Federal Reserve Chairman Powell Faces Perjury Charges Over $2.5 Billion Headquarters Renovation

Federal Reserve Chairman Jerome Powell is facing criminal charges after a referral to the Department of Justice (DOJ) by Rep. Luna. The charges stem from allegations of perjury related to the $2.5 billion renovation of the Federal Reserve headquarters. Luna's referral to the DOJ comes as the budgetary shortage and cost overruns of the project raise concerns about financial transparency and misrepresentation of the actual costs.

The controversy began when Luna sent a letter to the DOJ, accusing Powell of material differences between her testimony and the actual expenditures on the project. The headquarters, referred to as a $2.5 billion building, has been the subject of scrutiny due to the high cost overruns and the inclusion of luxury features such as rooftop gardens, marble decorations, water installations, and VIP exclusive elevators. The cost of $1,923 per square foot is more than twice the average refurbishment cost of historic government properties.

Opponents of the project have cited the $700 million cost overrun and the first deficit in the history of the Fed since FY23. Russell Vought, in a letter to Powell, highlighted the disconnect between official statements and the high-end components of the project. Vought compared the project to the Palace of Versailles, stating that it is time to reinstitute oversight with the Office of Management and Budget and the National Capital Planning Commission.

In response to the criticism, Powell claimed that there has been constant and intense monitoring of the project since its approval by the Board in 2017. He emphasized that the repair works will address fundamental health and safety problems, such as the removal of asbestos and outdated electrical and fire safety systems. Powell also stated that the original plans have been revised to reduce costs and shorten delays, denying the inclusion of marble, fountains, or a VIP elevator. He asserted that the majority of luxury features have been stripped away to save spending on essential repairs.

The renovation project, initially approved in 2017 at a cost of $1.9 billion, has since escalated to $2.5 billion. The increase is attributed to higher material prices, labor shortages, and extensive renovations in building codes. Premium features were permitted by the National Capital Planning Commission in 2021, but some have since been removed due to public scrutiny and congressional inquiries. Despite the scaling down, the project remains under legal and political pressure. President Trump has also criticized the project, stating that it is disgraceful and that Powell should resign if reports of lying are found to be true.

Powell has maintained that the project is well monitored and that the Federal Reserve is not under the orders of the National Capital Planning Commission but has voluntarily involved the commission in design issues. The political fallout over the renovation is mounting, with the Fed experiencing its first deficit since FY23. The controversy highlights the need for greater transparency and accountability in government spending, particularly in high-profile projects such as the renovation of the Federal Reserve headquarters.