Tillis rejects off-ramp for Powell criminal probe

Sen. Thom Tillis, R-N.C., on Thursday rejected a proposal aimed at ending the Department of Justice’s controversial criminal probe into Federal Reserve Chair Jerome Powell and clearing a path for his successor, Kevin Warsh, to be confirmed.

The proposed off-ramp, which has been floated by at least one Republican lawmaker this week, would see the Powell investigation handed off from the DOJ to the Senate Banking Committee.

The idea is an attempt to thread a political needle: It would drop the threat of criminal prosecution against Powell – which spurred Tillis, a Banking Committee member, to declare a blockade on Warsh – while still satisfying President Donald Trump, who supports the DOJ probe.

But Tillis poured cold water on that proposal Thursday morning.

“I’m not going to have an investigation out there,” Tillis told reporters on Capitol Hill. “We have to have an independent Fed. And we can’t finesse this.”

“They either need to move forward with a compelling investigation that convinces me I was wrong, or resolve the current investigation and move on,” he said.

Asked specifically about the idea of the Banking Committee taking the reins from DOJ, Tillis was unmoved.

“We do oversight, we don’t prosecute,” he said.

“I do believe that the administration was surprised by it and that they weren’t aware of it,” he said of the White House not having a heads up about the DOJ’s investigation. “But at the end of the day, if that’s not resolved, I’m not going to allow a successful markup to occur” on Warsh’s nomination.

“And I believe that most Democrats are not going to vote for it, so I don’t see a path,” he added.

This is developing news. Please check back for updates.

— CNBC’s Emily Wilkins and Dan Mangan contributed to this report.