Stories
Fed Watchdog Clears $2.4 Billion HQ Renovation of Criminal Wrongdoing Amid Trump-Powell Row
- •The Federal Reserve's internal watchdog found no criminal wrongdoing in the $2.4 billion renovation of its Washington headquarters, a project that became a point of contention between the Fed and the Trump administration.
- •The Office of Inspector General (OIG) report identified missteps leading to cost surges from an initial $1.3 billion budget in 2020 but found no reasonable grounds for federal criminal law violations.
- •Fed Chairman Kevin Warsh stated the central bank would implement the OIG's recommendations, with the General Services Administration taking over project management and an independent auditor scrutinizing costs.
- •The OIG highlighted deficiencies including the Fed board's failure to act on previous cost overrun failings, lack of a stated cost limitation, and inadequate internal governance for a project of this scale.
- •Factors contributing to cost increases included design changes, site conditions, inflation, and a lack of bids for some work, though features like marble or garden terraces were not material drivers.
Key Questions Answered
The Federal Reserve’s Office of Inspector General found no evidence of criminal wrongdoing or administrative misconduct in the $2.4 billion Washington headquarters renovation project. However, the report did identify a series of management missteps, inflation, and design changes that contributed to surging costs from an initially budgeted $1.3 billion in 2020.
The General Services Administration (GSA), which assists in managing federal government buildings, will take over the renovation project and report directly to the Fed’s Board of Governors and Fed Chairman Kevin Warsh.
US Attorney for the District of Columbia Jeanine Pirro dropped the inquiry in April after bipartisan lawmakers objected and following a federal judge's ruling that quashed DOJ subpoenas as an improper retaliation tactic over interest rate policy differences.
