<p class="wp-block-paragraph">The inspector general for the <a href="https://www.washingtonexaminer.com/tag/federal-reserve/" rel="noopener noreferrer" target="_blank">Federal Reserve</a> 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 <a href="https://www.washingtonexaminer.com/tag/jerome-powell/" rel="noopener noreferrer" target="_blank">Jerome Powell</a>.</p>
<p class="wp-block-paragraph">The finding brings Powell closer to addressing accusations from allies of President Donald Trump regarding excessive spending on the renovations.</p>
<p class="wp-block-paragraph">“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 stated in a 121-page report.</p>
<p class="wp-block-paragraph">The report concluded that the Federal Reserve Board of Governors “has not effectively managed and executed [the building contract] and repeatedly deviated from its cost-management provisions,” according to the Office of the Inspector General.</p>
<p class="wp-block-paragraph">This report follows a prolonged dispute between Trump and Powell regarding the management of the renovations and Powell’s decisions on interest rates. Trump criticized Powell for the project's escalating costs, claiming it exceeded initial estimates by over $1 billion.</p>
<p class="wp-block-paragraph">In January, Powell announced that the Department of Justice <a href="https://www.washingtonexaminer.com/news/justice/4414287/powell-defends-record-video-statement-after-criminal-inquiry-drops/" rel="noopener noreferrer" target="_blank">was investigating him</a> following allegations of misleading testimony regarding the renovations during a Senate hearing in 2025.</p>
<p class="wp-block-paragraph">Powell contended that the inquiry was an attempt by Trump to influence interest rate policy, while the Trump administration maintained it was a legitimate investigation into significant cost overruns.</p>
<p class="wp-block-paragraph">In April, the Justice Department announced it was ending its investigation into Powell. Senator 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 if the investigation continued.</p>
<p class="wp-block-paragraph">U.S. Attorney Jeanine Pirro referenced the inspector general’s report when announcing the conclusion of the probe.</p>
<p class="wp-block-paragraph">The renovations at the Eccles Building and 1951 Constitution Avenue had an estimated budget of $1.9 billion in 2023, which increased to $2.5 billion by 2025. Both buildings are located near the National Mall in Washington.</p>
<p class="wp-block-paragraph">During a Senate hearing, Powell addressed questions regarding the increased costs, which included high-end features such as special dining rooms and luxurious marble.</p>
<p class="wp-block-paragraph">Senator Tim Scott (R-SC), chairman of the Senate Banking Committee, later followed up with Powell in a letter, noting discrepancies between the available construction plans and Powell’s statements, and requested further clarification.</p>
<p class="wp-block-paragraph">“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 stated.</p>
<p class="wp-block-paragraph">In addition to the scrutiny on Powell, the Trump administration sought to remove Fed governor Lisa Cook, accusing her of mortgage fraud, which led to a legal dispute.</p>
<p class="wp-block-paragraph">The <em>Washington Examiner</em> reached out to the White House for comment regarding the inspector general’s report released on Wednesday.</p>