DOJ Affirms Closure of Criminal Probe into Former Fed Chair Powell Amid Renovation Cost Controversy

The U.S. Department of Justice (DOJ) has officially confirmed it will not be reopening its criminal investigation into former Federal Reserve Chair Jerome Powell. The probe focused on the central bank's multi-billion dollar headquarters renovation, which had significantly exceeded its budget, a department spokesperson informed CNBC.

Attorney General Todd Blanche stated in a Friday interview with Bloomberg, "We're not reopening a criminal investigation into him." However, Blanche did not rule out the possibility of separate Justice Department actions related to the renovation, suggesting an independent audit of the project could trigger an investigation if it uncovers evidence of criminal wrongdoing.

These comments follow a recent report from the Federal Reserve's inspector general. While the watchdog found no reasonable grounds to believe a federal crime had occurred, thus not requiring a referral to the attorney general, it severely criticized the central bank for major management and oversight failures that contributed to the project's ballooning costs.

Former President Donald Trump, a vocal critic of Powell, sharply condemned the DOJ's decision. In a Truth Social post on Wednesday following the news, Trump asserted that Powell should be "forced to resign" from the central bank's Board of Governors "at a minimum." He further added, "He can't manage a Building, and he certainly shouldn't be allowed to manage his High Interest Rate Policy (only on 'TRUMP!')."

The Justice Department had initially launched its investigation into the renovation in January, issuing grand jury subpoenas for related records. However, a federal judge quashed these subpoenas in March, deeming them issued for an improper purpose and noting the government's lack of substantial evidence against Powell. The DOJ disputed this ruling but ultimately closed its investigation rather than pursuing an appeal.

Fed Chairman Kevin Warsh, who succeeded Powell in May, has pledged that the central bank will engage an independent auditor and enhance oversight for the project moving forward. Powell continues to serve on the Fed's Board of Governors, with his term extending through January 31, 2028. Trump has persistently urged Powell to relinquish his board position, stemming from years of policy disagreements, particularly concerning interest rates.