Watchdog finds no Fed misconduct in renovation; Trump calls for Powell's resignation
TLT•The Fed inspector general found no grounds for criminal referral or evidence of administrative misconduct in a renovation project now estimated at $2.4 billion, while identifying oversight deficiencies. Trump called for Powell to resign or face a lawsuit.
1. Watchdog findings
The Federal Reserve's inspector general said it found no grounds for a criminal referral or evidence of administrative misconduct tied to cost overruns in the renovation of two central bank buildings in Washington. The report said lax oversight contributed to a roughly $1 billion overrun and recommended corrective actions.
2. Project cost details
The project is estimated to cost about $2.4 billion. The report said the Fed did not establish the guaranteed maximum price intended to make the contractor responsible for overruns, and that plumbing and air conditioning ultimately cost $346 million, triple the initial estimate. It said marble, water features and a garden terrace did not materially contribute to the overruns.
3. Trump's response
Trump said Powell should resign from the Fed Board or be sued, and said he directed Attorney General Todd Blanche to study the report. Fed Chair Kevin Warsh said he would follow the recommendations and hire an independent auditor to verify awarded costs.
