Fed Watchdog Finds No Crime in $2.4B Renovation, Only Mismanagement

The Federal Reserve's internal watchdog has released a report finding no evidence of criminal activity in the $2.4 billion renovation project, but instead identifying mismanagement by the Fed's Board of Governors and staff.

The report found that the board failed to secure a comprehensive cost estimate at the beginning of the project and did not nail down a maximum overall cost, which could have forced the contractor to absorb inflation costs.

As a result, prices spiked after construction began in 2022, with the original estimate of $921 million more than doubling to $2.018 billion by December 2024.

Current Fed Chairman Kevin Warsh welcomed the IG's findings and announced that the General Services Administration would take over the management of the project, while the Fed would engage an independent auditor to evaluate the building project and all its costs.