DOJ Declines to Reopen Powell Renovation Probe

Published: 03 October 2026. The English Chronicle Desk. The English Chronicle Online

The US Department of Justice has decided not to reopen a criminal investigation into former Federal Reserve Chair Jerome Powell over cost overruns associated with the renovation of the central bank’s historic buildings, bringing a fresh measure of clarity to a dispute that has drawn intense political and financial attention.

A Justice Department spokesperson confirmed that the department would not restart the criminal probe into Powell. Attorney General Todd Blanche, however, indicated that scrutiny of the renovation project could continue if a new review uncovers evidence of criminal wrongdoing.

The decision follows a recent report from the Federal Reserve’s independent inspector general that found no grounds for a criminal referral and no evidence of administrative misconduct connected to the cost overruns. The watchdog nevertheless identified significant weaknesses in the management and oversight of the project.

The renovation of the Federal Reserve’s historic buildings has become a politically sensitive issue, particularly because former President Donald Trump has repeatedly criticised Powell and used the project’s rising costs as part of his broader criticism of the former Fed chair.

The Federal Reserve’s inspector general examined the management of the renovation project and the costs associated with work on the Eccles Building and the 1951 Constitution Avenue Building in Washington. The watchdog’s September report found shortcomings in project oversight but did not conclude that Powell or other officials had committed criminal or administrative misconduct.

The project was originally approved by the Federal Reserve Board in 2017. The central bank has said the work involves comprehensive modernisation of two historic buildings constructed in the 1930s, including structural repairs, replacement of ageing systems and measures to address safety and environmental concerns.

According to the Federal Reserve’s own information, the renovation has included work involving electrical, plumbing, heating, ventilation and air-conditioning systems, as well as fire detection and suppression systems. The project also involves removing hazardous materials such as asbestos and lead and bringing the buildings into compliance with modern safety, accessibility and security standards.

The cost of the project has risen substantially during its development, attracting scrutiny from lawmakers, officials and critics of the Federal Reserve. The inspector general’s review focused on the Board’s management of the project and the construction costs rather than finding evidence of criminal conduct. Its findings therefore distinguished between management deficiencies and behaviour that could warrant criminal prosecution.

That distinction is central to the Justice Department’s latest position. Blanche said the department was not reopening the criminal investigation at this stage, but he left open the possibility of further action if additional evidence emerges from continuing examination of the project’s oversight.

The development follows months of tension surrounding Powell and the Federal Reserve. Earlier in 2026, the Justice Department had pursued questions relating to the renovation project, while Powell argued that the investigation was connected to broader pressure on the central bank over monetary policy. In a statement issued in January, Powell said the matter should not be viewed solely as an investigation into the renovation and expressed concern about political pressure on the Federal Reserve’s independence.

Powell stepped down as Federal Reserve chair in May but remained a member of the Board of Governors. His successor, Kevin Warsh, has now indicated that the central bank will undertake an additional independent review of the renovation costs.

Warsh said the independent auditor would examine the project’s expenses to verify their accuracy and compliance. The review could provide another layer of scrutiny after the inspector general’s assessment and could become significant if questions remain over how the renovation was planned, contracted and monitored.

The new review is also important because the inspector general identified weaknesses in oversight. The watchdog’s report found that project management and cost controls were not as effective as they should have been, even though it did not find evidence supporting criminal charges.

The Federal Reserve has previously defended the scale and purpose of the renovation. It has said the buildings required extensive modernisation because they had not undergone comprehensive renovation since their construction in the 1930s. The central bank has also argued that the work is intended to consolidate operations, improve efficiency and preserve historic properties while addressing serious structural and safety requirements.

The dispute has nevertheless become intertwined with the wider debate over the independence of the Federal Reserve. Trump has been a vocal critic of Powell and has repeatedly pushed for lower interest rates during his presidency. The renovation controversy has provided another point of conflict between the White House and the former Fed chair.

Powell’s position at the central bank also means that the issue has consequences beyond his former role as chair. Although he no longer leads the institution, his continued service as a governor means that developments involving the renovation investigation remain relevant to the Federal Reserve’s leadership and institutional reputation.

At his final news conference as chair in April, Powell indicated that he intended to remain on the Board until the investigation into the renovation project had reached a transparent and definitive conclusion. His continued presence has allowed him to remain involved in the central bank while the various reviews and investigations have proceeded.

The Justice Department’s decision not to reopen the criminal investigation therefore does not mean that every question surrounding the renovation has been settled. The inspector general’s findings have identified management problems, while Warsh’s decision to commission an independent audit indicates that the Federal Reserve itself wants further verification of the project’s financial records and compliance.

The distinction between criminal wrongdoing and administrative or management shortcomings is likely to remain important in the coming months. A project can face serious oversight problems without necessarily providing evidence sufficient for criminal prosecution, and the inspector general’s report has effectively drawn that line in its assessment.

Blanche’s comments also leave the possibility of renewed scrutiny if the independent review produces evidence that changes the picture. For now, however, the Justice Department is not reopening its criminal investigation into Powell.

The development could reduce one source of uncertainty surrounding the former Fed chair, although political criticism of the renovation project is unlikely to disappear. Trump’s criticism and the broader debate over the Federal Reserve’s independence have ensured that the issue remains politically charged.

For the Federal Reserve, the immediate focus is likely to shift toward the independent audit and the implementation of recommendations arising from the inspector general’s report. The central bank will also have to demonstrate that lessons from the renovation project are being applied to its financial controls and oversight procedures.

The episode illustrates the scrutiny faced by major public institutions when large infrastructure projects experience significant cost increases. It also demonstrates how questions over spending and management can become intertwined with wider political disputes, particularly when they involve an institution as influential as the US central bank.

For Powell, the Justice Department’s latest decision means the criminal investigation will not be reopened on the basis of the existing information. But with a new independent audit underway and the possibility of further action if new evidence emerges, the broader controversy surrounding the Federal Reserve’s renovation project has not yet completely ended.

The central issue now is whether the additional review will reinforce the inspector general’s conclusion that the problems were primarily matters of oversight and management, or uncover information that prompts authorities to reconsider the matter. Until that process is complete, the renovation project will remain under scrutiny even as the Justice Department leaves its criminal investigation closed for now.