DoJ declines to reopen investigation into former Fed chair Jay Powell

The US Justice Department has declined to reopen a criminal investigation into former Federal Reserve Chair Jerome Powell regarding cost overruns on the central bank's building renovation project. A Justice Department spokesperson confirmed this decision on Friday. While the department is not reopening the criminal probe, Attorney General Todd Blanche stated that they have not ruled out further examination of the project's oversight and potential action if evidence of wrongdoing emerges. The Fed's inspector general previously found no grounds for a criminal referral or evidence of administrative misconduct related to the cost overruns, though lax oversight was noted. Powell remains a Fed governor and had previously stated he would not leave the board until the investigation concluded with transparency.

The Federal Reserve's inspector general has concluded that there was no criminal wrongdoing or administrative misconduct related to a costly renovation project of two Fed buildings in Washington, D.C. This project, which ran approximately $1 billion over its initial budget, reaching an estimated $2.4 billion, had become a focal point of former President Donald Trump's criticism of former Fed Chair Jerome Powell. The watchdog's findings, released Wednesday, stated there were no grounds to believe federal criminal law was violated. While the inspector general identified shortcomings in the Fed's project management, such as the failure to establish a guaranteed maximum price, it found that criticized design features did not significantly contribute to the cost overruns. A previous Department of Justice investigation into the project and Powell's testimony was closed earlier this year.

The Federal Reserve's inspector general has concluded that the agency broadly mismanaged a $2.4 billion building renovation project, leading to significant cost overruns. The IG's report found no criminal violations, contrary to allegations made by Trump administration prosecutors. The mismanagement stemmed from the board of governors failing to secure a comprehensive cost estimate or a maximum overall cost at the project's outset, which began in 2022. This allowed construction contractor costs to increase due to inflation. A design change in 2023 from open workspaces to closed offices also caused delays and prevented the establishment of a cost ceiling. The renovation, initially estimated at $921 million, is now projected to cost over $2 billion and extend until late 2027.