US Department of Justice drops probe into Fed chair Jerome Powell
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The news: The US Department of Justice has dropped its criminal investigation into chair of the Federal Reserve, Jerome Powell, over the Fed’s building renovation costs, paving the way for the confirmation of Kevin Warsh, US President Donald Trump’s appointee as next leader of the Fed.
The context: In a social media post shared on Friday, US attorney Jeanine Pirro said that the Federal Inspector General has been asked to examine the costings, with a report on the findings expected soon.
“I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro wrote. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”
Pirro had initiated a legal battle to serve subpoenas to the Fed as part of the investigation which was examining whether Powell gave false testimony to Congress last summer about the central bank’s building-renovation project. In March US district judge James Boasberg ruled that the subpoenas were improper and that the government had produced “essentially zero evidence” that Powell had committed a crime.
The move could remove remaining obstacles facing Warsh’s confirmation through a majority in the Senate, as some Republican senators including Thom Tillis, had vowed to block Warsh’s nomination until the criminal probe into Powell was dropped. Powell’s term as Fed chair is due to end on 15 May.
The White House said in a statement to Bloomberg that “American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter.”
The sources: US Attorney Jeanine Pirro, Bloomberg, WSJ, FT
