The Department of Justice announced Friday that it is closing its criminal investigation into Federal Reserve Chair Jerome Powell and his oversight of renovation projects at the central bank, marking a significant development in a politically sensitive probe that had drawn attention on Capitol Hill.
U.S. Attorney for the District of Columbia Jeanine Pirro said the matter will now be referred to the Federal Reserve’s inspector general for further review. The decision follows the DOJ’s move to wind down the investigation it opened in December, shifting responsibility for continued examination of the renovation issues to the independent watchdog.
According to the announcement, the inspector general will have primary authority to assess the Federal Reserve’s handling of the project and determine whether any concerns merit further action. While the criminal investigation is being closed, the Justice Department indicated it could be reopened if future findings warrant additional scrutiny.
The timing of the decision could carry implications for the Senate confirmation process of Kevin Warsh, a former Federal Reserve board member nominated by President Donald Trump to succeed Powell as chair. The investigation had become a point of contention among lawmakers, including Sen. Thom Tillis, a member of the Senate Banking Committee, who had signaled he would not support any nominee until the matter was resolved. With the DOJ stepping back, Warsh’s path forward in the committee could become clearer.
Following the announcement, White House officials expressed confidence that Warsh will move through the confirmation process quickly, arguing that the inspector general review is the appropriate venue for examining the Fed’s internal spending oversight while restoring confidence in central bank leadership.
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