- Luna wants the DOJ to investigate Powell over the perjury of a $2.5B Fed HQ building project.
- Powell demands luxury features to be removed, attention remains on much needed repairs.
- The political fallout over the renovation is mounting; Fed is in a rare deficit.
Jerome Powell, Federal Reserve Chairman, faces criminal charges after a shocking D.O.J referral.The action, declared by Rep. Luna, escalates the debate on the 2.5 billion dollar re-modeling of the Federal Reserve headquarters as the budgetary shortage and cost overruns raise perjury allegations.
Source – X
The charges started when Luna sent Powell to the DOJ to look into her testimony regarding the exorbitant costs of the refurbishment project. According to Luna, there had been a material difference between Powell testimony and the facts of actual expenditures, the headquarters being called a building of 2.5BN, the financial transparency and misrepresentation on the real costs of the project being cited.
Deficit, Luxury Upgrades, and The Oversight Showdown
Opponents cite the high cost overrun of the renovation, $700 million, and the first deficit in the history of the Fed since FY23. It was said that the plans of the project are notable with rooftop gardens, marble decorations, water installations, and VIP exclusive elevators. The cost of $1, 923 per square foot is now over twice the average of the refurbishment cost of historic government properties.
The letter sent by Russell Vought to Powell pointed out the disconnection between official words and high-end components of the project. Vought stated, “The Palace of Versailles would have cost 3 billion dollars in current currency, it is time to reinstitute oversight with the Office of Management and Budget and the National Capital Planning Commission.”
Source: Powell’s response federalreserve.gov
Powell’s response followed sharp criticism. He claimed that there has been constant and intense monitoring of the project since it was approved by the Board in 2017 and stressed that the repair works will correct fundamental health and safety problems, such as the removal of asbestos and antique electrical and fire safety systems.
Powell explained that the original plans have been revised, and he said, “We downsized design features to reduce the cost and shorten the delays.” He denied marble, fountains or a VIP elevator and said, “The majority of luxury features are stripped away to save spending on essential repairs.”
Federal Reserve’s First Deficit Amid Renovation Backlash
This has been the first time that the Federal Reserve has been experiencing a deficit since FY23. Initially, the renovation was approved in 2017 at a cost of 1.9 billion dollars but this has escalated to 2.5 billion dollars. This increase is blamed on increased material prices, shortage of labor, and massive renovations in building codes. Premium features were permitted by the National Capital Planning Commission in 2021, but some of them have since been removed by the plans under the pressure of public scrutiny and inquiry by the congress.
The project is still under legal and political pressure even after the scaling down. President Trump has also added his voice to the matter stating that the project was disgraceful and that Powell should be resigning in case reports that he had lied were found to be true.
Powell repeated the same thing in his formal communications saying, “We have been very careful to make sure that the project is well monitored.” He also pointed out the unusual budget situation that the Fed is in when he said, “The Federal Reserve is not under the orders of the National Capital Planning Commission but we voluntarily involved the commission in design issues.”
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