By Adam Cancryn, Kristen Holmes, CNN
(CNN) — White House officials are heaping blame on DC US Attorney Jeanine Pirro over her office’s criminal investigation into Fed Chair Jerome Powell, faulting her for blindsiding them with an inquiry that has forced the administration into a dayslong damage control campaign, four people familiar with the matter told CNN.
The emergence of the criminal probe earlier this week surprised and dismayed senior officials across the government. Inside the White House, officials scrambled to calm markets and reassure lawmakers and to put distance between President Donald Trump and the investigation, even though Trump himself had been one of Powell’s most strident critics.
Trump is hardly shy about trying to engineer criminal investigations of his political foes. But even against that backdrop, the investigation into Powell threw into disarray the White House’s plan to wait out the final months of his term in relative peace. It also raised concerns that Trump may now face obstacles in confirming a new, more malleable Fed chair that he sees as crucial to juicing his economic agenda.
Powell himself issued a remarkable statement confirming his office had received grand jury subpoenas and casting the probe as an attempt by Trump to pressure him to lower interest rates. Even Trump’s Treasury Secretary Scott Bessent told people he was frustrated by the move. Multiple Republican senators have also criticized the investigation, and one of them, Sen. Thom Tillis of North Carolina, vowed to withhold his vote on any nominee to replace Powell for as long as the inquiry remains open.
“Until this matter is resolved, I’m not considering anybody,” Tillis, who sits on the Senate Banking Committee that oversees the Federal Reserve, said Tuesday. “I wouldn’t consider my mother for the post under the current conditions.”
In an interview with NBC News on Sunday, Trump denied knowledge of the investigation, saying, “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.”
Asked repeatedly about the probe on Tuesday, Trump largely repeated his attacks on the Fed Chair and broadly defended his attempts to push for lower interest rates. Notably, Office of Management and Budget Director Russ Vought had invoked Trump’s name in a July letter that raised questions about Powell’s congressional testimony on a renovation project of the Fed headquarters – testimony that is now part of the federal investigation.
Trump himself showed no overt signs of anger at Pirro in the days since the probe was reported publicly. But at a White House event last week, Trump delivered a mostly critical lecture to a group of US Attorneys, suggesting at least some in the group were weak and ineffective, and asserting their actions made it harder for Attorney General Pam Bondi and Deputy Attorney General Todd Blanche to do their jobs, a person familiar with the matter said. Trump also singled out a few for praise. The episode occurred before the subpoenas to Powell were made public.
Trump’s criticism that the Department of Justice isn’t prosecuting his political foes quick enough has ramped up in recent weeks, with Trump complaining that both the US attorneys in specific jurisdictions and Bondi aren’t following through on some of the outstanding investigations into perceived political enemies, including California Senator Adam Schiff, sources familiar with the matter told CNN. Trump was also frustrated that prosecutors couldn’t re-charge former FBI Director James Comey, after a judge threw out the original case, another source said. Lawyers in many US attorneys offices across the country, particularly in jurisdictions where political cases are pending, have been walking on egg shells for months as Trump-installed loyalist