Full Breakdown
Justice Department Ends Criminal Probe of Fed Chair Jerome Powell, Clearing Path for Kevin Warsh Confirmation
4/25/2026, 4:46:51 AM
The Investigation’s Closure
On Friday, April 24, 2026, U.S. Attorney Jeanine Pirro announced that the Justice Department was closing its criminal investigation into Federal Reserve Chair Jerome Powell and the central bank’s headquarters renovation. The case was transferred to the Fed’s Office of the Inspector General for further review, ending the DOJ’s direct involvement for now.
Background and Context
The probe stemmed from a multi-year renovation of two historic Fed buildings in Washington, D.C. Initial cost estimates of $1.9 billion rose to roughly $2.5 billion, with the Fed citing unforeseen asbestos, a sinkhole, and higher material and labor prices. President Donald Trump and his allies repeatedly framed the overruns as evidence of “fiscal mismanagement” by Powell, using the issue to pressure the Fed for lower interest rates.
Key Figures and Groups
- Jerome Powell – Chair, Federal Reserve
- Kevin Warsh – Trump’s nominee to succeed Powell
- Donald Trump – President of the United States
- Jeanine Pirro – U.S. Attorney for the District of Columbia
- Kush Desai – White House spokesman
- James Boasberg – Chief Judge, U.S. District Court for D.C.
- Thom Tillis – Republican Senator from North Carolina, Senate Banking Committee member
- Federal Reserve Inspector General – Independent oversight office
Timeline of Major Developments
- 2017 – Renovation project approved by the Fed’s seven-member board.
- Early January 2026 – Powell announced DOJ subpoenas; Tillis pledged to block any Fed nominee until the probe ended.
- March 13 2026 – Judge Boasberg blocked the subpoenas, citing “essentially zero evidence.”
- April 24 2026 – DOJ formally ends the criminal investigation, referring the matter to the Inspector General.
Data and Statistics
- Original renovation estimate: $1.9 billion.
- Revised estimate reported by the Fed: $2.5 billion.
- President Trump’s claim during a site visit: $3.1 billion.
- Powell’s term as Fed chair expires May 15, 2026; the governor’s term ends January 2028.
Official Statements and Responses
- Justice Department – Pirro directed her office to close the probe while the Inspector General reviews the cost overruns.
- White House – Spokesman Kush Desai said taxpayers deserve answers and expressed confidence that the Senate will swiftly confirm Warsh.
- Federal Reserve – Declined comment on the DOJ announcement.
- Jerome Powell – Reiterated his intention to remain in office until the investigation concludes.
- Sen. Thom Tillis – Stated he will continue to block Warsh’s confirmation until the legal matters are resolved.
Criticism and Opposition
President Trump and White House officials, including budget chief Russell Vought, portrayed the renovation as a “Palace of Versailles” and accused Powell of fiscal mismanagement. Trump publicly confronted Powell about the alleged $3.1 billion cost, prompting Powell’s denial. Republican Senator Tillis leveraged the investigation to oppose Warsh’s nomination, arguing that no Fed official is above the law.
Conflicting Reports and Gaps
- Cost figures differ: the Fed reports $2.5 billion, while Trump cited $3.1 billion.
- Future investigation – Pirro warned she would “not hesitate to restart a criminal investigation should the facts warrant,” leaving open the possibility of renewed scrutiny.
Verbatim Quotes
- “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,” — Jeanine Pirro, U.S. Attorney for D.C.
- “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,” — Kush Desai, White House spokesman
- “I haven’t heard that,” — Jerome Powell, Federal Reserve Chair (refuting the $3.1 billion claim)
- “the Government has produced essentially zero evidence to suspect Chair Powell of a crime.” — James Boasberg, Chief Judge, U.S. District Court for D.C.
- “The president never once asked me to commit to any particular interest rate decision, period,” — Kevin Warsh, Fed nominee
Why It Matters
The DOJ’s withdrawal removes the primary legal obstacle to confirming Warsh, potentially shifting the Fed’s policy direction toward the lower-rate stance favored by the Trump administration. The episode also raises questions about the independence of the central bank when criminal investigations are used as political leverage.
What’s Next
The Senate Banking Committee is expected to schedule a confirmation vote on Warsh in the coming weeks. Meanwhile, the Fed’s Inspector General will complete its review of the renovation costs, and the Justice Department retains the option to reopen the probe if new evidence emerges.
