Justice Department drops criminal investigation into Fed Chair Jerome Powell

The U.S. Department of Justice dropped its investigation into outgoing Federal Reserve Chair Jerome Powell on Friday. Earlier this year, the DOJ launched a criminal investigation into Powell after he was accused of mishandling multibillion-dollar renovations, as per a report in The Guardian. Powell’s term will come to an end on May 15, and will likely be replaced by Kevin Warsh. Over the course of his term, despite being nominated by President Donald Trump, the two clashed several times.

According to U.S.  Attorney Jeanine Pirro, the Inspector General (IG) of the Fed was asked to “scrutinize the building costs overruns” that were allegedly borne by taxpayers. Pirro hoped to get a comprehensive report about the IG’s findings shortly, which would “assist in resolving, once and for all, the questions that led this office to issue subpoenas.” In the meantime, she closed the investigation into Powell but was not against restarting it.

“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.  Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” Pirro wrote in a post on X. Republican Senator Thom Tillis put a hold on the Senate’s voting on Washr’s nomination unless the investigation came to an end. Tillis was not a supporter of the investigation, as earlier, he called it a “bogus investigation into Chairman Powell that threatens the independence of the Fed.” He did, however, support President Trump’s nomination of Warsh for the role.

Sen. Elizabeth Warren slammed the process, calling it “Donald Trump’s corrupt scheme to take over the Fed.” According to a CNBC report, the investigation being dropped clears the way for Warsh to take over as the head of the Fed after May 15. “Let’s be clear what the Justice Department announced today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor Lisa Cook,” Warren said in a statement.

White House Senior Deputy Press Secretary and Special Assistant to the President, Kush Desai, claimed that the Inspector General was in the best position to get to the bottom of the matter. He also said that the White House was now confident that the Senate would “swiftly” confirm Warsh as the next Federal Reserve Chair to "finally restore competence and confidence in Fed decision-making.”

Illinois Rep. Bill Foster called the investigation a sham and raised questions about the independence of the Federal Reserve. “The DOJ ending this sham 'investigation' because it delayed Kevin Warsh's confirmation proves it was never serious in the first place. It was just another attack on the Fed's independence because Jerome Powell refused to cater to Trump's political whims,” he wrote in a post on X. Questions have been raised about the independence of the Fed under Wasrsh, but the President’s nominee has said that he was not going to be the President’s “human sock puppet."