Federal Reserve watchdog finds no illegal conduct from Jay Powell in building renovations

The inspector general for the Federal Reserve found that the institution did not “effectively manage” its renovations of the central bank’s headquarters in Washington, D.C., but found no grounds for a criminal probe into former Federal Reserve Chairman Jerome Powell.The finding brings Powell closer to beating back the accusations by allies of President Donald Trump that he wrongfully spent huge sums on lavish workspaces for the Fed.“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,” the Office of the Inspector General wrote in a 121-page report. The report, though, did conclude that the Federal Reserve Board of Governors “has not effectively managed and executed [the building contract] and repeatedly deviated from its cost-management provisions,” the Office of the Inspector General wrote in its 121-page report on its findings.The report came after a long battle between Trump and Powell over how the renovations were managed, as well as Powell’s repeated decision not to lower interest rates. As the feud developed, Trump railed against Powell for the project’s price tag, saying the project had become over $1 billion more expensive than its initial estimate.Powell announced in January that the Department of Justice was investigating him following allegations that he lied in a 2025 Senate testimony regarding renovations to the Fed buildings.Powell argued that the inquiry was an effort by Trump to influence interest rate policy, but the Trump administration argued that it was a legitimate investigation into what amounted to massive cost overruns.In April, the Justice Department announced that it was ending its investigation into Powell. Sen. Thom Tillis (R-NC), a member of the Senate Banking, Housing, and Urban Affairs Committee, had threatened to block the nomination of now-Fed Chairman Kevin Warsh from a confirmation vote if it continued.U.S. Attorney Jeanine Pirro deferred to this week’s inspector general’s report in announcing that the prob was ending.The buildings at the center of the renovation, the Eccles Building and 1951 Constitution Avenue, had an estimated renovation budget of $1.9 billion in 2023. By 2025, though, those costs had ballooned to $2.5 billion. Both are located near the National Mall in Washington.During a Senate hearing, Powell responded to questions about the added costs, including the fact that the remodeling included opulent touches, such as special dining rooms and luxurious marble.Sen. Tim Scott (R-SC), chairman of the Senate banking committee, later followed up with Powell in a letter, saying that the only available construction plans for the building appear to contradict some of Powell’s statements and requested further clarification.“In April, I called for a full accounting of the egregious cost overruns from the Federal Reserve’s building renovation, and today, I welcome the Inspector General’s report,” Scott said Wednesday.In addition to the pressure on Powell, the Trump administration has also sought to fire Fed governor Lisa Cook. The administration has accused Cook of mortgage fraud, which resulted in a legal battle.FED PROJECTS ERA OF TOO-HIGH INFLATION TO LAST BETTER PART OF A DECADEThe Supreme Court ruled she could stay on the job. But the Supreme Court also said that Trump didn’t provide Cook with the process to dispute the allegations and her firing “will depend in part on the underlying facts.”The Washington Examiner reached out to the White House for comment about the Wednesday inspector general’s report.