The Department of Justice has officially concluded its criminal investigation into Federal Reserve Chair Jerome Powell, effectively removing a primary obstacle to the Senate confirmation of Kevin Warsh, President Donald Trump’s nominee for the position. U.S. Attorney for the District of Columbia, Jeanine Pirro, announced the closure of the probe on Friday, shifting oversight to the Federal Reserve’s inspector general, Michael Horowitz.
The investigation centered on allegations of cost overruns during the renovation of the Federal Reserve’s Washington headquarters.
Senator Thom Tillis (R-N.C.) had previously conditioned his support for the confirmation of Kevin Warsh on the termination of this inquiry.
Despite the official closure, White House Press Secretary Karoline Leavitt cast ambiguity over the status of the investigation shortly after the announcement, creating a conflict in administrative signaling.
Democratic Senators Elizabeth Warren and Dick Durbin have formally demanded that Pirro provide clarity, specifically questioning the legitimacy of her recent public assertions that she retains the authority to reopen the criminal investigation at will.
Political Friction and Procedural Shifts
The investigation into Jerome Powell gained momentum in January, coinciding with sustained criticism from President Trump regarding the Federal Reserve's interest rate policy. Legal observers noted that a federal judge had previously criticized the investigation as unjustified and attempted to quash related subpoenas—an order Pirro had initially vowed to challenge on appeal before her sudden reversal.
The transition of the case to Michael Horowitz serves as a mechanism to shift the investigation from a criminal prosecution framework—which implies potential carceral outcomes—to an internal administrative audit. This move bypasses the aggressive posture held by the District of Columbia's federal prosecutor’s office but maintains institutional scrutiny over the building expenditures.
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Institutional Independence at Risk
The tension between the White House and the Federal Reserve reflects an escalating struggle over the limits of executive influence on monetary policy. With Powell’s term ending on May 15, the confirmation process for Kevin Warsh has become the focal point for both parties.
| Actor | Stance on Probe/Nominee |
|---|---|
| Jeanine Pirro | Dropped probe, claims authority to restart |
| Thom Tillis | Conditioned confirmation vote on ending probe |
| Elizabeth Warren/Dick Durbin | Challenging the legal basis of Pirro's threats |
| Donald Trump | Seeking new chair to lower interest rates |
Critics of the Trump administration view the probe as a tool of political pressure rather than a genuine inquiry into public spending. The ongoing questions regarding the status of Fed Governor Lisa Cook—who has faced separate allegations of mortgage fraud—further complicate the narrative of institutional stability within the central bank as the administration prepares for a leadership change.
