The Trump administration is threatening to prosecute Federal Reserve Chair Jerome Powell over cost overruns at the U.S. central bank's Washington headquarters complex.
This is Trump's latest attack on Powell and a Fed that he wants to drastically cut interest rates. Earlier this year, the Fed's years long refurbishment of two historic buildings became a new source of pressure for Trump against Powell due to its cost, which has above initial projections.
These include the 1951 Constitution Avenue Building, finished in 1932 for the U.S. Public Health Service and utilized over the years for a variety of purposes, including housing the Combined Chiefs of Staff during World War II, and the Eccles Building, built between 1935 and 1937 as the Fed's headquarters.
In order to enable renovations that would "put a vacant building back in productive use, allow the Federal Reserve Board to consolidate several leases and result in savings for taxpayers," the first Trump administration handed it to the Fed in 2018. The National Register of Historic Places includes the 1951 Constitution Avenue Building.
The head of the Office of Management and Budget, Russell Vought, stated that the cost overrun was "700 million and counting" as of mid-2025. The project's current expected cost, according to the Fed's budget, is $2.46 billion, up from $1.88 billion in 2024 a difference of roughly $580 million.
The Fed has not yet released its 2025 budget data. According to the document, the Fed also decided against renovating a third building, saving roughly $510 million.
It boils down to three factors: unanticipated issues including lead pollution in the ground and higher than expected levels of asbestos; design modifications to protect the historic buildings and their appearance; and higher-than-expected labor and material expenses.
The buildings, which were constructed almost a century ago and have never been renovated, needed new plumbing, electrical, heating, water, and other infrastructure.
They also needed to be updated to accommodate people with disabilities, and one of the buildings needed a basement, while the other needed an addition to accommodate current employees who currently work in other leased offices.
According to the Fed, a new water feature was removed from the original designs for the 1951 Constitution refurbishment, and there is no VIP dining area or elevator reserved for governors. As Vought claims, "rooftop terrace gardens" do not exist.
According to planning records, one building's ground level front lawn serves as the ceiling of an underground parking structure known as a "garden terrace." Plans also mention "vegetated roofs" that improve building efficiency and stormwater discharge.
By law, the Fed is able to decide how much it will spend on capital projects. Its Office of Inspector General is tasked with performing a new review after receiving monthly reports on the project and conducting one in 2021.
On the project's design and development, the Fed spoke with several planning organizations, such as the National Capital Planning Commission and the Fine Arts Commission. The Fed claims that in order to save money, it made some minor adjustments to the initial plans.
