The Department of Justice will not reopen its criminal investigation into former Fed Chair Jerome Powell over the central bank's headquarters renovation. The decision follows a Fed inspector general report that found no grounds for a criminal referral but cited major oversight failures, and it drew an angry response from President Trump.
DOJ closes the book on Powell
The Department of Justice will not reopen its criminal investigation into Jerome Powell over the Federal Reserve's overbudget headquarters renovation, a Justice Department spokesperson told CNBC. According to Bloomberg: "We're not reopening a criminal investigation into him," Blanche said in an interview Friday.
Blanche did not rule out separate department action tied to the renovation. He told Bloomberg an independent audit of the project could still prompt an investigation if it turns up evidence of criminal wrongdoing.
Inspector general found no criminal grounds
Blanche's comments follow the Fed inspector general's finding that there were no reasonable grounds to believe a federal crime had occurred, so no referral to the attorney general was warranted. The watchdog nevertheless faulted the central bank for major management and oversight failures that contributed to the project's soaring costs.
The Justice Department opened its investigation into the renovation in January and issued grand jury subpoenas seeking related records. A federal judge quashed those subpoenas in March, ruling they had been issued for an improper purpose and that the government had produced essentially no evidence Powell committed a crime. The DOJ disputed the ruling but later closed its investigation rather than appeal.
Trump presses for Powell's exit
President Trump slammed the decision, saying in a Truth Social post that Powell should be "forced to resign" from the Fed's Board of Governors "at a minimum." Fed Chairman Kevin Warsh, who succeeded Powell in May, said the central bank would bring in an independent auditor and strengthen oversight of the renovation project.
Powell remains on the Board of Governors, where his separate term runs through Jan. 31, 2028. Trump has repeatedly pushed Powell to leave the board after years of clashes over interest-rate policy.
Source: CNBC
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