DOJ Won't Reopen Powell Criminal Probe, but Audit Leaves Door Open
The U.S. Justice Department will not reopen a criminal investigation into former Federal Reserve Chair Jerome Powell over cost overruns on the central bank's building renovation, a department spokesperson said on Oct. 2, 2026. The Guardian
Attorney General Todd Blanche said he has not ruled out continued scrutiny of the renovation's oversight and possible action if evidence of wrongdoing appears. He said the department could investigate if a new review finds evidence of a crime. No new probe is open.
What the watchdog found
The statements followed findings by the Federal Reserve's inspector general, the internal watchdog. It found no basis for a criminal referral on the cost overruns and no evidence of administrative misconduct tied to the project. It concluded oversight of the renovation was lax.
Those terms have specific meanings. A criminal referral needs a legal basis to bring charges. Administrative misconduct concerns staff rules and internal controls. Lax oversight means poor management, without a finding that anyone broke the law. The department declined charges on the current record, while keeping the option open if new evidence emerges.
The renovation cost more than doubled, according to reporting on the project. CNBC Federal Reserve Chair Kevin Warsh said he will hire an independent auditor to "verify accuracy and compliance" for all project costs. Blanche tied any future Justice Department action to what that review finds.
What comes next
Powell stepped down as Fed chair in May but stayed on as a governor. At his final press conference as chair in April, he said he would not leave the board until the investigation is "well and truly over, with transparency and finality." After the inspector general's lax-oversight finding, Donald Trump made a fresh call for Powell to resign.
The broader context here is that the legal question has narrowed into an accounting question. The independent audit will check paperwork, change orders, approvals and cost controls across the multiyear project. Whether it settles the factual disputes will depend on how broad its mandate is and how much access to records it gets, since an inspector general review only summarizes these issues by design.
In my view, Powell staying on the Board keeps both the institutional and political stakes high. He ties his departure to transparency and finality. The administration ties further scrutiny to the coming audit. That leaves a clear next trigger. If the auditor finds unsupported costs or compliance failures pointing to a possible crime, Blanche has said the department could act. If it finds poor management but nothing unlawful, the fight stays in Congress, oversight hearings and public debate, not in court.
