(WASHINGTON) — The Department of Justice is expected to drop its criminal investigation into Federal Reserve Chair Jerome Powell as soon as Friday, ending a standoff that threatened to delay the confirmation of Powell’s successor at the central bank, multiple sources familiar with the matter told ABC News.
Senior DOJ officials have contacted senators in recent days, including Republican Sen. Thom Tillis. who sits on the Senate Banking Committee, informing them of the plan to drop the probe and refer the matter regarding alleged cost overruns at the Fed’s Washington headquarters to the bank’s internal watchdog, the sources said.
The Fed’s independent inspector general conducted an audit of the building renovation costs in 2021 and Powell had already asked the watchdog to take a fresh look at the $2.5 billion project last year.
Powell’s term ends next month, but he said in March that he would stay in the position until President Donald Trump’s pick to lead the Fed, Kevin Warsh, is confirmed.
A spokesperson for the Federal Reserve declined to comment. Reached by ABC News, a spokesperson for Tillis declined to comment.
A Justice Department spokesperson did not immediately respond to a request for comment from ABC News.
District of Columbia U.S. Attorney Jeanine Pirro has been insistent that her investigation of alleged cost overruns at the Fed would continue despite a ruling last month from D.C. District Judge James Boasberg that tossed out subpoenas she had sent to Powell.
“This investigation continues. I am in the legal lane. There are others who are in the political lane. I don’t intersect those two lanes,” Pirro said in a news conference on Wednesday.
“I am going forward,” Pirro said. “We are appealing the decision of Judge Boasberg — the idea that a judge can stand at the door of a grand jury and tell a prosecutor you’re not allowed to go in when the United States Supreme Court has said you can go into a grand jury based on rumors and suspicion, is an order that we think must be appealed, and we are continuing in this investigation.”
At the time of Boasberg’s ruling, Tillis urged Pirro not to continue with her investigation.
“We all know how this is going to end and the D.C. U.S. Attorney’s Office should save itself further embarrassment and move on,” Tillis said in a post on X moments after the decision was made public in March. “Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.”
It is not immediately clear if prosecutors will seek to drop their appeal of Boasberg’s order as a result of the directive to close the probe into Powell.
In a video message in January, Powell revealed the investigation and called it an attempt by the Trump administration to put political pressure on the Fed to lower interest rates.
An end to the DOJ’s investigation is expected to pave the path for Kevin Warsh, to get confirmed through the Senate. Tillis told ABC News on Tuesday he supports Kevin Warsh as the nominee but will not advance his nomination until the DOJ’s probe is dropped.
Tillis first announced in January that he would block nominees in opposition to the investigation which has been branded as “weak” and “frivolous.”
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis said in a January statement. “I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved.”
Tillis’ blockade has proved difficult for Senate Republican leadership to work around because of his position on the narrowly divided Senate Banking Committee. His opposition, paired with that of all Democrats on the panel, has made it impossible for Warsh to advance out of the committee to a vote on the full Senate floor.
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