Fed Inspector General Finds No Criminal Conduct in $2.4 B Renovation, Cites Management Failures

The Federal Reserve’s inspector general released a detailed report finding that the agency’s $2.4 billion renovation of two headquarters buildings was mismanaged but not criminally illegal. The Board of Governors did not obtain a comprehensive cost estimate or impose a maximum cost ceiling at the project's outset, allowing inflation and design revisions to inflate the budget from an initial $921 million projection to more than $2 billion by December 2024.

A shift in 2023 from open workspaces to closed offices delayed design work and prevented the Fed from locking in a cost cap. Critics, including President Donald Trump, had singled out features such as marble facades and private elevators, but the report says these were not major cost drivers. The investigation was prompted by former Chair Jerome Powell after the renovation became a political issue, and it found no reasonable basis for federal criminal prosecution, ending the Justice Department’s inquiry.