The U.S. Department of Justice has dropped a criminal case against Federal Reserve Chairman Jerome Powell, a move widely seen as clearing the way for President Donald Trump's preferred candidate, Kevin Warsh, to lead the central bank. The case, demanded by Trump, centered on cost overruns in renovations at the Fed's Washington, D.C., headquarters.
Background of the Investigation
Trump had pushed for a criminal probe into the renovations and repeatedly called for Powell's removal over his refusal to lower interest rates. The investigation became a political flashpoint, with Senator Thom Tillis (R-NC) vowing to vote against Warsh's confirmation unless the Justice Department backed off.
Prosecutors Close the Case
U.S. Attorney for Washington, D.C., Jeanine Pirro announced on Friday that her office has closed the investigation. In a statement, she said the Federal Reserve's Office of Inspector General has taken over the probe into building cost overruns. “The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said. “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.” She added that she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
Political Reactions
Senator Elizabeth Warren (D-MA) has been a vocal critic of Warsh, branding him a “sock puppet” for the Trump family. The decision to drop the case is likely to intensify debate over the Fed's independence and political influence on monetary policy. This is a developing story.
