The Justice Department has declined to reopen a criminal investigation into former Federal Reserve chair Jerome Powell over cost overruns tied to the central bank's headquarters renovation—meaning the man who presided over the inflation crisis that hammered working Americans won't face criminal scrutiny for billions in mismanaged spending either.
An inspector general report released Wednesday found no grounds for a criminal referral and no evidence of administrative misconduct. But here's what it did find: the Fed's renovation project was so inadequately supervised that top officials—including Powell—avoided accountability entirely. The financial press treated this as vindication. It isn't. "You can't pin the blame on top officials because they didn't actually supervise things" is plausible deniability, not exoneration—unless you think negligence is the same as innocence.
Attorney General Todd Blanche told Bloomberg News he has not ruled out continuing to look into the project's oversight and could take action if evidence of wrongdoing emerges. But that's a conveniently open door with no one walking through it. The new Fed chair, Kevin Warsh, took the report more seriously than the DOJ did—announcing Thursday he would hire an independent auditor to "verify accuracy and compliance" for all project costs and instituting supervisory reforms designed to eliminate the very plausible-deniability escape hatches the IG report exposed. According to Breitbart, Warsh's response amounted to a stern repudiation of Powell's supervisory practices—which is more than the Justice Department managed.
Powell, for his part, said at his final press conference as Fed chair in April that he would not leave the central bank's board "until this investigation is well and truly over, with transparency and finality." He remains a Fed governor after stepping down as chair in May. The revolving door doesn't just spin between government and industry—it protects the people already inside the building.
Donald Trump, who has been a vocal critic of Powell across both presidencies, called for Powell's resignation following the IG report. A Fed spokesperson had no immediate comment on Blanche's statements.
The same institution that couldn't adequately supervise a construction project was entrusted with supervising the nation's money supply during the worst inflation stretch in forty years. The inspector general's conclusion that oversight was lax is an indictment of the entire management culture Powell oversaw—one where billions could flow without adequate supervision and no one at the top is ever responsible. The DOJ's decision to stand down ensures that culture stays unexamined.
Powell kept interest rates near zero, helped inflate asset bubbles, and then told working Americans the resulting price spikes were transitory. Now the man who couldn't keep track of renovation billions gets to walk away from that too. The only question left is whether Warsh's independent auditor finds what the DOJ decided not to look for—or whether that door Blanche left open was never meant to be used.
