Fed watchdog finds no criminal grounds in renovation overrun; Trump urges Powell to resign

The Federal Reserve's inspector general released a report on Wednesday on the renovation of the Fed's headquarters in Washington, DC. The project covers two historic buildings. Its estimated cost is about $2.4bn, roughly $1bn over budget.

The inspector general found no reasonable grounds to believe a federal crime had occurred. It made no criminal referral and did not identify administrative misconduct. France 24 quoted the report as saying "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 US attorney general."

The report did find shortcomings in how the Fed managed and oversaw the project. The Fed did not establish an intended "guaranteed maximum price" arrangement. That arrangement would have shifted responsibility for cost overruns to the contractor. The Guardian quoted the report as saying the Fed's board "has not effectively managed" the project and "repeatedly deviated from its cost-management provisions". The report also found that marble, water features and a garden terrace "did not materially contribute" to the overruns.

According to the Guardian, construction costs rose from $921m in February 2020 to $2.018bn by December 2024. Completion, first due in mid-2024, is now set for December 2027. France 24 reported that Powell had asked the inspector general to take a fresh look at the project.

After the release, Trump posted on social media calling on Powell to resign. Powell is the former Fed chair. Kevin Warsh is the current chair. A separate Justice Department investigation related to the renovation was closed earlier this year.

What is disputed

The cause of the overruns is contested. Members of the Trump administration and allies in Congress suggested luxury upgrades inflated the budget. Powell said the extra costs reflected unexpected challenges, such as asbestos removal and higher prices for materials and labour, according to France 24. According to France 24, the inspector general's report found that problems with project oversight contributed to the overrun.

What each side says

Trump wrote that Powell "should be forced to resign from the Board", France 24 reported. He added: "If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence." He said he had directed Attorney General Todd Blanche to study the report.

According to France 24, Warsh said he would follow the report's recommendations and hire an independent auditor. Powell declined to comment. Republican Senator Tim Scott called the overruns "egregious". Democratic Senator Elizabeth Warren said the findings showed "no basis to restart the president's witch hunt".

The reports reviewed by Vocemundi do not describe any response from Blanche or the Justice Department. They do not explain what legal basis a lawsuit against Powell would have.

Analysis

The report gives each side material to cite. It found no grounds for a criminal referral and no administrative misconduct, though Trump still raises corruption and has asked the attorney general to study the report; it also documents real management failures that critics can point to. Its finding that the luxury features did not materially drive costs runs against a central White House argument. Several paths remain open. The Justice Department may take no further action or may review the report again. Congress may pursue the oversight Senator Scott promised. Warsh's independent audit may clarify unresolved points, such as why the price guarantee was never set. How these steps unfold could shape the wider debate over Fed independence and accountability.

Traceability
Sources (3): France 24 · Al Jazeera · The Guardian (Business)
Independent origins: 2 · Perspectives covered: middle-east, west-left, west-public
Confirmed: 15 · Reported: 16 · Disputed: 2 · Confidence: high
Review: 3 AI reviewers (Claude, GPT-5.6 Sol, Kimi) · 36/36 claims backed by 2+ reviewers with verified evidence · 0 errors · approved
Drafted: 2026-10-01 01:02 UTC

Produced by the Vocemundi newsroom with AI assistance.