The Justice Department is closing its investigation into cost overruns associated with renovations at the Federal Reserve under Chairman Jerome Powell, according to statements from U.S. Attorney Jeanine Pirro.
Key Takeaways
The Justice Department is closing its investigation into cost overruns of Federal Reserve renovations under Chairman Jerome Powell. The Fed's inspector general will now review the costs.
- DOJ closes probe into Fed renovation cost overruns
- U.S. Attorney Jeanine Pirro directs IG to scrutinize building costs
- Investigation had threatened Kevin Warsh's confirmation as next Fed chair
- Federal judge blocked grand jury subpoenas in April
Pirro announced on Friday that the Inspector General of the Federal Reserve has been tasked with reviewing the building costs, effectively transferring the inquiry to an internal watchdog. This decision removes a significant obstacle for the confirmation of Kevin Warsh, President Trump's nominee to replace Powell as head of the central bank's Board of Governors.
The investigation had centered on alleged cost overruns in the renovation of two historic Federal Reserve buildings in Washington, D.C. According to CNBC, the actual cost is roughly $2.5 billion, though President Trump has claimed it is closer to $4 billion. The probe had raised concerns about the Fed's independence from executive-branch interference.
The investigation faced a major setback last month when a federal judge blocked grand jury subpoenas issued by Pirro's office. Judge James Boasberg ruled that there was evidence suggesting the subpoenas were intended to pressure the Fed's board. Pirro has since appealed this decision, stating her commitment to continuing the investigation if necessary.
Senator Thom Tillis (R-N.C.) had vowed to block Warsh's nomination until the DOJ dropped its probe of Powell. With the investigation now closed and handed over to the Inspector General, Tillis's hold on Warsh's confirmation may be lifted. The Senate Banking Committee could vote on Warsh's nomination as early as the week of May 11.
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