The Justice Department has closed its criminal investigation into Federal Reserve Chair Jerome Powell over the renovation of the central bank’s headquarters, removing an obstacle for Kevin Warsh, President Donald Trump’s pick to replace Powell, to be confirmed to the role.

U.S. Attorney for the District of Columbia Jeanine Pirro, a close Trump ally, said in a statement on social media Friday that the inspector general for the Fed is instead conducting an inquiry into the building’s renovation costs.

“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro added. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

Pirro’s office had been investigating Powell over the $2.5 billion renovation of the Fed’s Washington building, a probe that Powell said was a result of his rejecting Trump’s repeated demands to lower interest rates.

But the investigation — which Trump professed his support for — became a hurdle to the president’s effort to replace Powell with Warsh. Sen. Thom Tillis, R-N.C., a key member of the Senate Banking Committee, had vowed to block Warsh’s confirmation so long as the “weak and frivolous” probe continued.

Pirro said in her statement that the Fed inspector general “has the authority to hold the bank accountable to American taxpayers” and added that she expects a report into the inquiry soon. Although she said the inspector general had been asked “this morning” to look into the renovation costs, that office had already been tasked with evaluating the project prior to her announcement.

White House spokesperson Kush Desai similarly said the inspector general’s “more powerful authorities best position it to get to the bottom of the matter.”

Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, dismissed Pirro’s announcement as “an attempt to clear the path” for Warsh’s confirmation.

“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 Lisa Cook,” Warren said, referring to the DOJ’s ongoing investigation into another member of the Fed’s board whom Trump is seeking to remove.

Speaking to reporters on Friday afternoon, White House press secretary Karoline Leavitt said the investigation into Powell “is not necessarily dropped, it’s just being moved over” to the central bank’s inspector general.

“So the investigation still continues. It’s just under a different authority, and that’s what you’ll continue to see,” she said.

A federal criminal investigation is fundamentally different than an inspector general’s review. If, during its review, evidence of criminal wrongdoing is uncovered, the inspector general could refer the matter to the DOJ. Inspectors general don’t have the authority to file criminal charges.

Ken Dilianian contributed reporting.

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