The Department of Justice (DOJ) has ended its criminal investigation into Federal Reserve Chairman Jerome Powell, U.S. Attorney for the District of Columbia Jeanine Pirro announced on Friday. The probe, which focused on cost overruns in the renovation of the Federal Reserve’s Washington, D.C., headquarters, has been transferred to the Fed’s Inspector General (IG) for further review.
Immediate Action & Core Facts
Pirro stated in a post on X that the IG has been tasked with scrutinizing the building’s cost overruns, which she described as amounting to billions of dollars in taxpayer funds. She directed her office to close the criminal investigation while the IG conducts its inquiry. Pirro emphasized that she would not hesitate to reopen the criminal probe if the facts warrant it.
Deeper Dive & Context
Background of the Investigation
The investigation into Powell and the Fed’s renovation project had become a political hurdle for President Donald Trump’s nominee to succeed Powell, Kevin Warsh. Republican Senator Thom Tillis of North Carolina had previously stated he would not support Warsh’s confirmation until the probe was resolved. Tillis reiterated this stance during a recent Senate committee hearing.
Powell’s Response
Powell, whose term as chairman expires in May, had previously accused the Trump administration of using the investigation as a pretext to pressure the Fed into lowering interest rates. He denied any wrongdoing and offered no evidence to support his claim. President Trump has stated he was unaware of the investigation before Powell’s public remarks.
White House Reaction
White House Spokesman Kush Desai told the Daily Caller News Foundation that the IG’s review is the appropriate next step. He reiterated the administration’s confidence in Warsh’s confirmation, stating that it would restore competence to the Fed.
Future Implications
The closure of the investigation removes a significant obstacle for Warsh’s confirmation. If confirmed, he would succeed Powell, whose term as chairman ends in May. Powell has indicated he would remain in his governorship role until 2028 but has not clarified whether he would step down if the investigation were dropped.
Additional Context
The Fed’s Inspector General, Michael Horowitz, previously served in the same role at the Justice Department and reviewed the origins of the FBI’s investigation into the 2016 election and alleged ties between the Trump campaign and Russia. The Fed declined to comment on the investigation’s closure.