The Justice Department on Friday announced it would end a probe into the Federal Reserve and chair Jerome Powell over a renovation project at the central bank’s headquarters, likely clearing the way for Kevin Warsh, President Donald Trump’s pick to replace Powell, to advance in the Senate.
The move clears the way for Kevin Warsh, Trump’s pick to replace Powell, to advance toward a Senate approval.
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Jeanine Pirro, U.S. attorney for the District of Columbia, said on X that she directed her office to close an investigation into Powell and the Federal Reserve as the central bank’s internal watchdog was tasked with scrutinizing the headquarters’ building costs.
Pirro said she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
The investigation focused on renewal projects for two Federal Reserve buildings, which the central bank said had not been renovated since their construction in the 1930s, after costs exceeded earlier estimates of $1.9 billion to about $2.5 billion.
An earlier audit of the Federal Reserve’s renovation project in 2021 found no evidence of wrongdoing by the central bank, and Powell requested the Inspector General of the Federal Reserve to conduct a second review last year amid broader pressure from the Trump administration.
A Senate vote on Warsh’s nomination. Voting has been stalled by the DOJ’s probe, after Sen. Thom Tillis, R-N.C., condemned the investigation as “bogus” and said he would not support Warsh’s confirmation until it was dropped. A vote has not yet been scheduled.
The Justice Department launched its investigation into Powell and the Federal Reserve in January, accusing both of fiscal mismanagement over the central bank’s renovation project. The move was the latest in Trump’s campaign against Powell, as Trump has threatened to fire Powell over the allegations multiple times. In a combative meeting with Trump at the renovation site last year, during which Trump confronted Powell about the project’s costs rising to “about $3.1 billion,” Powell accused Trump of overinflating the estimated costs. Last week, Trump said he would “have to fire” Powell if Powell did not leave his post during the investigation, and Trump argued he had been “held back” by doing so. Powell, who said he respected the rule of law while denying the claims, called the investigation “unprecedented” and accused the Trump administration of pressuring the Federal Reserve to lower interest rates.
If approved, Warsh will likely become the richest Federal Reserve chair ever. Warsh disclosed investments and holdings worth roughly $131 million to $209 million earlier this month, far exceeding assets reported by Powell, who disclosed wealth up to $75 million last year and was believed to be the richest person in the role since at least 1948.
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