The Federal Reserve's internal watchdog has concluded that former Chair Jerome Powell and other Fed officials did not break criminal laws in their handling of the central bank's multi-million-dollar renovation project. The report, released Wednesday, marks the end of a lengthy investigation into the matter.
Inspector General Michael Horowitz's office acknowledged that the Fed "has not effectively executed" the construction management risk contract for renovations at two of its Washington, D.C., buildings. However, the 121-page report found "numerous deficiencies" in project oversight, but nothing that rose to the level of criminal conduct.
"At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred," the report stated. This conclusion aligns with the findings of U.S. Attorney Jeanine Pirro's office, which conducted its own three-month investigation into Powell's actions.
The probe was initiated in April at the recommendation of Pirro, who oversees federal prosecutions in the District of Columbia. Powell has consistently defended his actions, suggesting that the investigation was a pretext to pressure the Fed into lowering interest rates—a move repeatedly urged by former President Trump.
Powell's critics have pointed to the renovation project as an example of mismanagement, while supporters argue that the investigation was politically motivated. The inspector general's report does not address these political dynamics, focusing solely on the management failures and the absence of criminal intent.
This development comes amid broader scrutiny of federal officials' conduct. For instance, the Commodity Futures Trading Commission has launched a probe into trades made by former Representative Adam Kinzinger, and the Senate is examining national security risks posed by autonomous AI agents. These investigations reflect a heightened focus on accountability in Washington.
While the watchdog's report clears Powell and his colleagues of criminal wrongdoing, it highlights significant lapses in the Fed's management of the renovation project. The central bank has pledged to implement recommendations to improve oversight and prevent future issues.
The report's release is likely to close this chapter for Powell, who stepped down as Fed chair earlier this year. However, the political tensions surrounding the investigation may linger, especially given the ongoing debates over monetary policy and the Fed's independence.
