Democratic Senators Challenge DOJ Decision to Pause Powell Investigation

The Department of Justice's criminal investigation into Federal Reserve Chair Jerome Powell is merely "temporarily paused," a pair of Democratic senators said in a letter sent to the department Friday and obtained first by CNBC. "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," Sens. Elizabeth Warren, D-Mass., and Dick Durbin, D-Il., said in the letter addressed to U.S. Attorney for the District of Columbia Jeanine Pirro. Pirro said in a statement Friday that the Fed's inspector general had been asked to investigate cost overruns an ongoing renovation project. Pirro didn't specify who had made the request. Powell had last year asked the inspector general to look into the issue. "I have directed my office to close our investigation as the IG undertakes this inquiry," Pirro said. "Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so." Pirro's office didn't immediately respond to a request for comment. The Fed declined earlier Friday to comment on Pirro's decision. Powell in January said he had received subpoenas from Pirro's office. He denounced them as a pretext and said the Trump administration was displeased with him for not cutting interest rates faster and deeper than the Fed believed was justified. Prosecutors for Pirro's office told a judge in March that they didn't have specific evidence of wrongdoing. The judge proceeded to quash Pirro's subpoenas. Appellate attorneys told CNBC that an appeal would be difficult. The senators' letter probes the potential political motivations of the investigation. "From your perspective, what are the types of 'facts' that would warrant reopening the investigation?" Warren and Durbin ask. They ask Pirro if President Donald Trump or other administration officials were informed about the decision to halt the investigation. They also ask for details on the request to the Fed's inspector general. Scott Alvarez, a former general counsel for the Fed, said earlier Friday the institution was likely asking Pirro about similar issues. "What kind of facts would cause her to reopen the investigation when she initially started it without any facts?" he said. Warren said earlier Friday that she didn't believe the Senate shouldn't move ahead on the confirmation of Kevin Warsh, Trump's nominee to replace Powell. Warsh testified before the Senate Banking Committee on Tuesday. A Republican on the committee, Sen. Thom Tillis of North Carolina, has pledged to block the nomination while the investigation continues. Tillis hasn't commented on Pirro's decision.