DOJ to close investigation into Fed Chair Powell, US attorney says

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WASHINGTON – The Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell, U.S. Attorney Jeanine Pirro said on Friday, removing an obstacle to the confirmation of Kevin Warsh, President Donald Trump‘s pick to lead the central bank.

Pirro, a Trump ally and the top federal prosecutor in Washington, D.C., said she had instead asked the Fed’s internal watchdog, the Office of Inspector General, to examine cost overruns in renovations of the central bank’s Washington headquarters.

“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in a social media post. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”

The criminal investigation into Powell had stalled Warsh’s confirmation after a Republican senator, Thom Tillis of North Carolina, vowed to block all Fed nominees until the DOJ ended what he called a baseless investigation.

The Powell probe, which had been examining the renovation and Powell’s statements to Congress last year about the project, became the latest flashpoint in the Justice Department’s pursuit of adversaries and critics of Trump.

A federal judge last month blocked subpoenas to the Fed’s Board of Governors, finding they were issued for the improper purpose of pressuring Powell to cave to Trump’s demands to rapidly lower interest rates or resign.

As recently as this week, Pirro had vowed to appeal the ruling and continue the investigation.

A spokesperson for the Fed declined to comment. A White House spokesperson said the inspector general was best positioned “to get to the bottom of the matter” and said it was confident the Senate would confirm Warsh.

Reporting by Ryan Patrick Jones and Doina Chiacu; editing by Katharine Jackson and Andrea Ricci.

This story has been updated.