The $2.5 billion overhaul at the heart of the DOJ’s criminal probe into the Federal Reserve

Federal Reserve Headquarters Renovation Draws Political Scrutiny

People pass by the Marriner S. Eccles Federal Reserve Board Building as it undergoes renovations in late July.

Justice Department Investigates Fed Headquarters Project

The Department of Justice recently issued subpoenas to the Federal Reserve as part of a criminal probe, focusing on the extensive renovation of the central bank’s main offices in Washington, D.C.

The controversy extends beyond the project’s multi-billion dollar budget. Critics argue that the White House is leveraging the renovation to exert influence over the Federal Reserve, an institution intended to function independently from the executive branch.

Political Tensions Over Cost and Independence

The debate over renovation expenses has intensified as former President Donald Trump has publicly criticized Fed Chair Jerome Powell, urging him to lower interest rates and, more recently, questioning the project's price tag.

While Trump’s pressure on Powell regarding monetary policy has been ongoing, his focus on the renovation’s cost has only emerged in the past half-year.

Historic Buildings at the Center of the Project

The renovation encompasses two significant structures: the Marriner S. Eccles Building, completed in 1937, and the 1951 Constitution Avenue Building, which dates back to 1932 and was officially transferred to the Fed in 2018.

The Eccles Building, situated at 20th Street and Constitution Avenue N.W., offers views of the National Mall and is located just a few blocks from the White House.

Project Approval and Scope

The Federal Reserve Board approved the current renovation plan in 2017, when Powell was a board member but not yet chair. Since then, the project has undergone annual budget reviews by Fed leadership.

According to the Fed, the renovation involves a comprehensive overhaul of both buildings, which have not seen major updates since the 1930s. The work includes removing hazardous materials like asbestos and lead, replacing outdated electrical and plumbing systems, upgrading HVAC, and reinforcing the structures to meet current building codes.

The total cost, projected at $2.5 billion with completion expected in 2027, is funded by the Federal Reserve itself—not by taxpayer dollars.

Unlike most federal agencies, the Fed covers its own expenses through income generated from interest on government securities and fees charged to banks, with any surplus returned to the U.S. Treasury. This funding model keeps public funds out of the renovation.

Criticism and Defense of the Project

Despite this, Trump and his supporters have accused the Fed of overspending and poor financial management.

The Federal Reserve has countered these claims, explaining that the age and historic status of the buildings have contributed to rising costs. Both buildings are recognized as historic sites, requiring coordination with multiple preservation agencies and resulting in design changes.

Fed officials also cite increased labor and material expenses since 2017, as well as supply chain disruptions from the COVID-19 pandemic and tariffs imposed during Trump’s administration.

Some Trump allies, including former Office of Management and Budget Director Russell Vought, have called for more oversight of the renovation.

Congressional Inquiry and Public Debate

During a Senate hearing in June, Senator Tim Scott questioned Powell about the renovation, alleging extravagant spending on features such as rooftop terraces, custom elevators, marble finishes, and a private art collection.

Powell refuted these claims, clarifying that there are no new luxury amenities, only restoration of existing materials and necessary updates to aging infrastructure.

In July, Vought sent a letter to Powell, reiterating concerns about the project’s management and referencing features that Powell had already denied existed. Vought later suggested an investigation was needed to determine if Congress had been misled about the project's costs.

Powell responded in writing, emphasizing that the Fed has maintained strict oversight of the renovation throughout its duration.

Presidential Visit Highlights Ongoing Dispute

The renovation drew even more attention when Trump made a rare visit to the Federal Reserve headquarters in July, the first sitting president to do so in nearly two decades.

Trump and Powell toured the site together, answering questions from the press. During the visit, Trump claimed the renovation’s cost had ballooned to $3.1 billion, but Powell corrected him, explaining that figure included a separate, previously completed project.

Later, Trump expressed a desire to see the renovations completed, acknowledging the project’s lengthy timeline.

“I don’t want to be personal,” Trump remarked. “And in many ways, it’s too bad it started, but it did start. And, it’s been under construction for a long time.”

Despite the focus on the renovation, Trump reiterated his primary concern with the Fed: lowering interest rates.

When asked what he wanted from Powell, Trump replied, “Well, I’d love him to lower interest rates.”

This article is based on reporting originally published by NBCNews.com.