The outgoing Republican had made the fate of the inquiry into Powell a nonnegotiable condition for his support, warning that the case posed a direct threat to the Fed's institutional independence.
“I have been clear from the start: the U.S. Attorney’s Office criminal investigation into Chair Powell was a serious threat to the Fed’s independence, and it needed to end before I could support Kevin Warsh’s confirmation,” Tillis said in a statement released Sunday. His reversal removes a major obstacle for Warsh, the Trump administration's pick to lead the central bank, and clears a path for a confirmation vote in the coming weeks.
The Justice Department moved to drop the investigation on Friday. The inquiry had centered on cost overruns related to renovations of the Federal Reserve’s Washington headquarters. The decision to abandon the case came after a federal judge, James Boasberg, quashed subpoenas that the DOJ had issued to the Fed, dealing a legal blow to the government's pursuit of the matter.
Tillis, who is retiring at the end of his term this year, said he welcomes a separate investigation into the same renovations being conducted by the Fed’s inspector general, describing it as “a necessary and appropriate measure.” He emphasized that his support for Warsh was contingent on the criminal investigation being permanently closed, not merely paused.
“I take the Department of Justice at its word: the investigation is closed, and any appeal of Judge Boasberg’s ruling will be with respect to legal principles and not for the purpose of reissuing subpoenas,” Tillis wrote. He added that only a criminal referral from the inspector general could cause the investigation to be reopened.
In an interview Sunday on NBC’s “Meet the Press,” Tillis said he has “had a number of discussions with the Department of Justice” and that officials “have made it very clear that the current investigation is completely and fully ended.” He described an intensive process of securing assurances over the weekend to ensure the department was not weaponizing its authority against the central bank.
“We worked a lot over the weekend to make sure that we were very clear that we had the assurances from the DOJ that I needed to feel like they were not using the DOJ as a weapon to threaten the independence of the Fed,” Tillis told the program. His shift in position effectively removes the last significant hurdle to Warsh's confirmation, setting the stage for a transition of power at the nation's most powerful economic institution.
