US Fed watchdog finds no criminal wrongdoing in Powell-era renovation costs

What the report says

Al Jazeera reports that the Federal Reserve’s inspector general found no basis for a criminal referral and no evidence of administrative misconduct in connection with the costly renovation of two Fed buildings in Washington, DC. The review was released on Wednesday and centers on a project that has grown to roughly $2.4bn, about $1bn above earlier estimates.

The renovation had become a political issue during President Donald Trump’s public campaign against then-Fed Chair Jerome Powell. According to the report, Trump repeatedly cited the project’s expenses while pressing Powell to cut interest rates. A separate Justice Department inquiry into the renovation and Powell’s congressional testimony was closed earlier this year after a federal judge ruled that the probes were being used as leverage against the central bank chief, Al Jazeera says.

The watchdog did, however, identify problems in how the Fed managed the project. Among other issues, it said the central bank did not set a guaranteed maximum price that could have shifted overruns to the contractor. It also said some design elements criticized by the White House, including marble, water features and a garden terrace, did not materially drive the higher costs.

More broadly, the findings add context to long-running tensions between the White House and the Federal Reserve over interest rates, while also highlighting the risk of overruns on major public construction projects.