Justice Department rules out reopening its criminal case against Powell

Attorney General Todd Blanche said on Friday that the Justice Department would not reopen its criminal investigation of former Federal Reserve chair Jerome Powell, the Wall Street Journal reported¹. The Washington Examiner carried the same account of Blanche’s remarks³. Anadolu Agency reported that Blanche said “We’re not reopening a criminal investigation”, and that the matter concerned cost overruns related to the central bank’s building renovation project⁴. Axios described the closed inquiry as covering the central bank’s costly renovation⁶. Forex Factory reported the decision in the same terms, tying it to the renovation rather than to any monetary policy question⁷.

The Guardian’s report used the phrase “well and truly over” to describe the investigation, in an excerpt that is cut off before the speaker is identified². None of the available excerpts sets out what prompted the department to decide against a second look, or whether any civil or administrative review of the renovation continues^1,2,6.

Why it matters to investors

Powell is still inside the central bank. US News reported that he has remained at the Fed as a governor since stepping down as chair in May⁵. The decision therefore lifts a criminal threat from a serving member of the Board of Governors, not from a private citizen^1,5.

The case arose from a construction budget rather than from an interest rate decision^4,6. That is the part worth holding on to: an inquiry opened over renovation costs reached a sitting governor, and has now been dropped by the same department that opened it^1,4,7. The sources here report no statement from Powell himself, and none from the Fed as an institution, on the decision^1,2,3,4,5.

What to watch

The first question is whether Powell now serves out his term as governor. US News noted that his successor as chair, Kevin Warsh, spoke on Thursday, although the excerpt available does not carry what he said⁵.

The second is whether the decision is final in substance as well as in wording. Forex Factory and Axios both present it as the end of the department’s interest in the renovation^6,7, while the Wall Street Journal and the Washington Examiner report the decision itself without any stated condition attached to it^1,3. Anadolu’s quotation is narrow, covering the criminal investigation specifically⁴. On the evidence in these reports, the overhang on the Fed’s board has been removed by prosecutorial discretion rather than by a finding on the facts of the renovation^1,2,4.