The Federal Reserve’s inspector general has found no evidence of criminal wrongdoing or administrative misconduct linked to a renovation project whose costs became central to Donald Trump’s campaign against former chair Jerome Powell.
The watchdog’s findings, released on Wednesday, followed a review of work on two historic Federal Reserve buildings in Washington DC. The project’s estimated cost has risen to about $2.4 billion, roughly $1 billion above its original budget.
“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 US attorney general,” the inspector general said.
Trump repeatedly cited the renovation as he attacked Powell during his time as head of the US central bank. He had also consistently pressed Powell to reduce interest rates.
A separate US Department of Justice investigation into the project and testimony given by Powell to Congress was closed earlier this year. A federal judge had agreed with Powell that the inquiries were a pretext for putting pressure on the Fed chair to lower rates.
Although the watchdog found no basis for a criminal referral, it identified significant failings in the Federal Reserve’s management of the works. The central bank did not establish an intended “guaranteed maximum price”, which would have transferred responsibility for cost overruns to the contractor.
The report also concluded that design elements criticised by the White House, including marble, water features and a garden terrace, “did not materially contribute” to the rising costs.
Cost overruns on government projects are common. Trump’s budget for construction of a ballroom at the White House has also doubled from its initial estimate.
