The United States Department of Justice has ended its criminal investigation of Federal Reserve Chair Jerome Powell, with the nomination of replacement Kevin Warsh now set to advance in the Senate.
The probe concerned cost overflows in the Fed’s ongoing renovation of its headquarters. President Donald Trump has repeatedly criticised and threatened to fire Powell for not lowering interest rates more aggressively, however.
Republican Senator Thom Tillis, a Senate Banking Committee member, had refused to vote for any Fed nominees until the investigation was resolved. Tillis said today that he would allow the confirmation process for Warsh to advance, with a Banking Committee vote due on Wednesday.
“This morning the Inspector General for the Federal Reserve has been asked to scrutinise the building costs overruns – in the billions of dollars – that have been borne by taxpayers,” wrote the District of Columbia’s U.S. Attorney Jeanine Pirro.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro wrote. “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.”
Powell had reportedly already asked the Fed’s Inspector General to review the renovations' cost last July.
According to Pirro, the Department of Justice could restart a criminal investigation “should the facts warrant doing so”.
Powell’s term as chair ends on 15 May, though he has said he will stay on temporarily if Warsh is not confirmed by then.
Warsh was previously a Fed governor from 2006 to 2011, and has claimed that Trump has not asked him to commit to lowering interest rates if confirmed as chair.
Senator Elizabeth Warren, the Banking Committee’s highest-ranking Democrat, called the investigation’s closure “just an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair”.
