Justice Department Ends Criminal Probe of Fed Chair Powell

U.S. Attorney Jeanine Pirro announced Friday that her office is closing its criminal investigation of Federal Reserve Chair Jerome Powell, a move that removes a major obstacle to the confirmation of Kevin Warsh as his successor, CBS News, NBC News and the Associated Press reported.

Pirro wrote on X that the Fed’s inspector general was being asked to look into the renovation’s cost overruns, and that “accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.” She added that she “will not hesitate to restart a criminal investigation should the facts warrant doing so,” and said she expects a “comprehensive report” from the inspector general.

The Fed’s inspector general’s office said in a statement that its review was not new. It has been evaluating the $2.5 billion headquarters renovation, including “substantial cost increases and overruns,” since last July, and plans to release results to the public and Congress, NBC News and CBS News reported. NBC News said Powell himself asked for such a review last year and that an earlier inspector general review found no wrongdoing. The White House cast the move differently: press secretary Karoline Leavitt said the probe was “not necessarily dropped” but “just being moved over to the inspector general,” according to NBC News. White House spokesman Kush Desai said taxpayers “deserve answers about the Federal Reserve’s fiscal mismanagement,” CBS News reported.

The investigation had struggled to gain traction, the AP reported. A prosecutor conceded at a closed hearing in March that the government had not yet found evidence of a crime, and Judge James Boasberg then quashed subpoenas to the Fed, saying prosecutors produced “essentially zero evidence” and that their justification was “thin and unsubstantiated.” More recently, prosecutors made an unannounced visit to the renovation site and were turned away, the AP said.

The decision could lead to a quick Senate vote on Warsh. Sen. Thom Tillis, a North Carolina Republican on the Banking Committee, had said he would oppose Warsh until the investigation was resolved, calling it “bogus,” NBC News and the AP reported. Warsh testified Tuesday that the president never asked him to commit to any interest rate decision. Sen. Tim Scott of South Carolina, the committee’s chairman, welcomed the news, saying the cost questions “warrant scrutiny,” and invited the inspector general to brief the panel within 90 days, NBC News said. The White House said it is confident the Senate will confirm Warsh, CBS News reported.

Powell’s term as chair ends May 15, but he can remain on the board into early 2028, CBS News reported. The investigation became public in January when Powell disclosed in a video that the Fed had received grand jury subpoenas threatening an indictment related to his June 2025 testimony about the renovation, CBS News reported.