No grounds for a criminal referral, but the Fed still owes answers on its renovation

But the same evaluation found that the Board repeatedly departed from provisions meant to manage construction costs and lacked adequate internal oversight for a project of this scale and complexity. The watchdog made seven recommendations, which the Board accepted. Calling the report a clean bill of health would ignore its management findings.

The distinction matters because the renovation became a flashpoint in President Donald Trump’s dispute with Powell over interest rates. Powell requested the watchdog’s review in July 2025. The Justice Department’s investigation into whether he committed perjury during Senate testimony about the project ended in April 2026 after a judge quashed subpoenas. The Associated Press reported that a spokesperson for U.S. Attorney Jeanine Pirro’s office said Wednesday that it was reviewing the inspector general’s report. Findings about contract management must not be recast as findings of perjury.

Where the cost controls fell short

The Board approved a $1.317 billion total project budget in February 2020 and a $2.381 billion budget in December 2024, the latest revision cited in the watchdog’s summary. Those are budgets at two different dates, not the final cost of the finished project. The construction portion rose from $921 million to $2.018 billion over the same period.

The watchdog did not attribute all that growth to management decisions. Inflation and difficult site conditions also contributed. Nor did it find that marble, water features and the garden terrace materially drove the cost increases. Scrutiny should follow the documented failures, not a political image of extravagance.

One failure is especially revealing: The Board began construction without a comprehensive cost estimate from its contractor or an agreed guaranteed maximum price. Under the type of contract it chose, that price can shift certain cost and schedule risks to the construction manager. By July 2026, more than four years after construction began, the Board had awarded $2 billion in construction work without establishing a guaranteed maximum price.

The Board hired its construction manager in March 2022, after two design phases were complete. In January 2023, it changed the interior plan from predominantly open workspaces to predominantly closed offices, delaying completion of that design by 21 months, the watchdog found. Those choices warrant an explanation; they do not prove that every added dollar was avoidable.

Accountability without insinuation

The strongest case for restraint is real: Inflation, site conditions and changing needs can complicate a major renovation. A 2020 budget was not a guarantee of a finished project at that price, and the final cost remains unknown. Criminal insinuation is a poor substitute for examining estimates, contract decisions and who had authority to approve changes.

Yet complexity makes oversight more important. The inspector general said weaknesses in planning, cost estimation, cost control and oversight resembled problems it had identified in earlier reviews of the Martin building renovation. Accepting recommendations without showing whether they were carried out risks leaving those recurring weaknesses in place.

Federal Reserve Chair Kevin Warsh has said the Fed will follow the seven recommendations, seek advice from the General Services Administration and commission an independent audit of construction costs. We welcome those steps. An audit that has not been completed, however, cannot yet establish the final cost, identify any payments warranting remedies or demonstrate that stronger controls are in use.

Put the fixes on the record

The Board should explain who was responsible for setting cost limits, why the contract’s safeguards did not operate as intended and how design changes were approved. It should say what the independent audit will examine, when its findings will be released and how it will consider any appropriate remedies the review identifies.

Oversight must not imply that someone committed a crime without evidence. Nor should the Fed have to treat every cost change as proof of mismanagement. But those cautions do not justify asking the public to accept promises without a way to check them.

Our position is that the Board should publish a dated, public action plan for all seven inspector general recommendations, naming the office responsible for each correction and when progress will be reported. It should update that plan as the audit and General Services Administration advice come in. That would let the public judge the Fed’s stewardship by what changes, not merely by what its watchdog did not find.