Review of Fed Renovation Finds Management Failures, No Grounds for Criminal Referral

The Federal Reserve failed to use key cost controls and adequately oversee a headquarters renovation whose approved budget grew by more than $1 billion, according to an inspector general report released on Sept. 29.

The inspector general identified significant management deficiencies but found no reasonable grounds to believe that a federal criminal violation had occurred requiring referral to the attorney general. The review also found no administrative misconduct.

The construction costs for renovating the Marriner S. Eccles and 1951 Constitution Avenue buildings in Washington increased from $921 million in February 2020 to $2 billion in December 2024. The budget grew from $1.31 billion in 2020 to $2.38 billion in August 2026. Construction, originally expected to finish in the second quarter of 2024, is now scheduled to end in December 2027.

The report found the Federal Reserve at fault for not successfully managing or executing the project.

The inspector general investigation began in July 2025 at the request of then-Federal Reserve Chairman Jerome Powell.

President Donald Trump, in a Sept. 30 post on Truth Social, called for Powell, who served as chairman until May 22 but still serves on the Board of Governors until Jan. 31, 2028, to resign immediately in light of the report.

“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,” Trump said.

Trump said he has asked Attorney General Todd Blanche to review the report and determine next steps.

The president threatened in December 2025 to sue Powell over management of the central bank’s headquarters’ renovation, alleging “gross incompetence.”

U.S. Sen. Elizabeth Warren (D-Mass.) said on Sept. 30 on X that the Trump administration should not restart a “witch hunt” against Powell.

“Today, the Fed’s Inspector General confirmed that Trump lapdogs U.S. Attorney Jeanine Pirro and Attorney General Todd Blanche have no basis to restart the President’s witch hunt against former Fed Chair Jerome Powell,” Warren said. “The President should quit trying to fire Fed governors to cover up for his economic failures and instead stop his chaotic tariffs and end his war in Iran.”

The dispute followed Trump’s July visit to the construction site, where he put the project’s cost at $3.1 billion. Powell disputed that figure, saying the cost remained $2.5 billion. Office of Management and Budget Director Russell Vought also questioned a $700 million budget overrun. Powell defended the renovation as necessary to address aging infrastructure. The disagreement unfolded alongside Trump’s criticism of the Fed’s interest rate decisions and urging that the central bank lower borrowing costs.

“Today’s IG report reinforces the gross mismanagement that President Trump has repeatedly highlighted by the Federal Reserve’s prior leadership,” White House spokesman Kush Desai said on Sept. 30 in an email to The Epoch Times.

“Despite numerous assurances to Congress and [Office of Management and Budget] that the project was being carefully overseen, prior Fed leadership failed to be attentive or concerned about cost control enforcement while costs of the Fed’s renovation doubled for American taxpayers. Financial markets and hard-working Americans alike deserve a Federal Reserve with competence and accountability.”

Rep. Anna Paulina Luna (R-Fla.) referred Powell to the Justice Department on July 19, 2025, requesting an investigation into potential perjury and false statements concerning the renovation. Luna said that Powell’s June 25 testimony before the Senate Banking Committee contradicted project documents describing features such as a VIP dining room, marble, water features, and a roof terrace garden. She also accused Powell of misrepresenting the building’s renovation history and the scope of project changes.

The Justice Department’s criminal investigation was halted in April after a judge blocked subpoenas for Powell.

The inspector general found no reasonable grounds for a criminal referral and no administrative misconduct during its review, which included congressional testimony about the renovation.

The report stated: “In January 2026, we learned from a public statement by then-Chairman Powell that the U.S. Department of Justice had opened a criminal probe involving his June 2025 testimony before Congress, which in part concerned the renovation project.

“At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the U.S. Attorney General in accordance with the Inspector General Act. Further, while our report outlines deficiencies in the management of the renovation project, resulting in our recommended corrective actions in accordance with the Inspector General Act, we did not identify administrative misconduct during our evaluation.”