00:00Senator Tillis. Mr. Chair, before my time starts, can I make a parliamentary inquiry?
00:04Certainly. I want to make sure that we get this right, because I'm not an attorney,
00:09but I think it's pretty important to suggest that according to Mr. Warsh, he has signed an
00:16agreement that is in compliance, provided that he executes the agreement. So we should not
00:21have into the record that he is before us out of compliance, because you stipulated that what
00:27Senator Warren said was a first of a kind here, but he is not out of compliance. He has agreement
00:34that if he executes, we'll be in compliance. That's why he's properly before us. And I just
00:38want to make sure for the record that that is clear. Yeah, very clear. Let me just say it. I'm
00:43going to reiterate what you just said, but I was writing it down myself. The Office of Government
00:48Ethics has entered into an agreement with Kevin Warsh that he has up until 90 days after confirmed
00:56to divest of his assets. So the war, I mean, to non-attorneys here, I heard someone say he's
01:04before us out of compliance, and that's why I checked with the staff to be absolutely certain
01:09he is properly before us. He will be in compliance if he executes agreement that addresses the concerns
01:15that have been presented by some of my colleagues on the other side of the aisle. I just want to
01:19confirm
01:19for the record that that is, in fact, accurate. So if we're doing a matter here of, is this
01:25parliamentary inquiry? Is that what this is? I've made a parliamentary inquiry, so I'm not
01:30burning my time on something. I understand. I felt like a cheap shot to say he's out of compliance
01:34when, in fact, he's not. Then I'd like to ask the other question, and that is, have we seen this
01:40agreement? Do we have any way to verify that, in fact, these sales will occur if we have no idea
01:48what's in them and no one has told? And let's do remember the law for a minute. The Fed, unlike
01:57other
01:57parts of government, do not have a 90-day you can be out of compliance. Fed law is explicit
02:06that you cannot own any portion of a financial interest in a bank.
02:12Mr. President, Mr. Chairman, excuse me if you're interrupting, Senator.
02:17Now I'm going to let the attorneys take over.
02:18Are we going to all get extra time here?
02:20No.
02:21I'd like an extra three minutes.
02:24All right.
02:25Okay.
02:26Mr. Chair, I just, for the record, and the only reason I say that-
02:29That was a parliamentary inquiry, so it doesn't count.
02:31Yeah.
02:32Okay.
02:33Mr. Chairman, the reason I mentioned that is because you had stipulated it. I don't think
02:38you meant it this way, but you as a chair said that this is the first of a kind of
02:42someone
02:43being out of compliance. I don't think you meant that. I wanted to make sure it was clear
02:47for the record.
02:47Well, let me just be very clear again. The career ethics professionals were the ones that
02:53sent Mr. Warsh's signed paperwork to this committee's chief clerk. They would not have done so if they
02:59did not come to an ethics agreement with Mr. Warsh. Mr. Kennedy, Senator Kennedy does raise
03:06a good point. We are going to stick to our timeline, and I appreciate you raising the point
03:12of how long an inquiry can go on, and that does not buy you more time unless, of course,
03:19we all decide we want more time. And then I would rule on that, and I would rule against
03:24it.
03:27Thank you, Mr. Chair. Mr. Warsh, congratulations. You can't count this as a date with Jane,
03:33particularly this one. I think probably the first hearing was a little less acrimonious.
03:39I'm not going to ask you anything. You can take a break and get ready for the bludgeoning
03:42on the other side. They're going to beat you until you bleed, and then they're going to
03:45beat you for bleeding. I'm going to talk about what's preventing me from being in a position
03:50to vote for you until... We've spent time together in my office. You have extraordinary credentials.
03:58They're impeccable. I think the way you're dealing with the ethics issue is strong.
04:02The problem I have is where we are right now, and I start by saying I love your opening statement.
04:09I love your focus on the independence of the Fed. I love the idea of Fed independence with
04:17respect to achieving the dual mandate, but Fed transparency on so many other things that
04:22the Fed does that, frankly, we're all frustrated with, bank examination, supervision being some
04:27among them that I think we should have more insight into. Mr. Chair, I'd like to submit for
04:33the record two executive orders under President Trump, one in 2020 and one in 2025, talking about
04:40making federal architecture beautiful again and focusing on trying to preserve the integrity
04:46of old buildings.
04:48Without objection.
04:50Thank you. And, Mr. Chair, I will be submitting an analysis, but if we can go to slide two
04:56and turn it up right, much has been made about the building project that has Senator or that
05:05has Chair Powell under investigation. I'm not going to get into the details except to say
05:11that I used to work for a firm that did audit and compliance, so I'm naturally wired to go
05:16back from the ground up and figure out what the deal is. Here's what I know. The Martin building
05:22has been conflated into this project to make it a $4 billion building. Even if you put the
05:27Martin building in, it's a $3 billion building. The reality is, what we're talking about is
05:33the Eccles Building and the East Building, for which, bring that up higher, Jack, you're
05:37a tall guy so people can see it. These are the overruns. And these overruns occurred in part
05:43because the cost of inputs went up 69% since the original estimate. Asbestos was identified,
05:49remediation was required. Pylons had to be built underneath the building because it turns
05:55out they used it as a landfill and they had a water table issue. There were a variety of
06:01reasons why this building went over budget. As a matter of fact, if we put everybody in
06:07prison in federal government that had had a budget go over, we'd have to reserve an area
06:12roughly the size of Texas for a penal colony because of the way government projects work. And the
06:18reality is, the overage of inflation adjusted was about $730 million, the majority of which
06:24seems to be legitimate. Next slide. Not acceptable, unfortunate, but legitimate.
06:33Now, what I've really got a problem with, and we're talking about Fed independence, by the
06:38way, I think you're going to be independent. You have to be. You've got to convince 11 other
06:41people to vote with you, at least the majority. It's a consensus organization. You try to get
06:45the majority to. Most of these votes are 11 to 1. So if anybody thinks the president can appoint
06:50somebody and you unilaterally can control things, you're going to be an unsuccessful chair if history
06:55is any guide, and you've served under some of the best. So I know you're going to do it right.
07:01The problem that I have here is that we had some U.S. attorney with a dream or assistant U
07:08.S. attorney
07:08thinking it would be cute to bring Chair Powell under an investigation just a few months before the
07:15position was going to be open. This happened this year. Normal course and speed. Here's how it works
07:22at the Fed. February or March, May the 15th, the term would have expired. We'd be having this hearing.
07:29You'd be getting confirmed. Custom also suggests that the sitting chair, even though he has two years
07:34left on his term, would have exited. But instead, we have somebody who thinks a building project that went
07:41over by about $700 million with a lot of what seemed to be justifications for it are holding
07:48up this whole process. It sounds like to me, somebody over in the DOJ didn't even check with the boss.
07:55The boss said on the same night that I said, I can't go forward until this bogus investigation is
08:00done with said he didn't know anything about it. So we've got people in DOJ over in the D.C.
08:06circuit
08:06or the D.C. district doing these investigations. We have got to end this investigation. Big DOJ didn't
08:13know about it. The president didn't know about it. Let's get rid of this investigation so I can support
08:18your confirmation. Mr. Warsh, the only thing I've found the least bit odd about you is you've never
08:24watched an episode of Seinfeld. You've spent so much time at being a rock solid economist that you're
08:31not even taking time away for a little laugh like that. I look forward to supporting your nomination
08:36and I look forward to this investigation being taken down. If the chair wants to have all of our
08:42subcommittees start looking at capital expenditure projects for the agencies that we're overseeing,
08:48I think that's a great idea. And I'd like to be on a committee specifically drilling down on this
08:53analysis. If somebody could prove me wrong, I'd be happy to make a criminal referral. But I don't
08:58have the D.C. circuit tell me a crime was committed when seven members on this committee said it wasn't,
09:04including the chair. Thank you, Mr. Chair. You're welcome.
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