DOJ Will Not Reopen Criminal Probe Into Powell Over Fed Building Costs

The U.S. Justice Department has confirmed it will not reopen a criminal investigation into former Federal Reserve Chair Jerome Powell over massive cost overruns related to the central bank’s building renovation project. Attorney General Todd Blanche made the announcement during an exclusive interview with Bloomberg on Friday, though he did not completely rule out future scrutiny of the project’s oversight.

Blanche’s decision follows a report released this week by the Fed’s Office of Inspector General that cleared Powell of criminal wrongdoing connected to the $2.4 billion renovation project. The project had been initially budgeted at $1.3 billion in 2020, but surging costs drew sharp criticism from Republican lawmakers and President Donald Trump.

“We’re not reopening a criminal investigation into him,” Blanche said in an exclusive interview with Bloomberg Friday.

While the Attorney General stated he was satisfied with the inspector general’s findings, he expressed concern that Powell had not appropriately overseen the massive construction undertaking. The report identified a series of missteps that contributed to the dramatic cost increases, though it stopped short of finding evidence of criminal activity by the former Fed chair.

Future Audits Could Trigger New Investigations

Blanche emphasized that the door remains open for potential criminal investigations if new evidence surfaces during future auditing processes. The Federal Reserve has committed to engaging an independent auditor to scrutinize the building costs, and the Justice Department stands ready to act if that review uncovers wrongdoing.

“I expect there will be an auditing process,” Blanche said. “If they learn anything that rises to any kind of criminal misconduct, you better believe we’re going to investigate that.”

The Attorney General’s cautious approach reflects the political sensitivity surrounding the renovation project, which has become a flashpoint in the ongoing tensions between the Trump administration and the Federal Reserve. The project drew ongoing criticism from President Trump and Republican lawmakers, who accused the Fed of overspending and pursuing extravagant designs under Powell’s leadership.

Those accusations eventually led to a formal criminal investigation into Powell over his handling of the project, though U.S. Attorney for the District of Columbia Jeanine Pirro said in April that she had instructed her office to drop the inquiry after lawmakers from both parties objected to the probe.

Trump Calls for Powell’s Resignation Over Inspector General Findings

Despite the inspector general’s conclusion that no criminal wrongdoing occurred, President Trump called this week for Powell to resign from the Fed board over the report’s findings. The president took to social media Wednesday to escalate his attacks on the former Fed chair, suggesting legal action if Powell refuses to step down.

“If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable,” Trump posted on social media Wednesday.

Trump’s public criticism of Powell has intensified since the president returned to the White House last year, marking a continuation of their contentious relationship during Trump’s previous term. Powell left the chair role in May but remains on the Fed board, a position that has kept him in the administration’s crosshairs.

While Powell served as chair, Trump repeatedly called for more aggressive rate cuts, arguing the Federal Reserve should act to boost housing affordability and ease government borrowing costs. The president’s ongoing feud with Powell represents one of the most public conflicts between a sitting president and the traditionally independent central bank in modern American history.

Pirro’s Office Reviews Inspector General Report

Pirro’s office confirmed it is currently in the process of reviewing the 121-page report produced by the Fed’s Office of Inspector General. The comprehensive document details the series of decisions and oversights that contributed to the dramatic cost escalation, providing a detailed timeline of the renovation project’s troubled development.

The bipartisan objections to the initial criminal probe highlighted the sensitive nature of investigating a Federal Reserve chair, particularly over matters of administrative oversight rather than personal corruption or malfeasance. The independence of the Federal Reserve from political interference has long been considered a cornerstone of American monetary policy, making criminal investigations into Fed leadership exceptionally rare.

Fed Commits to Independent Audit

In response to the controversy, the Federal Reserve has pledged to engage an independent auditor to conduct a thorough examination of the building costs and project management decisions. This commitment to external scrutiny represents an attempt by the central bank to restore confidence in its stewardship of public resources and address concerns raised by lawmakers and the Trump administration.

The independent audit will likely focus on the decision-making processes that led to the cost overruns, examining whether appropriate controls were in place and whether alternative approaches could have contained expenses. The results of this audit could prove crucial in determining whether any further investigations or administrative actions are warranted.

Blanche’s comments suggest the Justice Department will monitor the audit’s progress closely and stands ready to intervene if evidence of criminal misconduct emerges. The Attorney General’s careful positioning allows the DOJ to avoid immediate political entanglement while preserving the option to act if the independent review uncovers serious wrongdoing.

The renovation project controversy underscores broader tensions over government spending and accountability, particularly regarding agencies that maintain significant operational independence from direct executive control. As the independent audit moves forward, both the Federal Reserve and the Justice Department will face continued scrutiny over their handling of the expensive renovation and its aftermath.