DOJ Ends Criminal Probe Into Fed Chair Jerome Powell, Clearing Way for Kevin Warsh

The U.S. Department of Justice ended its criminal investigation into Federal Reserve Chair Jerome Powell on Friday, clearing a major hurdle for the Senate to confirm President Donald Trump’s nominee Kevin Warsh as Powell’s successor.

“DOJ dropping criminal probe of Fed Chair Jerome Powell amid pressure from senators The investigation threatened to delay the confirmation of Powell's successor”

ABC News

District of Columbia U.S. Attorney Jeanine Pirro announced the decision, saying, "Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry."

ABC News

Pirro also said, "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," framing the shift as a handoff to the Fed’s inspector general.

Multiple outlets tied the probe to the Fed’s Washington headquarters renovation, which the Fed described as a multibillion-dollar project with costs that rose beyond initial estimates.

NBC News reported that the criminal probe centered on the renovation of two historic buildings owned by the central bank, and that the Fed initially pegged the cost around $1.9 billion before it rose to around $2.5 billion.

NBC News also reported that the Fed said the cost increases were due to unforseen changes to the plans, the rising cost of raw materials, equipment and labor, and that it uncovered more asbestos on the site than expected, as well as a sinkhole.

In a separate account, ABC News said Powell’s term ends next month and that he said in March he would stay in the position until President Donald Trump’s pick to lead the Fed, Kevin Warsh, is confirmed.

Pirro’s announcement made the Fed’s inspector general the focal point for the remaining scrutiny, with Pirro saying the IG had been asked to examine the renovation cost overruns.

In Pirro’s framing, the IG would be positioned to produce a report that could resolve questions that led her office to issue subpoenas, and she said she expected "a comprehensive report in short order" and that she was "confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas."

Business Insider

ABC News and CNBC both quoted Pirro’s warning that her office would not permanently abandon the criminal track, with Pirro writing, "Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so."

NBC News similarly reported that Pirro said she would "not hesitate to restart a criminal investigation should the facts warrant doing so."

NBC News added that the inspector general had already reviewed the project twice and found no wrongdoing, and that Powell asked for another review in 2025 amid pressure from President Donald Trump and his top allies.

ABC News said the Fed’s independent inspector general conducted an audit of the building renovation costs in 2021 and that Powell had asked the watchdog to take a fresh look at the $2.5 billion project last year.

The White House backed the shift, with White House spokesperson Kush Desai telling ABC News that "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."

The DOJ’s decision came after Sen. Thom Tillis had effectively blocked Senate action on Warsh, tying his cooperation to the status of the criminal probe.

“- The DOJ will drop the criminal probe into Fed Chair Jerome Powell”

Business Insider

ABC News reported that senior DOJ officials contacted senators including Republican Sen. Thom Tillis, who sits on the Senate Banking Committee, informing them of the plan to drop the probe and refer the matter regarding alleged cost overruns at the Fed's Washington headquarters to the bank's internal watchdog.

ABC News also said Tillis told ABC News on Tuesday that he supports Warsh as the nominee but will not advance his nomination until the DOJ's probe is dropped, and that Tillis first announced in January that he would block nominees in opposition to the investigation, which he branded as "bogus."

In a March context, ABC News quoted Tillis urging Pirro not to continue, saying, "We all know how this is going to end and the D.C. U.S. Attorney's Office should save itself further embarrassment and move on," and adding, "Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair."

CNBC described Tillis as having put an effective hold on the full Senate voting on Warsh’s nomination unless the criminal investigation ended, and it quoted Pirro saying, "The IG has the authority to hold the Federal Reserve accountable to American taxpayers."

The Hill reported that the end of the criminal probe likely cleared the way for Warsh’s confirmation and described Tillis as having reiterated last week that he would not support any Trump nominee to the bank until the DOJ wrapped up its investigation.

The Hill also said Tillis has the ability to block nominees from being approved by the panel for a full confirmation vote, given the narrow 13 to 11 GOP majority on the commitee.

The investigation’s political context was a recurring theme across outlets, with Powell and Warsh portrayed as pushing back on claims that the probe was meant to influence interest-rate decisions.

ABC News reported that in a video message in January, Powell revealed the investigation and called it an attempt by the Trump administration to put political pressure on the Fed to lower interest rates.

CNBC

NBC News similarly described Trump’s pressure campaign, saying Trump had been pressuring Powell to support a dramatic cut to benchmark interest rates set by the Fed's Open Market Committee since taking office again in 2025, and that Trump had insulted and attacked Powell for years.

NBC News also included Powell’s own account of the subpoenas, quoting Powell’s video release: "No one—certainly not the chair of the Federal Reserve—is above the law," and "But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure."

Warsh’s confirmation hearing testimony and remarks were also central to the post-probe outlook.

NewsNation reported that Warsh said Tuesday that, "The president never once asked me to commit to any particular interest rate decision, period," and added, "I will be an independent actor if confirmed as chair of the Federal Reserve."

CNBC reported that Sen. Elizabeth Warren of Massachusetts said the abandonment of the Powell investigation was "just an attempt to clear the path for Senate Republicans to install President Trump's sock [puppet] Kevin Warsh as Fed Chair."

The DOJ’s pivot also reflected legal setbacks that had already undermined the criminal case, with multiple outlets describing how a federal judge quashed subpoenas and criticized the evidence supporting the probe.

“The Department of Justice on Friday dropped its criminal investigation of Federal Reserve Chair Jerome Powell, removing a major hurdle to the Senate confirming President Donald Trump's nomination of Kevin Warsh to replace him”

CNBC

ABC News said Pirro had been insistent that her investigation would continue despite a ruling last month from D.C. District Judge James Boasberg that tossed out subpoenas she had sent to Powell.

CNN

ABC News quoted Pirro’s response to that ruling, saying, "This investigation continues. I am in the legal lane. There are others who are in the political lane. I don't intersect those two lanes," and she said, "I am going forward," while describing the need to appeal.

NBC News reported that on March 13, Chief Judge James Boasberg blocked the subpoenas served to the Fed from Pirro’s office, and in his ruling Boasberg wrote that “the Government has produced essentially zero evidence to suspect Chair Powell of a crime.”

NBC News also quoted Boasberg’s additional language, saying, "A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning," and it described how the controversy rocked the central bank and the Republican-controlled Senate in early January.

NewsNation added that 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 that a judge subsequently quashed subpoenas issued to the Federal Reserve.

NewsNation also said 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 who called the maneuver “not appropriate.”