Justice Department declines to reopen criminal investigation into Jerome Powell over Fed headquarters renovation
Quick Look
- The Department of Justice will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell regarding the Federal Reserve's overbudget headquarters renovation, a DOJ spokesperson told CNBC.
- The decision follows the Fed's inspector general finding no reasonable grounds to believe a federal crime occurred, though it cited major management and oversight failures.
- President Trump criticized the outcome, urging Powell's resignation from the Fed's Board of Governors.
AI-generated summary
Why It Matters
The Justice Department opened an investigation in January into the Federal Reserve's headquarters renovation project after issuing grand jury subpoenas. A federal judge quashed those subpoenas in March, finding they were issued for an improper purpose and that the government had produced essentially no evidence of criminal wrongdoing by Powell. The DOJ disputed the ruling but closed the investigation rather than appeal.
The Department of Justice will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell over the central bank's overbudget multibillion-dollar headquarters renovation a department spokesperson told CNBC.
"We're not reopening a criminal investigation into him," Blanche told Bloomberg in an interview Friday.
Blanche did not rule out future Justice Department action in his interview. He told the outlet an independent audit of the renovation could prompt an investigation if it uncovers evidence of criminal wrongdoing.
His comments come days after the Federal Reserve's inspector general found no reasonable grounds to believe that a federal crime had occurred requiring a referral to the attorney general, even as the watchdog faulted the central bank for major management and oversight failures that contributed to the project's soaring costs.
President Donald Trump slammed the decision, said in a Truth Social post Wednesday after the news, saying that Powell should be "forced to resign" from the central bank's Board of Governors "at a minimum."
"He can't manage a Building, and he certainly shouldn't be allowed to manage his High Interest Rate Policy (only on 'TRUMP!')," Trump said.
The Justice Department opened its investigation into the renovation in January. Prosecutors issued grand jury subpoenas seeking related records but a federal judge quashed those subpoenas in March, finding they had been issued for an improper purpose and that the government had produced essentially no evidence that Powell committed a crime. The DOJ disputed the ruling but later closed its investigation rather than appeal.
Fed Chairman Kevin Warsh, who succeeded Powell in May, said the central bank would bring in an independent auditor and strengthen oversight of the project. Powell remains on the Fed's Board of Governors, where his separate term runs through Jan. 31, 2028.
Trump has repeatedly pushed Powell to leave the board altogether after years of clashes over interest-rate policy.
CNBC's Ryan Ruggiero contributed to this report.
What to Watch
AI outlook — possibilities, not facts
The independent audit of the Federal Reserve's headquarters renovation could prompt a future Justice Department investigation if it uncovers evidence of criminal wrongdoing.
Possible · Within months
Open Questions
- What specific management and oversight failures did the Federal Reserve's inspector general identify in the renovation project?
- Will the independent audit requested by Fed Chairman Kevin Warsh uncover evidence that could lead to future action?
- How will the ongoing tension between President Trump and Jerome Powell affect Federal Reserve independence moving forward?
