The US Justice Department has ended a controversial investigation into building-renovation cost overruns by the Federal Reserve, potentially clearing the way for Kevin Warsh, President Trump's nominee to replace Jerome Powell as Fed chair, to be confirmed.
Investigation Closure
US attorney Jeanine Pirro announced on social media Friday that the Fed inspector general had been asked to examine the cost overruns. She expects a report on the findings soon. "I have directed my office to close our investigation as the inspector general undertakes this inquiry," Pirro stated. "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 subpoena the central bank as part of a criminal probe into the cost overruns and congressional testimony provided by Powell.
White House and GOP Support
The White House issued a statement saying, "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." Warsh, who appeared before the Senate Banking Committee this week, enjoys broad support among Republican lawmakers. However, key GOP Senator Thom Tillis of North Carolina had vowed to block his confirmation unless the Justice Department investigation was dropped.
Abrupt Reversal
The reversal was abrupt, as Pirro had earlier this week stated her commitment to continuing the investigation. Her office did not respond to questions about what changed. Justice Department leaders had also supported Pirro as a matter of principle to challenge a ruling that undermines prosecutors' ability to use grand juries during early investigation stages.
Legal Background
US District Chief Judge James Boasberg quashed two grand jury subpoenas that Pirro's office served in January. Pirro had said she would appeal the ruling. The investigation had thrown the Federal Reserve's leadership transition into chaos, with Powell's term scheduled to end on May 15.
