Sen. Elizabeth Warren (D-MA) is brushing aside the Justice Department’s move Friday to drop its investigation into Federal Reserve Chairman Jerome Powell, arguing that it is merely to get President Donald Trump’s replacement confirmed, and that a “scheme to take over the Fed” is still in place.
Warren, who is the ranking member on the Senate Banking, Housing, and Urban Affairs Committee, has long accused Trump of working to directly influence monetary policy. She said on Friday that Trump’s nominee for Fed chairman, Kevin Warsh, would be a tool for Trump to control interest rates.
DOJ DROPS INVESTIGATION INTO JEROME POWELL, CLEARING WAY FOR TRUMP FED PICK KEVIN WARSH
“This is just an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair,” she said in a Friday statement. “Let’s be clear what the Justice Department announced today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor Cook.”
Warren referenced Lisa Cook, a Fed governor whom Trump is attempting to fire and whose fate is now in the hands of the Supreme Court.
“Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” Warren added. “The Senate should not proceed with the nomination of Kevin Warsh.”
The investigation itself was into whether Powell misled Congress about cost overruns on renovations of the Fed’s headquarters.
Sen. Thom Tillis (R-NC), a member of the banking committee, was threatening to block Trump nominee Kevin Warsh from a confirmation vote. So the DOJ announcement that it was ending its investigation into Powell should clear the way for former Fed governor Kevin Warsh to be confirmed.
“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,” U.S. Attorney Jeanine Pirro announced on Friday. “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.”
But Pirro added a key caveat in her statement: “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”
Warren and other Democrats said that the move to drop the investigation might have just been to get Tillis to vote for Warsh and then, after Warsh is confirmed, the probe can be relaunched.
Notably, Tillis had yet to release a statement on the matter as of Friday afternoon — hours after Pirro announced the move.
Other Democrats used the opportunity to slam the investigation on Friday, with some pointing out the ongoing legal battle with Cook.
“Trump wants a Fed Chair that will do his bidding,” said Sen. Andy Kim (D-NJ). “He’ll drop the bogus investigation into Powell but not Lisa Cook because it clears the path for Senate Republicans to confirm Kevin Warsh, Trump’s pick for Fed Chair.”
Sen. Alex Padilla (D-CA) said that it was “about time” that the DOJ dropped its “sham” investigation into Powell.
“But it doesn’t change the fact that this was a direct threat by Donald Trump to the Fed’s independence because Chair Powell refused to put politics over good fiscal governance,” he said on X. “This kind of political pressure erodes trust, undermines institutional credibility and risks real economic instability.”
Rep. Bill Foster (D-IL), a member of the House Committee on Financial Services, said that the DOJ ending the investigation in order to facilitate Warsh’s confirmation “proves it was never serious in the first place.”
“It was just another attack on the Fed’s independence because Jerome Powell refused to cater to Trump’s political whims,” Foster said.
Earlier this year, in a video statement, Powell announced that he was under investigation by the Justice Department for claims he made about the Fed’s headquarters renovation during congressional testimony.
The buildings at the center of the renovation, the Eccles Building and 1951 Constitution Avenue, had an estimated renovation budget of $1.9 billion in 2023. By 2025, though, those costs had ballooned to $2.5 billion. Both are located near the National Mall in Washington.
During the hearing, Powell responded to questions about the added costs, including the fact that the remodeling included opulent touches, such as special dining rooms and luxurious marble.
Sen. Tim Scott (R-SC), chairman of the Senate banking committee, later followed up with Powell in a letter, saying that the only available construction plans for the building appear to contradict some of Powell’s statements and requested further clarification.
After his testimony, some, such as Rep. Anna Paulina Luna (R-FL), went further and accused him of lying to Congress. Luna submitted a referral to then-Attorney General Pam Bondi.
TAKEAWAYS FROM KEVIN WARSH’S FED CONFIRMATION HEARING
The DOJ’s move to drop the investigation comes just days after Warsh testified before the Senate banking committee and repeatedly vowed that he would operate the Fed independently from the White House or the whims of Trump.
“Let me be very clear: Monetary policy independence is essential,” Warsh told the panel. “Monetary policy makers must act in the nation’s interest. Their decision is the product of rigor, deliberation, and unclouded decision-making.”
