The criminal probe by the Department of Justice regarding Federal Reserve Chair Jerome Powell has been “temporarily paused,” according to a letter sent to the department on Friday by two Democratic senators, which was first obtained by CNBC.
“Your announcement effectively leaves open the possibility for you to revive the criminal inquiry into Chair Powell — or initiate unfounded investigations into Powell or other Fed Governors and a future Fed Chair — if it becomes politically advantageous for you,” Senators Elizabeth Warren, D-Mass., and Dick Durbin, D-Ill., stated in the communication directed to U.S. Attorney for the District of Columbia Jeanine Pirro.
Pirro mentioned in a Friday statement that the Fed’s inspector general had been requested to assess cost overruns related to a renovation project. She did not clarify who initiated the request. Last year, Powell had asked the inspector general to investigate the matter.
“I have instructed my office to conclude our investigation while the IG conducts this inquiry,” Pirro stated. “However, be assured that I retain the ability to resume a criminal investigation if the factual basis necessitates it.”
Pirro’s office did not respond promptly to a request for comments.
The Fed declined earlier on Friday to comment on Pirro’s verdict. Powell mentioned in January that he had received subpoenas from Pirro’s office, which he condemned as a pretext, asserting that the Trump administration was unhappy with him for not rapidly and significantly lowering interest rates beyond what the Fed deemed justified.
Prosecutors from Pirro’s office informed a judge in March that they lacked specific evidence of any misconduct. Consequently, the judge moved to quash Pirro’s subpoenas. Appellate attorneys indicated to CNBC that an appeal would prove challenging.
The senators’ letter examines the possible political motives behind the investigation. “From your standpoint, what types of ‘facts’ would justify resuming the investigation?” Warren and Durbin inquire.
They also question Pirro if President Donald Trump or other officials within the administration were informed about the decision to suspend the investigation. They seek details regarding the request made to the Fed’s inspector general.
Scott Alvarez, a former general counsel for the Fed, commented earlier on Friday that the institution likely sought clarification from Pirro about similar matters.
“What kind of facts would prompt her to reopen the investigation when she initially launched it without any factual basis?” he articulated.
Warren expressed earlier on Friday her belief that the Senate should proceed with the confirmation of Kevin Warsh, Trump’s appointee to take over Powell’s position. Warsh testified before the Senate Banking Committee on Tuesday. A Republican member of the committee, Sen. Thom Tillis of North Carolina, has committed to blocking the nomination while the investigation is ongoing.
Tillis has yet to comment on Pirro’s ruling.
