Fed Watchdog Clears Powell of Criminal or Administrative Misconduct in HQ Renovation Saga

What the report found

The report sharply criticized project management: rather than set a cost ceiling, the Board kept raising the budget as costs escalated — a pay-as-you-go approach — with limited senior-leadership review of key decisions affecting budget or scope. The approved construction budget of $921 million in early 2020 had grown past $2 billion by the end of 2024, with the project now carrying a price tag of about $2.4 billion — roughly $1 billion in overruns. "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 U.S. Attorney General," the report concluded.

Reactions

Powell declined to comment. He has remained on the Board of Governors since May, when Kevin Warsh succeeded him as chair. Warsh concurred with the findings in a letter to the Inspector General and committed to following its project-management recommendations, plus hiring an independent auditor to "verify accuracy and compliance" of awarded costs. Notably, Powell was subpoenaed by the Justice Department in January over allegations he lied under oath about the cost overruns in June 2025 Senate Banking Committee testimony; he alleged at the time the criminal threats were punishment for setting rates "based on our best assessment of what will serve the public, rather than following the preferences of the president." Lawmakers' reactions split along party lines.

Sources: Reuters, CNN, September 30, 2026.