Michael E. Horowitz, a prominent watchdog who remained in his position during a purge of inspectors general by President Trump, is set to transition from his role as the Justice Department’s inspector general to become the chief internal watchdog at the Federal Reserve, effective June 30.
The Federal Reserve announced Horowitz's appointment, which is made by the Fed's chairman, Jerome Powell, without the need for presidential approval or Senate confirmation. This new role will allow Horowitz to oversee the Consumer Financial Protection Board, an agency that has been targeted by the Trump administration, although efforts to diminish its power have faced judicial challenges.
Inspectors general are tasked with identifying and preventing waste, fraud, inefficiencies, and abuses of power within government agencies. This position was established as part of a 1978 reform following the Watergate scandal.
Horowitz was notably one of the few inspectors general to retain his position after President Trump dismissed numerous officials shortly after taking office, actions that limited internal oversight of the administration's use of power. Eight of the dismissed inspectors general have since filed a lawsuit, claiming their removals violated legal requirements for advance notice and justification.
In 2019, Horowitz received praise from Trump and his allies for revealing significant errors in the FBI's surveillance applications related to the 2016 Trump campaign's Russia investigation. However, the dismissal of his colleagues has placed Horowitz in a precarious position as the primary oversight official responsible for reporting misconduct by law enforcement.
While Horowitz has broad oversight of the FBI and other Justice Department components, he lacks authority to investigate certain attorney misconduct within the main Justice Department. This limitation has meant that some controversial actions, such as the withdrawal of corruption charges against New York Mayor Eric Adams, fell outside his jurisdiction.
Horowitz plans to remain in his current role until the end of June, with his office declining to comment on the transition. His deputy, William M. Blier, is expected to serve as the acting inspector general until a permanent replacement is appointed, although Trump may utilize his authority under the Vacancies Reform Act to install a different candidate.
The Federal Reserve may soon be the last independent agency within the executive branch not under Trump's influence, following a recent Supreme Court ruling that allows the president to remove leaders of independent agencies without cause. Legal experts suggest this ruling could challenge Congress's ability to create independent agencies led by officials who cannot be dismissed arbitrarily by the president.
Horowitz, who holds a degree in economics from Brandeis University and a law degree from Harvard, has previously served as a federal prosecutor and on the U.S. Sentencing Commission. He was appointed as the Justice Department's inspector general by President Barack Obama in April 2012 and has played a significant role in the community of watchdog officials, particularly during the oversight of pandemic relief spending.
In his new role at the Federal Reserve, Horowitz will succeed Mark Bialek, who retired in April after nearly 14 years as inspector general.