The U.S. Justice Department will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell over a $2.5 billion headquarters renovation project. Although Attorney General Todd Blanche criticized Powell's lax oversight of the project's massive cost overruns, he stated that management mistakes do not constitute a crime. The decision follows a Fed inspector general report clearing Powell of criminal wrongdoing, which nevertheless prompted President Donald Trump to renew demands for Powell's immediate resignation from the Fed Board of Governors.
Justice Department's criminal investigation of Jerome Powell
- ▪Attorney General Todd Blanche said the U.S. Department of Justice will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell regarding cost overruns for the central bank's $2.5 billion building renovation project
- ▪The Department of Justice dropped its criminal probe into Jerome Powell earlier in 2026 after Republican lawmakers refused to support Donald Trump's nomination of Kevin Warsh as Federal Reserve chair until the probe was resolved
- ▪The Department of Justice previously closed its criminal investigation into Jerome Powell over the Federal Reserve's $2.5 billion renovation project in April 2026, which had become public in January 2026 following grand jury subpoenas regarding Powell's congressional testimony
Todd Blanche's statements on potential prosecution
- ▪Attorney General Todd Blanche did not rule out future Justice Department action or investigations if the Federal Reserve's new independent audit announced by Kevin Warsh uncovers evidence of criminal wrongdoing
- ▪Attorney General Todd Blanche stated on October 2, 2026, that Jerome Powell did not act appropriately regarding oversight of the Federal Reserve's $2.5 billion renovation project, but noted that making mistakes on billion-dollar projects is not necessarily a crime
Donald Trump's demands regarding Jerome Powell
- ▪President Donald Trump asked Attorney General Todd Blanche to review the Federal Reserve inspector general's findings and determine what action to take regarding Jerome Powell
- ▪President Donald Trump demanded on September 30, 2026, that Jerome Powell be forced to resign immediately from the Federal Reserve Board of Governors, citing the Federal Reserve's $2.5 billion renovation project's cost overruns
Jerome Powell's status on the Board of Governors
- ▪Jerome Powell stepped down as Federal Reserve chair in May 2026 but remains on the Board of Governors, with a term that runs through January 2028
- ▪Jerome Powell previously stated he would remain at the Federal Reserve as a governor until the Department of Justice investigation into the central bank's $2.5 billion renovation project was well and truly over with transparency and finality
Debatable claims
- ▪Presidential pressure on Fed governors threatens the central bank's independence
- ▪The Justice Department's decision not to reopen the Powell investigation is justified
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