Federal Reserve Inspector General Clears Agency of Criminality in Renovation Project

The Federal Reserve’s internal watchdog has concluded that while the $2.4 billion renovation of its headquarters was subject to significant management failures, no criminal violations occurred. The investigation found that the Board of Governors failed to establish a comprehensive initial cost estimate or a maximum price ceiling, leaving the project vulnerable to inflationary pressures and design changes.

Costs for the renovation increased from an initial estimate of $921 million in 2020 to over $2 billion by late 2024. The Inspector General attributed these overruns primarily to a 2023 shift in design strategy from open-plan workspaces to closed offices, which delayed project timelines and prevented the implementation of cost-control measures.

This report effectively ends a period of heightened political scrutiny regarding the project’s financing. Previous allegations of perjury and criminal misconduct, which were used to exert political pressure on the Federal Reserve’s leadership, have been dismissed following the findings of this audit. The project is now scheduled for completion in December 2027.