US Attorney for the District of Columbia Jeanine Pirro on Friday announced that the Department of Justice (DOJ) is closing its criminal investigation into Federal Reserve Chair Jerome Powell, referring the matter to the inspector general.

The DOJ criminal probe focused on whether or not Powell made false statements to Congress about cost overruns in the Federal Reserve’s ongoing headquarters renovation during a Senate Banking Committee panel last June. The project in question was initially estimated to cost $1.9 billion but has since grown to an estimated $2.46 billion. In his testimony, Powell denied that the renovation included luxury features, stating, “There’s no VIP dining room. There’s no new marble. There are no special elevators. There are no new water features, there’s no beehives, and there’s no roof terrace gardens.”

Planning documents submitted to the National Capital Planning Commission in 2021 call these statements into question, with one excerpt including, “The private dining rooms on Level 4 of the Fed’s Eccles building will be restored,” and “[t]he Governors’ private elevator will be extended to discharge at the dining suite level.” Under 18 U.S. Code § 1001, it is a criminal offense to knowingly and willfully make false statements to Congress, with a penalty of up to five years imprisonment.

Powell announced in January that the central bank had been served with grand jury subpoenas. Chief Judge James Boasberg of the US District Court for the District of Columbia quashed the DOJ’s subpoenas in March, ruling that “the government has offered no evidence whatsoever that Powell committed any crime other than displeasing the president.” Judge Boasberg then denied the government’s motion for reconsideration in April.

Powell has characterized the investigation as a politically motivated pressure campaign. Former Treasury Secretary and Fed Chair Janet Yellen has likewise criticized the investigation, saying that it compromises the central bank’s independence. Supporters of the investigation, led by Representative Anna Paulina Luna of Florida, who made a criminal referral to then-Attorney General Pam Bondi last July, argue that Powell “knowingly misled both Congress and executive branch officials” and that “a top Fed official cannot be permitted to make false statements under oath at a congressional hearing.”

Friday’s announcement closes the criminal chapter of the dispute for the time being, as Pirro notes she will “not hesitate to restart a criminal investigation should the facts warrant doing so.” 

The matter now passes to the Fed’s inspector general, whose office audited the renovation project in 2021 and noted areas of recommended improvement but did not find evidence of fraud or criminal conduct. Inspector generals are independent officials within government agencies that investigate mismanagement, waste, and fraud. Friday’s announcement also removes an obstacle that had been blocking Senate confirmation of Kevin Warsh, Trump’s nominee to succeed Powell, whose term expires in May. Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, had pledged to block Warsh’s confirmation until the criminal probe was dropped, telling Warsh at his confirmation hearing this week, “Let’s get rid of this investigation so I can support your confirmation.”