Key facts
- Fed's Inspector General found no misconduct or criminal referral grounds for renovation project.
- Project had $1 billion cost overrun, bringing total to $2.4 billion.
- Report cited deficiencies in project oversight and management.
- Then-President Trump used cost overruns to criticize Fed and Powell.
- Failure to establish a guaranteed maximum price contract contributed to costs.
- Design changes did not materially contribute to cost overruns.
The Federal Reserve's Inspector General found no misconduct or grounds for criminal referral related to the central bank's building renovations, despite significant oversight deficiencies and a $1 billion cost overrun. The report, issued in September 2026, detailed shortcomings in project management, including the failure to establish a guaranteed maximum price contract, which contributed to the escalating costs that brought the total estimated price tag to approximately $2.4 billion.
Then-President Donald Trump had seized on the cost overruns of the renovation project, which began during the tenure of former Fed Chair Jerome Powell, as a focal point for his criticism of the central bank and its monetary policy. Trump had also sought to influence Fed leadership, even considering a lawsuit against Powell over the matter.
The IG's report, however, stated that design elements cited by critics did not materially contribute to the cost overruns. The controversy had previously led to grand jury subpoenas from the Department of Justice, which were later blocked by a US District Judge who agreed they were issued to pressure Powell. US Attorney Jeanine Pirro announced in April 2026 that the DOJ was closing its investigation.
Powell had requested the IG's review of the project. Following his term as chair, Powell remained on the Fed Board, a move he stated was due to administration attacks threatening the Fed's independence.