Inspector general investigation discredits Trump’s claims about Federal Reserve renovations

The inspector general’s office at the Federal Reserve conducted a lengthy investigation into the building’s renovation project, but the internal watchdog concluded that there was no evidence the project crossed any legal lines — an outcome in direct odds with President Donald Trump’s repeated claims.

In a 121-page report, released to the public on Wednesday, the Fed’s inspector general conceded that the Fed board had not “effectively managed and executed its ‘construction manager at risk’ contract and repeatedly deviated from its cost-management provisions,” which led the watchdog office to present seven recommendations to address underlying concerns.

The findings nevertheless concluded that investigators “did not identify administrative misconduct” or any “reasonable grounds to believe that a violation of federal criminal law had occurred,” according to the report.

This is not the outcome the White House was hoping to see. Indeed, in January, the Justice Department launched a highly controversial criminal investigation into then-Fed Chair Jerome Powell, specifically focused on the central bank’s renovation project.

Around the time the news began to reach the public, Powell issued a roughly 2-minute video statement, speaking directly to the camera, confirming that Trump’s DOJ had served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment.

Powell also explained what appeared to be the obvious motivation behind the developments: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.”