Fed IG Clears Powell in Renovation Project, Cites Management Failures

The Federal Reserve's Inspector General found no evidence of misconduct in the renovation project led by former Fed chief Jerome Powell, but did identify significant management deficiencies that contributed to a nearly $1 billion cost overrun. The project now has a price tag of around $2.4 billion.

President Donald Trump had publicly criticized the project and used it as an opportunity to pressure Powell's ouster. However, the IG's report noted that 'at no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the US Attorney General.'

The report highlighted a failure by the Fed to follow through on its intention to use a 'guaranteed maximum price' contract, which would have made the contractor responsible for cost overruns. Instead, Fed project managers awarded subcontracts that continued to escalate the price and timeline of the project.

Fed Chairman Kevin Warsh has said he will follow the IG's recommendations on project management and hire an independent auditor to 'verify accuracy and compliance' of all awarded costs to date.