No criminal wrongdoing in Federal Reserve building renovation, watchdog says, but it was mismanaged

The Federal Reserve's inspector general concluded Wednesday that the Board of Governors mismanaged its $2.4 billion building renovation, but found no criminal violations of the kind Trump administration prosecutors alleged. The 120-page report faulted the board for never obtaining a full cost estimate at the outset or fixing a maximum price, a step that could have made the contractor absorb inflation after 2022, according to ABC News.

The project became a flashpoint in President Donald Trump's push for lower interest rates. Last July, Trump toured the site with Jerome Powell, who corrected the president's cost estimate before TV cameras. Powell, now a former chair, later asked the watchdog to look into the work. Trump's Justice Department then investigated whether Powell committed perjury in Senate testimony, but dropped the inquiry in April after a judge quashed subpoenas from Jeanine Pirro, the U.S. Attorney for the District of Columbia, who said she would await the inspector general's findings. The watchdog said it found no reasonable grounds to believe federal criminal law was broken.

Spending on two Fed buildings more than doubled, from a $921 million projection in February 2020 to $2.018 billion by December 2024, with completion now expected in December 2027, not mid-2024. Fountains, private elevators and marble facades, which the administration and congressional Republicans had derided as lavish, were not major cost drivers. The inspector general instead blamed a 2023 switch from mostly open workspace to mostly closed offices, which slowed design and delayed any attempt to set a cost ceiling.

Summarized by PolitiKool from ABC News’s reporting. Read the full story at ABC News →