By Howard Schneider and Michael S. Derby
WASHINGTON, April 14 (Reuters) – Former Federal Reserve Governor Kevin Warsh, nominated by President Donald Trump to head the U.S. central bank, reported assets worth well over $100 million in new financial disclosures, putting him on track to be the wealthiest Fed leader if confirmed.
It is difficult to estimate net worth from U.S. government ethics forms because assets are valued in broad and sometimes open-ended categories. Warsh’s filing, made public early on Tuesday, also includes a notable number of gaps and pledges to divest assets to conform with central bank ethics rules if confirmed.
The filing, however, gives an extensive accounting of Warsh’s personal wealth. The 69-page disclosure includes two investments worth more than $50 million each in the Juggernaut Fund LP and $10.2 million in consulting fees from the investment office of Wall Street giant Stanley Druckenmiller.
The Juggernaut Fund investments come with the caveat that the underlying assets “are not disclosed due to pre-existing confidentiality agreements,” with a promise from Warsh that “I will divest this asset if confirmed.”
Warsh’s financial disclosures will almost certainly be a focus of his confirmation hearing, which is formally scheduled for April 21. Current Fed Chair Jerome Powell’s leadership term formally ends on May 15.
Fed ethics rules formalized in 2022 sharply limit what investments officials and their immediate families can hold and how they can manage them. Those rules prevent ownership of bank stocks and crypto-related assets among other restrictions, and limit how Fed officials can buy and sell holdings, for example.
The central bank’s ethics rules, which are set by the policy-setting Federal Open Market Committee, are more stringent than those of the rest of the government.
Warsh’s large-scale investments are among a series of holdings, including around two dozen in THSDFS LLC, some individually worth as much as $5 million, where details were withheld and which he also pledged to divest if confirmed.
Heather Jones, the Office of Government Ethics senior counsel who signed off on Warsh’s document, noted those commitments in her review and said “once the filer divests these assets, he will be in compliance” with the Ethics in Government Act.
The document lists dozens of other assets without stating their value, mostly focused, judging by the names, in sectors including artificial intelligence and crypto. Those holdings include Cafe X, described as a robotic coffee bar platform; a “bionic movement-enhancing wearable clothing” firm called Cionic; Blast, notated as “yield-generating Ethereum layer two,”; and Contraline, a “reversible male contraceptive solution.”
The holdings of Warsh’s spouse, Jane Lauder, whose family interests include the Estee Lauder cosmetics company and who Forbes estimates has a net worth of around $1.9 billion, were also included. Some of Lauder’s municipal bond holdings were valued simply at “over $1 million.”
Warsh’s liabilities appear comparatively limited, including a 2015 mortgage of up to $5 million from JP Morgan Chase at a rate of 2.75%, a revolving line of credit of up to $5 million from PNC Bank listed at a rate of around 6%, and capital commitments of $1,950,000 to THSDFS LLC, one of the interests he has promised to divest.
‘WEALTHY AND WELL CONNECTED’
The filing of Warsh’s paperwork with the ethics office is a key step in his expected confirmation to succeed Powell.
The potential Fed leader’s wealth, which appears to significantly exceed that of Powell, points to a potentially challenging vetting process for legislators. Warsh’s financial position also stands in sharp relief to that of most Americans and more closely aligns with the substantial wealth held by top Trump officials like Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
“Warsh is wealthy and well connected” and “the disclosure is a snapshot into how wealth and connections build greater wealth and connections,” said Kathryn Judge, a professor at Columbia Law School.
She added that “perhaps most striking were the many arrangements that were not fully disclosed because of pre-existing confidentiality agreements,” noting that “when those disclosures leave questions unanswered, the Senate can and should use the hearings to get the information it needs to make that determination.”
Mark Spindel, chief investment officer at Potomac River Capital, said Warsh “has distinguished himself in financial services” and the disclosures offer “a comprehensive look at someone who’s been … highly successful in merchandising his intellectual properties.” He added that Warsh “clearly leaned into crypto a bit”, which is emblematic of shifts in the financial system under the Trump administration.
It is unclear how quickly Warsh could be confirmed by the full Senate, as some lawmakers have already put the brakes on the process.
Republican Senator Thom Tillis, a member of the Senate Banking Committee, has vowed to block a confirmation until the conclusion of a Department of Justice investigation into Powell for the Fed chief’s oversight of renovations to the central bank’s headquarters in Washington, D.C. There is little indication of progress on that matter.
Though a federal judge quashed the DOJ’s subpoenas, finding the probe to be a thinly disguised effort to pressure Powell to lower interest rates or resign, the department has said it will appeal, likely delaying any chance Warsh has to be confirmed before the end of Powell’s term as Fed chief.
Senator Elizabeth Warren, who is the ranking Democrat on the Senate Banking Committee, said in a statement on Tuesday that “there should be no hearing or vote in the Senate on Kevin Warsh’s nomination while the President continues his attempt to take over the Fed,” adding that “it would be a mistake for the Senate to confirm a Trump sock puppet to run America’s central bank.”
Powell has said he will continue to serve on a “pro tem” basis if Warsh is not confirmed and in place by the end of his term. Powell also can, if he chooses, continue to serve as a Fed governor until 2028.
(Reporting by Howard Schneider and Michael S. Derby; Editing by Kirsten Donovan, Hugh Lawson and Paul Simao)
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