Justice Department Drops Investigation into Federal Reserve and Jerome Powell
By Steve Kopack
The decision could clear the way for Trump’s nominee to chair the Fed, Kevin Warsh, to advance toward a confirmation vote in the Senate.
The Justice Department on Friday dropped a criminal investigation into the Federal Reserve and its chair, Jerome Powell, regarding a renovation project at the central bank’s Washington headquarters.
“This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers,” U.S. Attorney for D.C. Jeanine Pirro said in a post on X.
“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.”
Pirro added that she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
The inspector general for the Federal Reserve has already reviewed the renovation project, and found no wrongdoing. It was asked again to review the project in 2025 by Powell, amid unrelenting pressure from President Donald Trump and his top allies.
The Inspector General’s office said that the review mentioned by Pirro on Friday was not new and that it was continuing to compile the review requested by Powell last year.
“In July of last year, the OIG announced that it was conducting an evaluation of the Board’s building renovation project,” a spokesperson said. “This assessment includes our independent analysis of the project’s substantial cost increases and overruns.”
“We are actively working to complete our review, and look forward to making the results available to the public and Congress upon completion,” the spokesperson added.
Hours later though, White House Press Secretary Karoline Leavitt cast doubt on status of the investigation.
Leavitt described the probe as “not necessarily dropped” but “just being moved over to the inspector general.”
“So the investigation still continues,” she said. “It’s just under a different authority, and that’s what you’ll continue to see.”
The decision could clear the way for Trump’s nominee to chair the Fed, Kevin Warsh, to advance toward a confirmation vote in the Senate.
Warsh’s confirmation has been blocked by Sen. Thom Tillis due to what the Republican from North Carolina called a “bogus” investigation of Powell.
Tillis and numerous other lawmakers have said it did not appear Powell committed any crime.
South Carolina Republican Sen. Tim Scott, who chairs the panel charged with advancing Warsh’s nomination, quickly welcomed the news Friday.
“These serious concerns warrant scrutiny, and I’m pleased this matter is continuing to receive it,” Scott said in a statement. “I welcome the Inspector General’s review and expect a full accounting of how these costs spiraled out of control.”
Scott also extended an invitation for the inspector general to brief the committee “within the next 90 days.”
The Federal Reserve declined to comment on Pirro’s announcement.
“American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter,” White House spokesman Kush Desai said in a statement.
