Is there an “insider”? Reports indicate that officials aligned with Trump strongly advocated for the controversial Federal Reserve renovation project.

Officials appointed by the Trump administration strongly advocated for the use of marble in the Federal Reserve’s headquarters renovation project five years ago, but this project has now become a point of criticism for White House against Federal Reserve Chairman Powell.

On July 18, media reported that the Federal Reserve initially proposed a glass curtain wall design for the renovation project, which aligns with the Federal Reserve’s belief that central banks “should become a more transparent organization.”

However, it was precisely the committee members appointed by Trump who strongly opposed the glass curtain wall proposal made by the Federal Reserve during a meeting in January 2020, believing that marble better reflects the “strength and permanence” of Financial Institutions, rather than the “transparency” that the Federal Reserve wanted to convey.

This revelation undoubtedly weakens the strength of the White House’s accusations. Wall Street On Air previously mentioned that in recent weeks, the White House has not let go of the Federal Reserve headquarters renovation project, accusing its costs of being over budget and using “ostentatious” materials, using this as the latest argument against Powell.

This is not a discussion about the Federal Reserve and its independence, but rather about a very poorly managed renovation project that has led to huge cost overruns.

Currently, the project’s budget has exceeded approximately $0.6 billion, to which Powell responded on Thursday that the project has been strictly monitored from the beginning, and steps have been taken to streamline processes to control costs.

Is there an “insider”? A “reversal” record from five years ago.

The core of this dispute—the use of marble—has the shadow of the Trump team behind it.

According to reports and the minutes from the meetings of the Commission of Fine Arts (CFA) established by Congress in 1910, the Federal Reserve initially proposed a glass curtain wall design as part of its headquarters renovation project.

According to the minutes of a CFA meeting in January 2020, the Federal Reserve believed that the glass design aligned with its idea of becoming a more transparent organization.

However, this proposal faced strong opposition from commissioners appointed by Trump. One of the commissioners, Justin Shubow, stated that glass appeared “temporary and fragile,” and that the Federal Reserve headquarters, as a bank building, should look “solid and eternal.”

He, along with other Trump-appointed commissioners, supported the demand for the Federal Reserve to include “Georgia white marble” in the next design submission.

Although this plan was voted down by commissioners not appointed by Trump at the time, documents show that six months later, the Federal Reserve’s architects returned with a new proposal that included marble. The renovation plan was ultimately finalized in 2021. Notably, Trump himself signed an executive order in 2020 requiring public buildings in the capital to adopt classical architectural styles.

Powell’s response and defense

In the face of fierce criticism from the White House, Powell responded later on Thursday evening.

In a letter, he stated that the Federal Reserve headquarters renovation project and its funding arrangements have been under strict oversight by the Board and its supervising bodies. He emphasized that the two buildings being renovated urgently need “significant structural repairs and system upgrades,” including addressing asbestos and lead contamination, as well as replacing outdated electrical, plumbing, and fire systems.

Powell explained that to streamline construction, control costs, and manage timelines, the Board subsequently canceled some upgrade projects from the plan submitted in 2021, believing that these changes do not require resubmission to the National Capital Planning Commission. Additionally, Federal Reserve Inspector General Michael Horowitz is already investigating the cost overruns.

Powell reiterated in the letter:

Since the Board first approved the project in 2017, we have been very cautious to ensure that it is well supervised.

Editor/danial