Photo: KENT NISHIMURA / AFP / Getty Images
The Justice Department has ended its criminal investigation into Federal Reserve Chair Jerome Powell, clearing a major hurdle for President Donald Trump’s nominee, Kevin Warsh, to advance in the confirmation process for the top central bank role.
U.S. Attorney for Washington, District of Columbia, Jeanine Pirro announced Friday (April 24) that her office is closing the probe, which centered on cost overruns in the Federal Reserve’s $2.5 billion renovation project at its Washington headquarters. Pirro explained that the Federal Reserve’s Inspector General will now examine the matter, stating on X, "I have directed my office to close our investigation as the IG undertakes this inquiry." She added that she would "not hesitate to restart a criminal investigation should the facts warrant doing so."
The investigation began in January after President Trump and his allies criticized Powell for not lowering interest rates faster and questioned the management of the building project, whose costs increased from an initial $1.9 billion estimate to about $2.5 billion. The central bank attributed the overruns to unforeseen issues such as more asbestos than expected, a sinkhole, and rising labor and material costs.
The end of the investigation removes an obstacle for Warsh, President Trump's pick to succeed Powell. Senate Banking Committee member Thom Tillis had blocked Warsh’s confirmation while the criminal probe was ongoing, calling it "bogus" and saying there was no evidence of crime. With the probe now closed, Tillis said he would support moving Warsh’s nomination forward.
The Federal Reserve, which approved the renovation project in 2017 before Powell became chair, declined to comment on the Justice Department’s decision. The Inspector General has previously reviewed the project twice and found no wrongdoing, but will conduct another review at the request of Powell and amid ongoing scrutiny from lawmakers.
Powell had indicated he would continue serving as chair pro-tem until the investigation was resolved. Now, with the probe closed, Warsh’s confirmation is likely to come up for a Senate vote soon.