The Federal Reserve’s internal watchdog reported Wednesday that the agency broadly mismanaged the $2.4 billion renovation of its Washington headquarters, though it found no evidence of criminal violations or breaches of federal law. The report follows an investigation by the Justice Department that was dropped earlier this year.
According to the inspector general's 120-page report, several missteps by the board of governors inflated project costs. The board failed to secure a comprehensive cost estimate at the start of the project and did not establish a maximum overall cost, which would have forced the contractor to absorb inflation spikes that occurred after construction began in 2022. Additionally, the watchdog found no fault with project features that the White House had previously criticized as ostentatious and non-compliant with approved plans.
The renovation costs became a central point in President Donald Trump’s pressure campaign against former Federal Reserve Chair Jerome Powell, occurring as the president pushed for lower interest rates. Trump blamed Powell for the mismanagement and demanded that he be sued at the highest level or forced to resign.
Despite these allegations, the inspector general concluded there are no reasonable grounds to justify criminal charges against the former chair. The report clarifies that while cost overruns occurred, they did not constitute criminal wrongdoing.