Watchdog clears Fed renovation of criminal wrongdoing

The Federal Reserve's inspector general found no reasonable grounds to believe federal law was violated in the multibillion-dollar renovation project that drew Trump's criticism.

But the Fed mismanaged the project

The 120-page report said the Fed board had not effectively executed the contract and its cost-management provisions, and did not identify administrative misconduct or criminal violations.

Trump blames Powell immediately

President Trump blamed the cost overruns on former Fed chair Jerome Powell, writing on Truth Social that Powell should resign immediately or be sued for corruption or incompetence.

“This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!”

The renovation drew Trump's sustained attention

The construction site on the Fed's Washington campus became a fixation of the Trump administration as Trump also pressured Powell to cut interest rates and nominated Kevin Warsh as new chair.

Over two billion in costs, no price cap

After four years of construction and over two billion dollars in awarded construction costs, the Fed board had not established a guaranteed maximum price for the project.

Lavish features did not drive costs

The watchdog found that marble, water features and a garden terrace that drew scrutiny did not materially contribute to cost increases. Removing water features would not save money because landscaping would be needed.

Real causes of cost overruns

The watchdog said cost overruns resulted from inflation, limited subcontractor bidding, substantial interior design changes and challenging site conditions that extended the project's duration.

Design shift showed poor management

Moving from closed offices to open workspaces after construction began was a clear example of ineffective project management that extended the project and exposed it to inflationary pressures.

Warsh takes control, brings in GSA

Fed chair Kevin Warsh agreed the work must be completed efficiently and transparently, saying the General Services Administration would become the project executive effective immediately.

Senate hearing puts spotlight on project

At a June twenty-fifth, twenty twenty-five Senate hearing, Senator Tim Scott of South Carolina asked Powell about the renovation, accusing him of spending billions on lavish features including rooftop terraces and custom elevators.

“spent billions on lavish renovations”

Powell denies the accusations

Powell denied Scott's claims, saying there was no VIP dining room, no new marble, no special elevators, no new water features and no roof terrace gardens.

“There's no [VIP] dining room. There's no new marble.”

Trump's OMB director attacks Powell

Shortly after the June hearing, Trump's Office of Management and Budget director Russell Vought wrote Powell that Trump was extremely troubled by his management, likening the renovation to a palace.

Trump visits the construction site

On July twenty-fourth, twenty twenty-five, Trump made an unprecedented visit to the Fed's construction site, touring alongside Powell and Scott and suggesting the price tag had ballooned further.

Criminal probe launched then blocked

In January, Powell announced the Department of Justice had served grand jury subpoenas over his Senate testimony. A judge later blocked the subpoenas, saying the U.S. attorney had produced essentially zero evidence of a crime.

“produced essentially zero evidence to suspect Chair Powell of a crime”

Powell stays on board despite pressure

U.S. attorney Jeanine Pirro closed her office's probe but kept the threat to investigate Powell on the table. Powell decided to stay on the Fed board when his chair term ended May twenty-second, denying Trump a chance to fill the spot.