WASHINGTON — The Department of Justice is dropping its criminal investigation of Federal Reserve Chairman Jerome Powell over costly building renovations at the central bank’s headquarters in the nation’s capital.
DC US Attorney Jeanine Pirro announced Friday that the Fed’s inspector general instead “has been asked to scrutinize the building costs overruns — in the billions of dollars — that have been borne by taxpayers.”
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”
“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” she added, warning she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
In January, Pirro’s office fired off subpoenas to Powell over statements he made to Congress about the $2.5 billion renovations at the Fed.
Plans for the lavish amenities included rooftop garden terraces and Italian beehives, The Post first reported last year.
Those subpoenas were blocked by a federal judge last month.
DC’s top federal prosecutor launched the probe in January in response to Powell’s denials before the Senate Banking Committee last year that the lavish upgrades were pushing the project over budget.
“There’s no VIP dining room, there’s no new marble. There are no special elevators,” Powell testified. “There are no new water features, there’s no beehives, and there’s no roof terrace gardens.”
In a video statement on Jan. 11 revealing that he was under investigation, Powell said: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
President Trump donned a hard hat to tour the renovations this past July and told reporters that, as a former real estate developer himself, he wasn’t afraid to fire Powell for running over budget.
The president has repeatedly demanded that Powell cut interest rates during Trump’s second term — threatening on multiple occasions to fire the Fed chair for not doing so.
The central bank has been in the red for years, with operating losses standing at a whopping $233 billion between 2022 — the year after the renovation project was approved — and 2025.
Both Senate Banking Committee Chairman Tim Scott (R-SC) and an ex-Fed official dubbed the vanity project a “Palace of Versailles” on the National Mall.
The Fed has two complexes, the Eccles Building and the adjacent Federal Reserve Board East Building, both of which are being renovated by the French-born Philadelphia architect Paul Cret.
Planning documents reference Georgian white marble, skylights, ornate water features, and a state-of-the-art elevator that descends into a VIP dining suite — as well as a private art collection in the basement.
The project was projected to cost around $1.9 billion in 2019, but that figure has since ballooned by 32%. The work is scheduled for completion in 2027.
Powell’s term as Fed chair ends May 15, but his nominated successor, Kevin Warsh, had been blocked from consideration by Banking Committee member Sen. Thom Tillis (R-NC) in protest of the DOJ’s criminal probe.
“American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter,” White House spokesman Kush Desai said in a statement.
“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making.”
Reps for Tillis’ office didn’t immediately respond to a request for comment.
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