Fed Renovation Project Costs Soar, No Misconduct Found

The Federal Reserve's Inspector General has released a report on the renovation project of two historic buildings on the National Mall in Washington, finding no evidence of administrative misconduct or criminal referral related to cost overruns. The project, initially estimated at $1 billion, ballooned to around $2.4 billion due to various factors including asbestos abatement and higher-than-estimated prices for materials and labor.

The report highlighted extensive problems with project oversight, including the failure of the Fed to follow through on a 'guaranteed maximum price' contract that would have made the contractor responsible for cost overruns. The central bank ultimately paid $346 million for plumbing and air conditioning, triple the initial estimate.

President Donald Trump had criticized the project's cost overrun in his effort to engineer former Fed chief Jerome Powell's ouster. However, the report found that design elements like marble, water features, and a garden terrace cited by critics did not materially contribute to the cost overruns.