Justice Department Drops Criminal Probe of Fed Chair Powell, Likely Clearing Way for Warsh

The Justice Department has ended its probe into Federal Reserve chair Jerome Powell, clearing a major roadblock to the confirmation of his successor, Kevin Warsh.

U.S. Attorney for the District of Columbia Jeannine Pirro said on X that her office was ending its probe into the Fed's extensive building renovations because the Fed's Inspector General would scrutinize them instead.

Pirro said on X, "This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers.

"The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.

"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."

The decision ends an investigation that for months had failed to gain traction as prosecutors struggled to articulate a basis to suspect criminal conduct.

A prosecutor handling the case conceded at a closed-door court hearing in March that the government hadn't yet found any evidence of a crime, and a judge subsequently quashed subpoenas issued to the Federal Reserve.

The judge, James Boasberg, said prosecutors had produced "essentially zero evidence" to suspect Powell of a crime. Boasberg prosecutors' justification for the subpoenas as "thin and unsubstantiated."

More recently, prosecutors made an unannounced visit to a construction site at the Fed's headquarters but were turned away, drawing a rebuke from a defense attorney in the case who called the maneuver "not appropriate."