DOJ says it will not reopen Powell probe as Fed renovation oversight continues

The Justice Department is not reopening its criminal investigation into former Federal Reserve Chair Jerome Powell over the central bank's headquarters renovation, a department spokesperson told Reuters on October 2.

That position does not end scrutiny of the project. Attorney General Todd Blanche left open the possibility of an investigation if a new review produces evidence of criminal wrongdoing, Reuters reported, citing his comments to Bloomberg News.

Powell remains a Fed governor after leaving the chairmanship in May. Reuters also reported that his successor, Kevin Warsh, said on October 1 that he would hire an independent auditor to examine the project's costs. The Fed had no immediate comment on Blanche's statements, according to the news agency.

Criminal findings and management findings differ

The inspector general's report, dated September 29, says its evaluation found no reasonable grounds for a criminal referral and did not identify administrative misconduct. It records that the earlier criminal probe was closed on April 24 while the inspector general's inquiry continued.

The watchdog nevertheless found ineffective contract management and insufficient internal project oversight. Those conclusions support corrective action without establishing that Powell or another official committed a crime.

The Board agreed with the report's seven recommendations. The inspector general plans quarterly follow-ups to assess whether they have been addressed; agreement with recommendations is not the same as completing them.

Keep the renovation cost measures separate

The report puts the approved project budget at $2.381 billion in December 2024, up from $1.317 billion in February 2020. Within that total, the construction budget rose from $921 million to $2.018 billion. These are different measures of the same project, not amounts to add together.

The October 2 development clarifies the Justice Department's current position, rather than announcing a new decision to close an active case. For readers following Fed governance, the remaining questions concern the additional audit and implementation of the watchdog's recommendations. Neither the report nor the department's statement establishes a change in interest-rate policy.