Democratic erosion doesn’t happen suddenly, or even in the form of coups anymore; instead, it occurs through the gradual, internal erosion of institutions. Ozan Varol coined the term “stealth authoritarianism,” in which incumbents use existing legal mechanisms to achieve anti-democratic ends while using the “mask of law” to disguise their actions. A recent target of these tactics is Jerome H. Powell, Chair of the US Federal Reserve (Fed). The Trump administration has increased pressure on Powell, employing intimidation through a criminal probe conducted by the Department of Justice (DOJ). Through the use of a criminal investigation, the Trump administration is exemplifying Varol’s stealth authoritarianism by relying on the rule of law to weaken the independence of institutions without technically violating the law. A criminal investigation into the Fed’s building renovations is a calculated “mask of law” that is intended to create a legal “cause” to evade statutory protections.

According to Varol, stealth authoritarianism involves leaders weaponizing legal avenues to consolidate and remove checks on their power. Unlike typical autocrats who forgo constitutions, in stealth authoritarianism, leaders conceal their overreaches of power under a “veneer of legitimacy,” or the mask of law. The mask of law allows leaders to evade criticism by maintaining an appearance consistent with democratic norms. Varol identifies six legal mechanisms that stealth authoritarians commonly abuse or engage in under the mask of law: (1) Judicial Review, (2) Libel lawsuits, (3) Electoral Laws, (4)  Non-political Crimes, (5) Surveillance Laws and Institutions, and (6) Bolstering Domestic and Global Legitimacy. Of these, I will hone in on the Trump administration’s use of non-political crimes, which Varol describes as the use of seemingly neutral laws, such as fraud, tax evasion, and money laundering, to target political dissidents or opposition voices. In order to maintain the appearance of democracy, any charges or prosecutions must be founded on a factual basis. Following judicial procedures and bringing forth non-political charges allows incumbents and regimes to frame the prosecution as a legitimate use of the rule of law. 

In a statement to the US on January 11th, 2026, Jerome H. Powell revealed that the DOJ had initiated a criminal probe into the Fed, threatening Powell with a criminal indictment regarding his testimony to the Senate on a $2.5 billion headquarters renovation project, the cost of which increased by $600 million from its original estimate of $1.9 billion. He dismisses the basis of the probe, claiming that it is a result of the Fed refusing to follow the “preferences of the President,” and setting interest rates based on their own assessments. This comes after President Trump’s long dissatisfaction with the Fed’s refusal to cut interest rates. The Fed was designed to be an institution independent of political control and influence, ensuring that monetary policies are based on economic assessments, rather than elections. Yet, tension between the autonomy of institutions and the authority of the executive came to a breaking point when President Trump nominated Kevin Warsh to replace Powell. Further heightening tension, Trump is threatening to fire Powell if he refuses to leave the Fed at the end of his term as Chair, since he would still serve as a Fed governor after his term. 

Varol identifies the persecution of dissidents for non-political crimes as a common stealthy authoritarian tactic. Here, the DOJ’s probe functions as a mask for what is actually a policy dispute between Powell and President Trump over interest rates. Trump uses the formal rules of his power to avoid his actions being perceived as a coup of the Fed. The Federal Reserve Act contains a “for cause” provision, which requires evidence of misconduct to warrant removal, preventing Presidents from stacking the deck in their favor. If successful, the DOJ’s investigation into Powell would create the legal pretext necessary to meet the “for cause” statutory requirement. This would allow Trump to fire Powell from the Fed entirely, removing a dissident of his preferred policies. This isn’t the first time President Trump has used the “for cause” provision to target a Fed official; in September of 2025, the DOJ initiated a probe into Fed governor Lisa Cook, on claims that she committed mortgage fraud in 2021. These instances suggest a pattern of the administration’s use of the rule of law to weaken dissent in the Fed’s board of governors. This then becomes a method of intimidation; the threat of prosecution creates a chilling effect that discourages the Fed from acting independently. This threatens to transform the Fed from an independent institution into a partisan tool of the executive. 

President Trump’s pressure on Fed Chair Jerome H. Powell demonstrates how democratic erosion can occur through manipulation, rather than obvious violations of the law. Varol’s work emphasizes the importance of cloaking in stealth authoritarianism; stealth authoritarianism is effective and often undetectable because it hides it anti-democratic intentions behind the rule of law. The use of a criminal probe to subsequently satisfy the “for cause” provision of the Federal Reserve Act has transformed policy disagreement into a legal basis for removal. This blurs the lines between coercive control and governing, making the weakening of institutions harder to discern. This signals a phase of democratic backsliding; institutions, like the central bank, are being politicized, setting a precedent for future leaders to expand executive control over other independent institutions.