Fed Watchdog Slams Central Bank Over $2.4 Billion Renovation Debacle

The Federal Reserve's internal watchdog has released a report criticizing the central bank's management of its $2.4 billion building renovation project. The inspector general found that the Fed's Board of Governors and staff made several missteps, including failing to secure a comprehensive cost estimate at the beginning of the project.

As a result, construction costs more than doubled from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024. The report said that the Fed's decision to change the design of the building from mostly open workspace to one with mostly closed office space caused significant delays and increased costs.

The investigation was sparked by criticism from President Donald Trump, who accused Jerome Powell, the former chair of the Federal Reserve, of committing perjury during testimony about the renovation. A criminal investigation was launched, but it was dropped in April after a judge quashed subpoenas issued by Jeanine Pirro, the U.S. attorney for the District of Columbia.

The report concluded that there were no reasonable grounds to believe that a violation of federal criminal law had occurred. However, it did recommend that the Fed engage an independent auditor to evaluate the building project and all its costs.