the leak of CIA officer Valerie Plame’s identity, but ultimately resulted in Libby’s conviction for perjury and obstruction related to the investigation itself — not the underlying leak.
“Once a grand jury is convened, the investigation isn’t limited to what opened the door,” Shipley said. “It can go in directions nobody expects just because of the kinds of information they get turned up.”
That uncertainty looms large in Powell’s case because the contents and targets of the grand jury subpoenas remain unknown.
Powell inquiry could be more about ‘leverage’ than seeking a conviction
The Powell investigation is unfolding as the Supreme Court prepares to hear arguments later this month in a case challenging Trump’s attempt to remove Federal Reserve Governor Lisa Cook. That decision could shape the extent of independence Fed officials enjoy and how easily a president can remove them.
Powell’s own timeline adds to the leverage the administration may be seeking. His term as Fed chair expires this spring, but his term as a Fed governor runs until 2028, meaning he could remain on the board even after stepping down as chair unless the Supreme Court’s decision ultimately finds presidents may remove governors, or if he is pressured to resign.
GOP CHAIRMAN ISSUES DEFENSE OF POWELL IN BREAK WITH TRUMP
“This isn’t necessarily about winning a conviction,” Rahmani said. “It’s about leverage — forcing someone out, forcing them into resignation and early retirement.”
Whether prosecutors ultimately pursue an indictment remains an open question. But if the Powell investigation follows the same path as the Comey case, experts say, it may struggle to survive once stripped of politics and tested against the demanding standards of federal criminal law, unless federal investigators uncover more evidence implicating Powell than what was previously known.