The United States Department of Justice has officially ended its criminal investigation into Jerome Powell, removing a key obstacle to the potential confirmation of his successor, Kevin Warsh.
Investigation Shifted to Internal Oversight
The probe, which focused on costly renovation projects at the Federal Reserve’s Washington headquarters, will now be handled by the central bank’s internal watchdog. Jeannine Pirro confirmed that the Federal Reserve’s Office of Inspector General will review concerns over spending and accountability.
She emphasized that the watchdog has the authority to ensure transparency and proper use of taxpayer funds, and a detailed report is expected soon.
No Evidence of Criminal Conduct
The investigation struggled to gain traction for months. Prosecutors were unable to establish any solid basis for criminal charges. During a court hearing, officials acknowledged that no evidence of wrongdoing had been found.
A federal judge, James Boasberg, dismissed subpoenas related to the case, stating that the claims were unsupported and lacked substance.
Impact on Federal Reserve Leadership Transition
With the investigation now closed, the confirmation process for Kevin Warsh could move forward more quickly. His nomination by Donald Trump had faced delays due to the ongoing probe.
Senator Thom Tillis had previously opposed the nomination until the investigation was resolved, effectively blocking progress.
Senate Debate Over Warsh’s Independence
Warsh’s confirmation hearings have sparked political debate. While Republican lawmakers expressed support, Democrats raised concerns about his independence and financial transparency.
Elizabeth Warren questioned whether Warsh could act independently in monetary policy decisions. In response, Warsh stated clearly that he would not commit to any predetermined interest rate actions and would maintain independence if confirmed.
Political Context and Next Steps
The decision to drop the probe marks a rare step back for the Justice Department, which has recently pursued several investigations into high-profile figures. With this case closed, attention now shifts to the Senate’s next move on confirming new leadership at the Federal Reserve.
Powell’s term as chair is set to end on May 15, making the upcoming decision critical for the future direction of US monetary policy.
