The Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell and transferring the matter to the Fed’s Office of Inspector General, a move that removes a key obstacle to the confirmation of Kevin Warsh, President Trump’s preferred nominee to lead the central bank.
US Attorney Jeanine Pirro, the top federal prosecutor in Washington, said the inquiry — which had examined cost overruns tied to renovations at the Fed’s Washington headquarters — will for now be handled by the IG. Pirro said the IG ‘has the authority to hold the Federal Reserve accountable to American taxpayers’ and that she expects a comprehensive report ‘in short order,’ expressing confidence it will resolve the questions that prompted subpoenas from her office.
The probe had become politically charged. Last month, a federal judge blocked subpoenas to the Fed’s Board of Governors, ruling they were issued for the improper purpose of pressuring Powell to lower interest rates or resign. Chief US District Judge James Boasberg found prosecutors had shown ‘essentially zero evidence’ that Powell committed a crime.
Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, had called the investigation ‘baseless’ and withheld his support for Warsh’s confirmation until the Justice Department dropped its actions. Tillis’s blockade had effectively stalled Warsh’s nomination; with the DOJ winding down the probe and handing it to the IG, that barrier to the nomination has been removed.