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The Federal Reserve’s internal watchdog said the central bank mismanaged the renovation but found no criminal wrongdoing in the $2.5 billion boondoggle.
Federal investigators in January opened a criminal investigation into Fed Chairman Jerome Powell.
Powell was under fire for the cost of renovating the Fed’s DC headquarters. The cost ballooned from $1.9 billion to $2.5 billion.
“Powell has asked the central bank’s inspector general to conduct an additional review of the ongoing renovation, CNN previously reported. Last month, some Senate lawmakers grilled Powell over what they depicted as lavish upgrades to its DC headquarters at Powell’s semiannual monetary policy hearing,’ CNN previously reported.
“The Fed’s renovation project was approved by its board in 2017 and originally cost $1.9 billion in 2019. Construction began in 2021, but the cost swelled to $2.5 billion because of “unforeseen conditions” requiring more spending to rectify, such as “more asbestos than anticipated, toxic contamination in soil, and a higher-than-expected water table,” according to the Fed’s website,” CNN reported.
The Fed watchdog determined no criminality in the central bank’s renovation.
NBC News reported:
The Federal Reserve’s independent watchdog said Wednesday it found no reasonable grounds to believe there was a violation of federal law in a multibillion-dollar renovation project that drew criticism from President Donald Trump and short-lived scrutiny from federal prosecutors.
But the central bank’s board “had not effectively executed” a contract and its cost-management provisions, according to a 120-page report from the Office of the Inspector General for the Board of Governors of the Federal Reserve System.
Even after four years of construction and over $2 billion in awarded construction costs, the Fed board had “not established a guaranteed maximum price” for the project, and had set up “insufficient” internal project governance to manage a project of such “magnitude and complexity,” the watchdog said.
Still, the report “did not identify administrative misconduct” nor any “reasonable grounds to believe that a violation of federal criminal law had occurred.”
Last July, Jerome Powell was criminally referred to the Justice Department for prosecution.
Earlier this year, Judge Boasberg, an Obama appointee, quashed the Justice Department’s subpoenas issued to Fed Chairman Jerome Powell.
Boasberg previously blasted Trump and US Attorney Pirro, saying the subpoenas were improperly issued after the president pressured Powell to lower interest rates.
In April, the Justice Department dropped its criminal investigation into Jerome Powell.
President Trump responded:
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