Justice Department closes investigation into Fed Chair Powell, removing obstacle to Kevin Warsh confirmation

U.S. Attorney Jeanine Pirro announced Friday on social media that her office was ending its investigation into the Federal Reserve's building renovation costs, directing the inquiry to the Fed's inspector general. "I expect a comprehensive report in short order," Pirro said, according to the Washington Examiner, adding that she would "not hesitate to restart a criminal investigation should the facts warrant doing so."

The investigation had centered on renovations to the Fed's Eccles Building and 1951 Constitution Avenue properties near the National Mall in Washington. According to the Washington Examiner, the estimated renovation budget stood at $1.9 billion in 2023 before rising to $2.5 billion by 2025. Powell had testified before Congress about the costs, and Rep. Anna Paulina Luna later submitted a referral to then-Attorney General Pam Bondi, according to the Washington Examiner, alleging that Powell had misled Congress.

The investigation had struggled to build a legal foundation. A prosecutor handling the case acknowledged at a closed-door court hearing in March that the government had not yet found evidence of a crime, according to the Associated Press. Judge James Boasberg subsequently quashed subpoenas issued to the Federal Reserve, describing prosecutors' justification as "thin and unsubstantiated" and finding "essentially zero evidence" to suspect Powell of a crime, the AP reported. More recently, prosecutors made an unannounced visit to a construction site at the Fed's headquarters but were turned away, the AP reported.

The closure of the investigation resolves a specific obstacle to Warsh's confirmation. Sen. Thom Tillis, a North Carolina Republican, had said he would oppose Warsh until the investigation was resolved, effectively blocking a confirmation vote. Tillis has since said he intends to vote for Warsh. White House spokesman Kush Desai said the inspector general's "more powerful authorities best position it to get to the bottom of the matter," according to the Washington Examiner.

Warsh testified before the Senate Banking Committee on Tuesday, telling senators: "The president never once asked me to commit to any particular interest rate decision, period. Nor would I ever agree to do so if he had. ... I will be an independent actor if confirmed as chair of the Federal Reserve." His remarks came hours after Trump told CNBC he would be disappointed if Warsh did not immediately cut rates, according to the AP. Democrats on the committee raised questions about Warsh's independence from Trump, the transparency of some of his financial holdings, and what they described as inconsistency in his stated positions on interest rates.

If confirmed, Warsh could be in place before the Fed's meeting in June, according to the Washington Examiner. As a point of reference, the AP noted that Trump's previous Fed board appointee, Stephen Miran, was approved by the full Senate just 13 days after his nomination.