Internal Watchdog Says Federal Reserve’s Renovation Was Mismanaged But Found No Criminal Wrongdoing in $2.5 Billion Boondoggle – Trump Responds, Targets Jerome Powell

Here we go.

The Federal Reserve’s internal watchdog said the central bank mismanaged the renovation but found no criminal wrongdoing in the $2.5 billion boondoggle.

Federal investigators in January opened a criminal investigation into Fed Chairman Jerome Powell.

Powell was under fire for the cost of renovating the Fed’s DC headquarters. The cost ballooned from $1.9 billion to $2.5 billion.

“Powell has asked the central bank’s inspector general to conduct an additional review of the ongoing renovation, CNN previously reported. Last month, some Senate lawmakers grilled Powell over what they depicted as lavish upgrades to its DC headquarters at Powell’s semiannual monetary policy hearing,’ CNN previously reported.

“The Fed’s renovation project was approved by its board in 2017 and originally cost $1.9 billion in 2019. Construction began in 2021, but the cost swelled to $2.5 billion because of “unforeseen conditions” requiring more spending to rectify, such as “more asbestos than anticipated, toxic contamination in soil, and a higher-than-expected water table,” according to the Fed’s website,” CNN reported.

The Fed watchdog determined no criminality in the central bank’s renovation.

NBC News reported:

The Federal Reserve’s independent watchdog said Wednesday it found no reasonable grounds to believe there was a violation of federal law in a multibillion-dollar renovation project that drew criticism from President Donald Trump and short-lived scrutiny from federal prosecutors.

But the central bank’s board “had not effectively executed” a contract and its cost-management provisions, according to a 120-page report from the Office of the Inspector General for the Board of Governors of the Federal Reserve System.

Even after four years of construction and over $2 billion in awarded construction costs, the Fed board had “not established a guaranteed maximum price” for the project, and had set up “insufficient” internal project governance to manage a project of such “magnitude and complexity,” the watchdog said.

Still, the report “did not identify administrative misconduct” nor any “reasonable grounds to believe that a violation of federal criminal law had occurred.”

Last July, Jerome Powell was criminally referred to the Justice Department for prosecution.

Earlier this year, Judge Boasberg, an Obama appointee, quashed the Justice Department’s subpoenas issued to Fed Chairman Jerome Powell.

Boasberg previously blasted Trump and US Attorney Pirro, saying the subpoenas were improperly issued after the president pressured Powell to lower interest rates.

In April, the Justice Department dropped its criminal investigation into Jerome Powell.

President Trump called for Jerome Powell to resign from the Board of Governors.

Trump also said he has asked Todd Blanche to study the Inspector General’s report:

The Inspector General’s Report just came out on Jerome “Too Late” Powell’s “renovation” of the Federal Reserve Headquarters in Washington, D.C. The IG’s Report states that there were “deficiencies in the management of the renovation project.” The Building is over budget, at a Record Setting rate and, at a minimum, “Too Late” Powell should be forced to resign from the Board. He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy (only on “TRUMP!”). I have asked Attorney General Todd Blanche to study the report, and make a determination as to what to do about a relatively small Building Complex that is Hundreds of Millions of Dollars over budget, and is now going to cost, according to the Report, at least 2.5 Billion Dollars, with no end in sight.

The Report states, “We were concerned to find that the Board did not obtain a project cost estimate from the [construction manager] until January 2026, which was 3.5 years after construction began and after the Board had awarded more than $2 billion in construction costs. As of July 2026, more than 4 years after construction began and $2 billion has been awarded for construction, the Board had yet to set a [guaranteed maximum price]” — An absolutely unheard of situation! — “The Board therefore still does not have cost certainty and has not transferred material risk to the [construction manager].” In actuality, I think that the 2.5 Billion Dollars will be 3.5 Billion Dollars, and maybe 4 Billion Dollars by the time they’re finished, and may never get properly built. Soundproofing, and all other elements of the Building, will be inferior to what was previously there.

In particular, the magnificent beauty, sculptured ceilings and walls, and so many other things which made the Federal Reserve Building stand apart, will never be captured again, and are only being replaced by flat, boring, less than midlevel finishes. I could have done a far better Renovation for 25 Million Dollars, completely maintaining the MAGNIFICENCE of the structure, and had money left over. They completely destroyed the Beauty and Glorious History of the Building. This is Jerome Powell’s fault, and he should be forced to resign, IMMEDIATELY! If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable…And no, I do not want this Building named after President Donald J. Trump, ME! Thank you for your attention to this matter. President DONALD J. TRUMP

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