Justice Department Formally Closes Powell Criminal Probe, Easing Path For Warsh Fed Nomination
The Justice Department formally closed its criminal investigation into Federal Reserve Chair Jerome Powell on Friday, clearing the main obstacle to President Donald Trump's nominee, Kevin Warsh, winning Senate confirmation.
U.S. Attorney for the District of Columbia Jeanine Pirro announced on X that she had directed her office to close the probe. She said the Fed inspector general will continue a separate review of cost overruns at the Fed's headquarters. Pirro left open the possibility of reopening the case and reserved the right to pursue charges later. The probe's subpoenas had been quashed by Judge James Boasberg earlier this year, and the Justice Department's effort to revive those subpoenas was denied.
The episode traces back to a multiyear renovation of the Fed's Washington buildings whose estimated costs rose to about $2.5 billion by 2025. Unforeseen asbestos, toxic soil, a high water table and design changes drove overruns, and the Fed had earlier audited the project twice with no findings of wrongdoing. Powell testified to the Senate Banking Committee about the project's budget in June 2025, drawing public attacks from President Trump that escalated into criminal scrutiny. After Trump nominated Kevin Warsh in January 2026, the U.S. attorney launched a criminal probe tied to Powell's testimony and issued subpoenas to the Fed.
Early mainstream reports portrayed Friday's closure as a legal choice that clears Warsh's path, but later coverage highlighted political pressure behind the decision. MS NOW and NPR added reporting that Senator Thom Tillis had threatened to block Warsh until the probe closed and that the White House framed the inspector general as better suited to investigate.
The Fed inspector general says it began reviewing the renovation in July and will report its findings publicly to Congress. Social media responses split along partisan lines, with some celebrating the end of what they called a meritless probe and others accusing the Justice Department of political interference. Pirro's office had tried days earlier to enter the renovation site and been denied, a sequence critics say illustrates how the inquiry mixed legal work with political theater.
📊 Relevant Data
The Federal Reserve's headquarters renovation costs have increased from initial estimates due to unforeseen conditions such as higher-than-anticipated asbestos levels, toxic soil contamination, and a higher water table, as well as changes in building designs from consultations with review agencies and differences between estimated and actual costs of materials, equipment, and labor.
Federal Reserve’s Renovation of Two Historic Buildings — Federal Reserve Board
The Federal Reserve's Office of Inspector General conducted audits of the renovation project in 2021 and 2022, finding no wrongdoing, and initiated a fresh review in 2025 at Chair Powell's request.
Federal Reserve’s Renovation of Two Historic Buildings — Federal Reserve Board
Kevin Warsh, nominated to chair the Federal Reserve, served as a Federal Reserve Governor from 2006 to 2011 and prefers using interest rate adjustments over balance sheet tools for monetary policy, viewing them as fairer and more effective for fighting inflation.
📌 Key Facts
- U.S. Attorney for D.C. Jeanine Pirro announced on X that she has directed her office to close the criminal investigation into Fed Chair Jerome Powell over alleged false statements to Congress about Federal Reserve headquarters renovation costs, saying the Fed Inspector General will instead examine the cost overruns.
- The Fed Inspector General's office had already been evaluating the renovation since July, has reviewed the project twice (reportedly finding no wrongdoing), and says it will publicly release its findings to Congress.
- Pirro's decision followed recent aggressive investigative steps by her office — prosecutors made an unannounced attempt to enter the renovation site and subpoenas tied to Powell's June 2025 Senate testimony had threatened an indictment — but Judge James Boasberg quashed those subpoenas as an improper pretext to pressure Powell and DOJ's bid to revisit that ruling was denied earlier this month.
- Pirro had publicly vowed days earlier to continue and appeal the investigation but reversed course within the week, closing the probe while explicitly leaving open the possibility of reopening a criminal case in the future.
- Senate politics were central: Sen. Thom Tillis had vowed to block Kevin Warsh's nomination to the Fed unless DOJ dropped the investigation, and multiple White House officials urged Tillis to move forward after the probe's closure — a development described as clearing the way for Warsh's confirmation.
- The White House framed the shift as sending the matter to the Inspector General — with spokesman Kush Desai saying the IG has “more powerful authorities” to examine the renovation — and also cast the closure in political and policy terms.
- Critics, including Sen. Elizabeth Warren and several media accounts, characterized the move as an effort to clear a path for Warsh; reporting also noted continued DOJ scrutiny of other Fed officials (including Governor Lisa Cook) and public commentary that President Trump had been personally involved in pushing the Powell case and making new allegations.
📊 Analysis & Commentary (1)
"The WSJ editorial argues that the Justice Department’s closure of the criminal probe into Jerome Powell was a welcome end to a politically motivated roadblock, clearing the way for Kevin Warsh’s confirmation and deserving of support."
📰 Source Timeline (7)
Follow how coverage of this story developed over time
- PBS segment confirms the DOJ is dropping its criminal probe into Jerome Powell over whether he lied to Congress about Fed headquarters renovations.
- U.S. Attorney for D.C. Jeanine Pirro says the Fed inspector general will instead examine renovation cost overruns.
- White House Press Secretary Karoline Leavitt publicly urges Sen. Thom Tillis to move forward quickly on Kevin Warsh’s confirmation after he threatened to block it unless DOJ dropped the investigation.
- Segment reiterates that the probe focused specifically on alleged false statements to Congress about renovation costs.
- The White House has publicly reacted to the Justice Department's decision to drop the investigation into Jerome Powell.
- CBS segment indicates the administration is now framing the closure of the probe in political and policy terms, beyond the DOJ legal explanation.
- Column recounts that as recently as Tuesday of the same week, Trump went on CNBC and effectively admitted he was helping steer the Powell case and made new, evidence-free allegations against Powell.
- Notes that on Wednesday, U.S. Attorney Jeanine Pirro publicly vowed to continue the case against Powell before reversing course and closing it on Friday morning.
- Reinforces that Pirro explicitly left the door open to potentially pursuing Powell again in the future, even as she closed the current investigation.
- Confirms that U.S. Attorney Jeanine Pirro explicitly directed her office on X to close the Powell investigation while the Fed inspector general continues a cost‑overrun review.
- Notes that the Fed inspector general’s office says it has been evaluating the renovation since July and will release its findings publicly to Congress.
- Reports that Pirro’s decision came just days after prosecutors from her office made an unannounced attempt to enter the Fed’s renovation site and were denied access.
- Recaps that the subpoenas threatening an indictment were tied to Powell’s June 2025 Senate Banking testimony about the renovation project.
- Details that Judge James Boasberg quashed the subpoenas as a pretext to pressure Powell to cut rates or resign, and that DOJ’s bid to revisit that ruling was denied earlier this month.
- Highlights Pirro’s public shift from vowing to appeal and continue the investigation to now closing it, while reserving the right to restart a criminal case.
- Includes a White House quote from spokesman Kush Desai framing the inspector general’s “more powerful authorities” as best suited to probe the Fed’s renovation costs.
- NPR confirms the U.S. Attorney for D.C. Jeanine Pirro announced on X that she has directed her office to close the Powell investigation as the Fed Inspector General undertakes a review.
- NPR notes explicitly that the Fed's inspector general has already reviewed the headquarters renovation project twice and found no wrongdoing.
- NPR reiterates that Sen. Thom Tillis, R-N.C., had threatened to block Kevin Warsh's nomination unless DOJ dropped the investigation, and characterizes the closure as paving the way for Warsh’s confirmation.
- Identifies U.S. Attorney Jeanine Pirro’s public statement explicitly directing her office to close the Powell investigation as the Fed inspector general conducts an inquiry into renovation costs.
- Clarifies that the Fed inspector general was already tasked with evaluating the renovation project before Pirro’s request, despite her implication it was requested that morning.
- Adds a White House statement from spokesperson Kush Desai framing the inspector general as having “more powerful authorities” to examine the renovation.
- Details Sen. Thom Tillis’s vow to block Kevin Warsh’s confirmation as long as the Powell probe continued and notes that closure removes that obstacle.
- Includes Sen. Elizabeth Warren’s on‑the‑record criticism calling the move an attempt to clear the path for Warsh and highlighting DOJ’s continuing criminal probe of Governor Lisa Cook.