Jerome Powell was unequivocal: there would be no beehives, no terraced rooftop gardens, no new fountains, and no luxury marble finishes. There would be no special elevators or exclusive VIP dining facilities either.
That was the message the Federal Reserve chair delivered to Congress last June. While testifying at a monetary policy hearing, Powell was questioned by two Republican senators about significant cost overruns tied to the renovation of two historic Federal Reserve buildings, including the 88-year-old Marriner S. Eccles Building — the Fed’s pink-granite headquarters in Washington.
Those statements have now become central to an extraordinary criminal investigation involving the Fed chair. Critics allege Powell may have provided false testimony by denying that luxury enhancements contributed to the rising costs of the renovation. Powell, however, argues that the investigation is politically motivated, intended to punish him for not cutting interest rates aggressively enough.
The inquiry follows months of public criticism from President Donald Trump, who has repeatedly attacked Powell over the ballooning renovation costs and, more broadly, over his reluctance to lower rates.
“He’s billions of dollars over budget, so either he’s incompetent or he’s corrupt,” Trump told reporters Tuesday as he left the White House for an economic speech in Detroit. “I don’t know which one it is, but he’s certainly not doing a good job.” Trump, who originally nominated Powell as Fed chair in 2017, has said he has no knowledge of the criminal probe.
To date, Powell has not been charged, and the grand jury subpoenas issued to the Federal Reserve do not guarantee that an indictment will follow.
A review of Powell’s congressional testimony and public remarks regarding the renovation project shows how he has addressed allegations that costly, nonessential upgrades drove the project’s expenses higher.
Although Powell’s testimony primarily focused on inflation and interest rate policy, lawmakers also pressed him on why the headquarters renovation budget had increased by roughly one-third — from $1.9 billion to $2.5 billion.
‘Not Really Safe’
“The Federal Reserve has spent billions on lavish renovations to its Washington offices,” said Senator Tim Scott, the committee chair, in his opening statement at the hearing.
Scott cited reports describing rooftop terraces, custom elevators opening into VIP dining rooms, white marble finishes, and even a private art collection, while noting that the Fed “hasn’t generated a profit since 2022.”
Senator Mike Rounds of South Dakota echoed those concerns, telling Powell that Congress deserved a clear explanation when “we’re talking about billions of dollars in costs.”
Powell responded that while serving as an administrative governor before becoming chair, he came to realize just how badly the Eccles Building required a comprehensive renovation — something it had never previously undergone.
“It really wasn’t safe, and it wasn’t waterproof, among other issues,” Powell testified.
Scrapped Design Elements
Powell said media reports cited during the hearing were inaccurate. He stated there were no VIP dining rooms, no new water features, no beehives, and no rooftop terrace gardens included in the project. He also denied that new marble was being added, except in cases where existing marble had been damaged.
“I’m glad there aren’t any beehives,” Scott replied, “but we’re still going to figure out what they are.”
Scott argued that the alleged luxury elements were not limited to media reporting in outlets such as the New York Post or The Wall Street Journal, but appeared in the “final plans” published on the National Capital Planning Commission’s website.
According to the hearing transcript, Powell pushed back on what he described as misleading characterizations, particularly regarding claims of “special elevators.”
“It’s the same elevator that’s been there since the building was constructed,” Powell said. “Calling it special is inaccurate.” He added that some features referenced by critics were no longer part of the plans, which had continued to change over time.
Scott asked whether those design changes were made only after media scrutiny intensified in April, or whether such features had never truly been part of the project.
Powell said he would provide further details but emphasized that these disputed elements were not the primary drivers behind the cost overruns. In response to the controversy, the Fed later released a fact sheet and FAQ addressing the renovation.
According to the Federal Reserve, much of the increased cost stems from the difficulty of construction — particularly underground — on land that was once a swamp near the Tidal Basin and the Potomac River. The Fed also cited expenses related to asbestos and lead removal, as well as replacing outdated mechanical systems.
In a July letter to Office of Management and Budget Director Russell Vought, Powell provided additional explanation, stating that early designs calling for new water features were abandoned in favor of refurbishing existing fountains, and that VIP dining rooms were never part of the plan.
“There are no VIP dining rooms being built as part of this project,” Powell wrote. “The Eccles Building contains historic, multi-use rooms on the fourth floor that serve as conference spaces and for working meals. These rooms are being preserved and renovated.”
DOJ Referral
Several weeks after the Senate hearing, Republican Representative Anna Paulina Luna wrote to Attorney General Pam Bondi, arguing that Powell had failed to mention earlier renovation work carried out in 1993 and 2003. She also referenced the alleged luxury features highlighted by Senator Scott and called for an investigation.
“If Chairman Powell knowingly misrepresented these facts — either in congressional testimony or in formal correspondence with senior executive officials — such conduct could constitute perjury or materially false statements under federal law,” Luna wrote.
Powell addressed that criticism in his letter to Vought, stating that while periodic maintenance had been performed to keep the buildings usable, neither structure had undergone a comprehensive renovation since its original construction.
Mike Romano, a former federal prosecutor with the Justice Department’s Public Integrity Section, described the investigation as “highly unusual” absent evidence that Powell deliberately misled Congress for personal gain.
Romano noted that cases involving self-dealing or financial enrichment could justify scrutiny. “But testifying before Congress about why a construction project was necessary or how it was progressing — without any indication the person was lying to benefit themselves — makes it difficult to see why this would warrant an investigation,” he said.