Fed Watchdog Finds Mismanagement, Not Crime, in $2.4-Billion Building Project

The Federal Reserve's internal watchdog has released a report on a $2.4-billion building renovation project, finding that the central bank broadly mismanaged the project but did not find any criminal violations.

The inspector general's report stated that the Fed's Board of Governors and staff made several missteps during the project, including failing to secure a comprehensive cost estimate at the beginning of the project. This led to prices spiking after construction began in 2022.

The report also found that the design change by the Fed from a mostly open workspace to one with mostly closed office space caused a significant delay in the project's design and delayed the Fed from seeking a maximum cost ceiling for the project at that time.

Former Fed Chairman Jerome Powell was criticized during his term, including by then-President Trump, who visited the construction site in July 2025. The investigation into the renovation was eventually dropped after a judge quashed subpoenas issued by Jeanine Pirro, the U.S. attorney for the District of Columbia.