Justice Department drops criminal investigation into Fed Chair Jerome Powell and refers renovation review to Fed inspector general
The Facts
- The Justice Department has dropped its criminal investigation into the Federal Reserve and Chair Jerome Powell.
- The investigation concerned alleged cost overruns related to renovations at the Federal Reserve’s Washington headquarters.
- Jeanine Pirro said the Federal Reserve’s inspector general has been asked to review the renovation cost overruns as the Justice Department closes its inquiry.
- Pirro said she could restart a criminal investigation if later findings justify it.
- Ending the Powell investigation removes a major obstacle to Kevin Warsh’s Senate confirmation as President Trump’s nominee to lead the Federal Reserve.
- Sen. Thom Tillis had said he would block or withhold support for Warsh’s confirmation while the criminal investigation into Powell remained open.
- The inspector general had already reviewed the renovation project previously, and at least one report says those reviews found no wrongdoing.
Context
What was Powell being investigated over?
The criminal inquiry focused on alleged cost overruns in renovations at the Federal Reserve’s Washington headquarters, and some reporting said prosecutors were examining possible fraud-related issues tied to the project and Powell’s congressional testimony about it Aol,NY Post,Yahoo News.
Why does dropping the investigation matter for Kevin Warsh?
It matters because Republican Sen. Thom Tillis had said he would not allow Warsh’s confirmation to move forward while the administration was still pursuing Powell, making the investigation a practical obstacle to Trump’s effort to install a new Fed chair NYT,Corriere della Sera,CNBC.
Is the matter fully over?
Not entirely. The Justice Department’s criminal probe has been closed, but the Fed’s inspector general is continuing to examine the renovation costs, and Pirro said she could reopen a criminal case if the facts later warrant it tagesschau.de,Business Insider,CNBC.
How left and right read it
What stands out is the risk of political pressure spilling into institutions that are supposed to operate on public trust and professional independence. The Justice Department dropped the criminal case, the inspector general is reviewing the renovation cost overruns, and prior inspector general reviews reportedly found no wrongdoing, which makes the episode read less like accountability than a destabilizing cloud over the Federal Reserve.
The key issue is procedural clarity: if the Justice Department is closing its criminal inquiry, the matter should move through the proper oversight channel rather than linger as an open-ended political obstacle. With the inspector general review continuing and Pirro saying a criminal case could be restarted if justified, ending the current investigation clears the way for the Senate to evaluate Kevin Warsh's nomination on a more defined record.
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