Justice Department ends investigation into Federal Reserve Chairman Jerome Powell
The Justice Department will end its investigation into the Federal Reserve and Chairman Jerome Powell, possibly paving the way for a successor to be named.
The Justice Department on April 24 ended its criminal investigation into the Federal Reserve and Chairman Jerome Powell, likely clearing the way for Senate confirmation of his successor, Kevin Warsh.
D.C. U.S. Attorney Jeanine Pirro announced the decision in a social media post, saying the investigation related to the budget for a multibillion-dollar renovation project at the central bank’s headquarters in Washington is closed. Pirro said Friday morning that the Federal Reserve’s inspector general had been asked to investigate the construction cost overruns on his behalf.
“I look forward to a comprehensive report soon and am confident that its findings will help our office fully resolve the questions that led us to issue the subpoena,” Pirro said. “Accordingly, as law enforcement conducts this investigation, I have directed my office to close the investigation, but note that we will not hesitate to reopen a criminal investigation if the facts warrant.”
Ahead of the investigation, the Fed released FAQs related to the project and a letter from Powell to Director of Management and Budget Russell Vought, amid criticism from President Donald Trump and members of his administration. In a July 2025 letter, Powell said the inspector general had previously audited the renovation project and asked the inspector general to review it again.
In January, former Fed Chairs Janet Yellen, Ben Bernanke and Alan Greenspan called the investigation “an unprecedented attempt to use prosecutorial attacks to undermine central bank independence.” Chairman Powell condemned the investigation in an unusual video statement, calling it a “pretext” and suggesting it was a response to the Fed’s reluctance to base monetary policy decisions on the president’s wishes.
Karl Tobias, a law professor at the University of Richmond, said it was a “good decision” to drop the investigation. “It wasn’t clear that there was actually any evidence of criminal activity by Mr. Powell, so continuing the investigation was basically just going to hurt him and not lead to a very positive outcome for him or the Fed.”
Warsh’s confirmation in the Senate is being blocked by Sen. Thom Tillis (R-North Carolina), who wants to halt the investigation. At Warsh’s Senate confirmation hearing on April 21, Mr. Tillis otherwise appeared to support Mr. Warsh as a candidate.
“Let’s stop this investigation so I can support your confirmation,” Tillis told Warsh.
“I don’t think Tillis was going to back down,” Tobias told USA TODAY. “A number of senators, Republican and Democratic, urged President Trump to find a way out. … So it’s not surprising that it happened, but I think it makes it more likely that Mr. Warsh will move forward.”
Sen. Elizabeth Warren (D-Mass.), who serves on the Senate Banking Committee and criticized Warsh’s nomination during an April 21 hearing, called the move “an attempt by Senate Republicans to clear the way for President Donald Trump’s sock puppet to be installed.”
“I want to be clear about what the Department of Justice announced today: Instead of dropping its ridiculous criminal investigation against Governor (Lisa) Cook, it threatened to reopen its bogus criminal investigation against Fed Chair Jerome Powell at any time,” Warren said in a statement. “Anyone who believes Donald Trump’s corrupt plan to take over the Fed is over is fooling themselves. The Senate should not move forward with Kevin Warsh’s nomination.”
It is unclear when the Senate will vote to confirm Mr. Warsh, but there is less than a month until Mr. Powell’s term as chairman ends on May 15th. Powell has said he intends to remain as chairman on an interim basis unless a successor is approved by the end of his term. He told reporters on March 18 that he plans to remain on the Fed board until the investigation is “truly concluded” (his term ends in January 2028).
Press Secretary Khush Desai said the White House is confident the Senate will confirm Warsh in the near future.
“American taxpayers deserve answers for the Federal Reserve’s fiscal mismanagement, and the more powerful authorities in the Office of Inspector General are best positioned to get to the bottom of the matter,” Desai said in a statement. “The White House remains confident as ever that the Senate will swiftly confirm Kevin Warsh as the next Fed Chairman to finally restore competency and confidence in Fed decision-making.”
(This story has been updated to add new information.)
Contact Rachel Barber at rbarber@usatoday.com, follow her at X @rachelbarber_ and subscribe to her newsletter Making More of Your Money here.
