DOJ Closes Powell Probe Despite Fed Renovation Cost Criticism

The Justice Department has decided not to reopen its criminal investigation into former Federal Reserve Chair Jerome Powell regarding the troubled renovation of the central bank’s headquarters. Attorney General Todd Blanche made the announcement on Friday, citing a 120-page inspector general report that found no evidence of criminal wrongdoing, although it heavily criticized the Fed’s management of the project.

The renovation of two historic Fed buildings has ballooned to approximately $2.4 billion. The inspector general’s report highlighted the Fed’s failure to establish an effective guaranteed maximum price and its repeated deviations from contract provisions meant to control costs. The report also noted that luxury features like marble, water installations, and a garden terrace did not significantly contribute to the cost overruns.

The Justice Department initially launched a criminal investigation earlier this year, partly focusing on Powell’s June 2025 congressional testimony about the renovation, but closed it in April. President Donald Trump had urged Blanche to review the inspector general’s findings to determine if further action was necessary. Powell, who stepped down as Fed chair in May, remains a member of the Federal Reserve Board.

The matter may not be entirely resolved. Blanche indicated that the DOJ could revisit the issue if new evidence of criminal wrongdoing emerges from an independent audit ordered by Powell’s successor, Fed Chairman Kevin Warsh. Warsh has also brought in the General Services Administration to oversee the project, with the audit set to examine costs and verify whether the Fed paid for services it did not receive.