Trump officials want an investigation into the Federal Reserve’s $2.5 billion renovation

Allies of President Donald Trump are pushing for a full investigation into the $2.5 billion renovation of the Federal Reserve headquarters in Washington. They believe the ballooning cost could be linked to mismanagement or even fraud, and they’re not just looking at the money.

The political goal is clear: use the controversy to remove Jerome Powell from the top of the Fed. Trump has been furious at Powell for refusing to slash interest rates this year.

The renovation includes the 1937 Marriner S. Eccles Building and the 1931 East Building. Both are nearly a century old and have never undergone a complete renovation before. Officials from Trump’s administration are calling it wasteful.

Powell responds to Trump team’s accusations

Powell pushed back in a letter dated July 17. He said the renovations were being done transparently and clarified that the gardens were just green roofs for environmental compliance. The elevator extension was to meet accessibility standards. 

He also asked the Fed’s Inspector General to review the entire project. Powell explained to Congress in June that the Eccles Building was “not really safe” and “not waterproof,” and that he took on the project after realizing how bad the situation had gotten while he was still administrative governor.

Initial estimates for the renovation were around $1.9 billion, but the price jumped more than 30% after the start of construction. Steel prices spiked in 2021, which added to the cost. The project also got slowed down by several design review agencies.

Because these buildings are located in Washington’s “monumental core,” any construction must go through federal boards that control changes to historic architecture. That includes complying with tougher federal security codes added after the 9/11 attacks.

The hardest parts of this renovation are happening underground. Construction crews are digging deep to turn old parking garages into office space. Under the East Building’s lawn, a new parking garage with 318 spaces is being added.

A five-story extension on the East Building includes four floors that sit completely below ground. A lot of this is because buildings in DC can’t go too high, so developers go down instead. But what made things worse here is that the water table was higher than expected.

Berkel and Company Contractors had to physically lower the slab foundation of the Eccles Building to create the new basement. They used a bracing system to hold the building up while the floor was demolished and dropped over 20 feet.

The job needed 1,000 micropiles, steel foundation tools that are used when the soil is too soft for traditional supports.

Design delays and political friction stretch the cost

The Federal Reserve hired Fortus, a joint venture between Dutch firm Arcadis and DC-based Quinn Evans, to carry out the work. Arcadis focuses on water infrastructure and engineering, while Quinn Evans is known for restoring historic buildings.

Both firms have worked on massive projects before, including Detroit’s Michigan Central Station and the National Academy of Sciences. They told Bloomberg to contact the Fed directly. The Fed gave no response.

During the first Trump administration, the Fed wanted to use more glass in the new design. But Trump’s appointees to the U.S. Commission of Fine Arts shot that down. They insisted on a classical look, asking for white marble instead, which delayed the project even further.

Other DC projects faced similar problems. The Smithsonian’s African American History Museum, where 60% of the building sits underground, cost $540 million. That was 50% higher than expected. The 9/11 Museum in New York eventually cost $700 million, even after it was scaled down from $1 billion. A proposal to renovate the Smithsonian Castle with new underground support was scrapped when it reached $2 billion.

Mina Wright, who leads the GSA’s Office of Planning and Design Quality, told the National Capital Planning Commission in 2021 that the Fed’s team faced a brutal process. “They’ve been really put through their paces,” Wright said. “They’ve had some hostile criticism at one point that was unjustified.”

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