The Department of Justice has decided to terminate its criminal investigation into Jerome Powell over the soaring cost of renovations at the Federal Reserve’s Washington headquarters, transferring the matter to internal oversight instead.

U.S. Attorney for Washington, D.C., Jeanine Pirro, announced Friday that the Federal Reserve’s inspector general will now examine the ballooning construction expenses, which have climbed into the billions and are ultimately borne by taxpayers.

“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”

“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” she added, warning she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”

Earlier this year, Pirro’s office issued subpoenas to Powell in connection with testimony he gave to Congress regarding the $2.5 billion renovation project at the central bank.

Plans tied to the overhaul reportedly included upscale features such as rooftop garden terraces and even Italian beehives, according to reporting first published last year.

Those subpoenas were halted by a federal judge last month, effectively pausing the criminal inquiry.

The investigation began in January after Powell denied before the Senate Banking Committee that the upgrades included high-end additions that were driving costs beyond initial projections.

“There’s no VIP dining room, there’s no new marble. There are no special elevators,” Powell testified. “There are no new water features, there’s no beehives, and there’s no roof terrace gardens.”

In a video statement released Jan. 11, Powell addressed the probe, saying: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”

Donald Trump visited the construction site last July, donning a hard hat and telling reporters that his background in real estate would make him unafraid to remove Powell if costs continued to rise.

Trump has repeatedly pressured Powell to lower interest rates during his second term and has, on several occasions, threatened to dismiss him over policy disagreements.

The Federal Reserve has also been grappling with financial losses, reporting a cumulative deficit of approximately $233 billion between 2022—the year after the renovation project received approval—and 2025.

Critics have blasted the scope of the renovation, with Senate Banking Committee Chairman Tim Scott and a former Fed official likening it to a “Palace of Versailles” on the National Mall.

The central bank operates two main buildings—the Eccles Building and the adjacent Federal Reserve Board East Building—both currently undergoing renovation led by architect Paul Cret.

Planning documents describe features including Georgian white marble, skylights, elaborate water elements, and a modern elevator system leading to a VIP dining suite, along with a private art collection housed in the basement.

Originally estimated at $1.9 billion in 2019, the project’s cost has since risen by roughly 32%, with completion expected in 2027.

Powell’s term as Fed chair is set to expire next month, while his proposed successor, Kevin Warsh, has faced delays in confirmation after Thom Tillis blocked consideration in protest of the DOJ investigation.

“American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter,” White House spokesman Kush Desai said in a statement.

“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making.”