DOJ Drops Fed Probe, Clearing Path for Warsh Nomination in Senate

DOJ Shifts Investigation Approach, Fed Review Goes Internal

On April 25, U.S. Attorney Janina Polo announced the Department of Justice is closing its criminal investigation into cost overruns on the Federal Reserve's office renovation project. This decision follows the Fed's commitment to launch an internal review process.

Political Analysis: Paving Way for Crucial Nomination

Observers in Washington note the timing of the DOJ's move carries significant implications. With President Trump's nominee for the next Fed chair, Kevin Warsh, awaiting Senate confirmation, removing the cloud of a criminal probe is seen as boosting his confirmation prospects substantially.

• The Fed's Inspector General will lead the internal review, focusing on billions in construction cost overruns
• Prosecutor Polo emphasized that internal findings should "adequately address the issues"
• The DOJ retains the right to reopen the criminal investigation if circumstances warrant

This development comes at a critical juncture for Federal Reserve leadership transition, with all eyes now on the Senate's response to the nomination.