The Wall Street Journal's editorial board says a new watchdog report has ended President Donald Trump's criminal pursuit of Jerome Powell.
In an editorial published on Wednesday, the board wrote that the Federal Reserve inspector general found poor management but no criminal conduct in the central bank's headquarters renovation. It also called on the former Fed chair to step down from the board of governors.
Fed Inspector General Michael Horowitz released his report Wednesday. It examined cost overruns on the renovation of the Marriner S. Eccles Federal Reserve Board Building and an office complex across the street. The project was budgeted at $1.3 billion. The latest estimate has nearly doubled to $2.4 billion, and the work is running about three years behind schedule.
"You've heard about this because President Trump tried to exploit the cost overruns and delays to concoct a governance crisis at the Fed," the board writes. "The report now offers reassurance that Mr. Powell is in the legal clear."
In January, the Justice Department issued a criminal subpoena to Powell, then the Fed chair, over testimony he gave Congress about the project that the Trump administration claimed was inaccurate. The board wrote that Trump was hoping to force Powell out of the chairmanship before his term ended.
Horowitz's report undercut that effort. His office found no "reasonable grounds to believe that a violation of federal criminal law had occurred." It also found no administrative misconduct.
The board still faulted the Fed's handling of the job and "changing crucial elements of the design." The Fed tried to adopt a contract type that pushes the risk of overruns onto the builder, the board wrote, but locked it in so early in the design process that the contractor couldn't estimate key costs, which undid the protection.
The board argued that Powell's exit would help calm the political fights that have entangled the Fed and leave the central bank free to focus on monetary policy.
"This is a political opportunity," the board wrote. "This clears the path for Mr. Powell to resign in line with tradition and do his part to de-escalate the unhelpful political battles that have ensnared the Fed."
