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U.S. Attorney for the District of Columbia Jeanine Pirro announced Friday that she has directed her office to conclude its investigation into the Federal Reserve over a construction project, a move that could lead to a major delay in the Senate voting to move forward now. That of President Donald Trump candidate for Fed chairman.
Pirro said the Fed’s inspector general, Michael Horowitz, would take over the investigation and transfer it from the hands of federal prosecutors to those of a longtime government watchdog. The move eases pressure on the central bank amid a fight over an expected leadership change in mid-May, when Fed Chairman Jerome Powell’s term ends.
Retiring Sen. Thom Tillis, R-N.C., had threatened to block Kevin Warsh, Trump’s successor to Powell, over the Justice Department investigation.
“This morning, the Federal Reserve Inspector General was asked to scrutinize construction cost overruns – in the billions of dollars – borne by taxpayers,” Pirro wrote on skills.”
DOJ’S CRIMINAL PROBE OF FED CHAIR POWELL LEADS RARE GOP REVOLT ON CAPITOL HILL
The United States Attorney for Washington, DC, Jeanine Pirro, holds a press conference in Washington, DC on August 12, 2025. (Win McNamee/Getty Images/Getty Images)
“Accordingly, I have instructed my office to conclude our investigation as the IG undertakes this investigation,” Pirro said, adding that she “would not hesitate” to reopen a criminal investigation “should the facts warrant it.”
Pirro’s comments come after powell revealed in a video announcement in january that the Ministry of Justice had opened an investigation into the Fed, calling it an unprecedented attempt to force it to cut rates through “intimidation.”
White House Press Secretary Karoline Leavitt emphasized to reporters on Friday that the case is not over and “is merely being turned over to the Inspector General, who has critical tools to continue investigating financial mismanagement at the Fed.”
Leavitt added that the Fed’s renovations “have been going on for a long time.” It’s costing taxpayers billions of dollars, and I think it’s in the taxpayer’s best interest to get to the bottom of this. So the investigation is still continuing. It just falls under a different authority.”
The DOJ investigation had hit a significant roadblock after Judge James Boasberg, chief judge of the federal district court in Washington, DC, blocked the department from subpoenaing the Fed.
POWELL SAYS HE ‘NOT INTENDING TO LEAVE’ FED DURING DOJ INVESTIGATION
U.S. President Donald Trump ends the ceremony after announcing Jerome Powell as the nominee for chairman of the Federal Reserve in the Rose Garden of the White House in Washington, DC, November 2, 2017. (Saul Loeb/AFP via Getty Images/Getty Images)
Leading up to the investigation, the relationship between Trump and Powell had become increasingly rocky as Trump grew frustrated with interest rates and began to target Powell, whom he nominated in 2017. Trump called Powell a “fool” and demanded in March that he cut interest rates “immediately.”
Tillis, who has a background in finance and serves on the Senate Banking Committee, had vowed to block Kevin Warsh’s confirmation over the DOJ investigation after Trump nominated Warsh to replace Powell, whose term was set to expire on May 15.
Tillis had argued that the DOJ investigation was political and would improperly distort markets, and he accused Pirro of seeking “brownie points” from Trump by opening it. “It’s not cute,” Tillis had said during a television interview in February.
During his confirmation hearing this week, Tillis told Warsh, who previously served on the Fed’s Board of Governors, that he had “extraordinary credentials” but that he could not vote to advance his Senate nomination until the DOJ concluded its investigation.
Michael Horowitz testifies before the House Select Subcommittee on the Coronavirus Crisis at the Rayburn House Office Building on June 14, 2022 in Washington, DC. (Joe Raedle/Getty Images/Getty Images)
Horowitz, who will now investigate the Fed’s building renovation costs, received a mix of praise and criticism from Republicans when he served as Justice Department inspector general for more than a decade. He was one of a handful of high-profile inspectors general spared during Trump’s historic cull of government watchdogs last year and has found an ally in key figures like House Judiciary Committee Chairman Jim Jordan, R-Ohio.
Horowitz became known in part for his investigation into the Trump 2016 campaign’s ties to Russia by the FBI. He found in 2019 that the agency had made “significant errors or omissions” in seeking court approval for Foreign Intelligence Surveillance Act warrants, a finding that sparked widespread demands for FISA reforms that remain a source of controversy. on Capitol Hill to this day.
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Still, some in Trump’s base were disappointed when Horowitz released a long-awaited report in 2024 that found that while the FBI had about 20 sources in D.C. during the Jan. 6 Capitol breach, the bureau did not direct any of them to enter the Capitol or otherwise break the law, debunking a theory that federal authorities had helped incite the riot.
Horowitz left the DOJ last year after Powell appointed him to oversee the Fed and Consumer Financial Protection Bureau.
