The Justice Department has concluded its inquiry into budget overruns during the remodeling of the Federal Reserve building under the leadership of chairman Jerome Powell, according to U.S. Attorney Jeanine Pirro. Pirro has directed the Federal Reserve’s Inspector General to review the construction expenses, emphasizing the IG’s role in ensuring accountability to taxpayers. She anticipates a prompt and detailed report that will address the concerns prompting the issuance of subpoenas.
Despite the closure of the investigation, Pirro stated that a criminal probe could be reinstated if necessary. A recent ruling by a federal judge had halted subpoenas to the Fed’s board of governors, citing improper pressure tactics linked to President Donald Trump’s requests for rapid interest rate reductions or Powell’s resignation. This legal dispute had implications on Powell’s tenure, which is set to end on May 15.
The investigation conducted by Pirro had influenced Powell’s decision to maintain his position as a Fed governor until 2028, the final year of Trump’s presidency. The administration’s threats, including the criminal probe, were jeopardizing the confirmation of Kevin Warsh, Trump’s nominee for Powell’s successor. Senator Thom Tillis opposed Warsh’s confirmation, viewing the investigation as an unwarranted attack on the Fed’s autonomy.
Critics, including Democrats and former Federal Reserve officials, condemned the cost investigation as a pretext to undermine the Fed’s independence from political interference. Trump’s inaccurate statements regarding renovation expenses had sparked controversy, with Powell correcting the figures publicly. The composition of the Fed’s board, with three governors appointed by President Joe Biden, underscored ongoing political tensions.
Senator Elizabeth Warren criticized the announcement as a maneuver to pave the way for Warsh’s nomination, questioning the pursuit of dismissing Lisa Cook and the potential revival of a criminal probe against Powell. Warsh emphasized the importance of monetary policy independence during Senate hearings and clarified that he had not made any commitments to Trump regarding interest rate adjustments. He attributed the current inflation surge to the Federal Reserve’s policies under Powell’s leadership, highlighting the economic challenges facing American households.