Justice Department prosecutors have dropped their investigation into Federal Reserve Chair Jerome Powell, U.S. Attorney for the District of Columbia Jeanine Pirro announced Friday in an X post.
By weekend’s end, it appeared the move cleared one of the biggest hurdles blocking the ascent of Powell’s potential successor.
Sen. Thom Tillis, R-NC, on Sunday backed off of his long-held pledge to vote against any Fed nominee until the probe against Powell was closed.
“I take the Department of Justice at its word,” Tillis wrote Sunday on X. “With these assurances, I look forward to supporting Kevin Warsh’s confirmation. He is an outstanding nominee, and it is time for the Federal Reserve to move beyond this distraction and return its full attention to its mission.”
Warsh, a former Fed governor, testified Tuesday in front of the Senate Banking Committee in a bid to become Fed chair after Powell’s term ends May 15. But Tillis’ continued disapproval of the Powell investigation would have prevented Warsh’s nomination from reaching the full Senate, assuming all the committee’s 11 Democrats would also have voted “no.”
At issue was the motivation behind the probe. The DOJ has argued it issued subpoenas against Powell over renovations at two Fed buildings that went well over budget – and was investigating whether the Fed chair lied to Congress about them.
Powell – and the judge hearing the case – have concluded the probe was a pretext to pressure the Fed chair to resign and make way for leadership that would lower interest rates.
Trump has openly mocked Powell over his reluctance to lower interest rates as quickly as the president would like – and recently resumed chatter that he would fire the Fed chair if he doesn’t step down when his term ends.
In the DOJ’s stead, the Fed’s inspector general “has been asked to scrutinize” the renovations at the central bank buildings, Pirro wrote Friday.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro wrote. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”
But Pirro suggested Friday that her battle isn’t over.
“I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she wrote in her post.
Tillis was not the only lawmaker to comment on the end of the DOJ probe.
Sen. Elizabeth Warren, D-MA, noted in a statement Friday that Pirro “threatened to restart the bogus criminal investigation into Fed Chair Powell at any time.”
“Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” Warren wrote. “The Senate should not proceed with the nomination of Kevin Warsh.”
Warren tweaked that wording slightly in a Saturday post on X, writing, “Any Republican Senator who believes Donald Trump’s scheme to take over the Fed is over is fooling themselves.”
The end of the DOJ investigation marks a turnaround from comments Pirro made just two days earlier.
“The cost overruns on that building are well over a billion dollars,” Pirro said at a press conference Wednesday, according to CNBC. “This investigation continues.”
Warren and Sen. Dick Durbin, D-IL, pressed Pirro later Friday in a letter, calling the prospect of a reopened Powell investigation a “stark warning.”
“Your announcement leaves the door wide open for you to relaunch the criminal probe against Chair Powell – or future baseless investigations into Powell or other Fed Governors and a future Fed Chair – should it once again become politically expedient for you to do so,” the senators wrote. “Your assertion that the ‘facts’ will guide your future decision-making is also cold comfort, as it appears that the President’s whims – not reality – have guided the DOJ’s investigation to date.”
Warren and Durbin asked Pirro to tell them – by Monday – what “types of ‘facts’ ... would warrant reopening the investigation.”
Reaction on the other side of the aisle could be seen as less cynical.
“As I’ve said from the beginning, the American people deserve answers about the unacceptable cost overruns at the Federal Reserve,” Sen. Tim Scott, R-SC, said in a statement Friday. “These serious concerns warrant scrutiny, and I’m pleased this matter is continuing to receive it.”
Scott, the Senate Banking Committee’s chair, invited the Fed inspector general to brief his panel within 90 days on any findings.
The Senate Banking Committee, meanwhile, is due to vote on Warsh’s nomination April 29.