The Department of Justice announced Friday that it has dropped its criminal probe of Federal Reserve Chair Jerome Powell, removing a major hurdle to the Senate confirmation of Kevin Warsh, President Donald Trump’s nominee to replace Powell.
Jeanine Pirro, the top federal prosecutor in the District of Columbia, announced the decision in a post on X.
The announcement comes after Pirro had said on Wednesday that she was committed to continuing the investigation, which had been crippled by a federal judge’s ruling that quashed subpoenas her office issued to the Federal Reserve related to a multi-billion-dollar renovation of its headquarters in Washington. Trump, himself, has said publicly that he thought the investigation should move forward.
Sen. Thom Tillis, a North Carolina Republican, had put an effective hold on the Senate even voting to confirm Warsh unless the criminal proble of Powell was dropped.
Cost Overruns
On Friday, Pirro said that the Federal Reserve’s inspector general, an internal watchdog, had been asked to investigate cost overruns in the headquarters project, which CNBC noted had been the purported basis for Pirro’s criminal probe of Powell.
Powell, and others, had said that the real reason for the probe was to pressure Powell and the central bank to lower interest rates as Trump wanted.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in her post on X.
“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,” she said. “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro said.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” Pirro said.
White House Confident of Quick Confirmation
“American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter,” White House spokesman Kush Desai said in a statement.
“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” Desai said.
Earlier this month, Trump said that if Fed Chair Jerome Powell stays on as a Fed governor after his successor is named, that the president will have him removed from office.
“Then I’ll have to fire him,” the president said during an interview on Fox Business. “If he’s not leaving on time — I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial. I want to be uncontroversial.”
