Politics & MoneyInvestments

Fed IG: CFPB office renovation skyrockets to $215 million

Documents missing, procedures skipped at bureau

The regulatory bureau that holds accountable all before them is being called to account for the hundreds of millions it is spending to renovate and decorate its rented headquarters on G Street.

A report from the Federal Reserve’s Inspector General shows that the cost of renovating the Consumer Financial Protection Bureau’s rented headquarters has spiraled to more than $215 million – $65 million more than the agency’s estimate just six months ago and $120 million more than last year’s estimate.

It also equals more than $590 per square foot being renovated at the CFPB.  That means the CFPB is spending much more per square foot than it cost to build the Trump World Tower ($334/square foot) or the Burj Khalifa in Dubai ($450/square foot), according to congressional leaders critical of the CFPB’s unchecked spending.

Just weeks ago, CFPB Director Richard Cordray described the building as "a dump" in testimony before Congress.

The renovation project has been mired in controversy and has brought criticism on the regulatory body even as House leaders try to rein in what they call overreach. 

Republicans have questioned CFPB officials about its rising cost, about why an agency that is renting a building is paying for renovations in the first place, and the extravagance of such features as a four-story glass staircase, two-story waterfall and sunken garden.

“When they passed the Dodd-Frank Act, Democrats in Congress and the White House made the CFPB unaccountable to taxpayers and to Congress.  We’re seeing the results of this dangerous unaccountability today in a Washington bureaucracy that is running amok, spending as much as it wants on whatever it wants.  It’s outrageous,” said Financial Services Committee Chairman Jeb Hensarling, R-Texas.

In addition to reporting on the project’s increasing cost, the Inspector General also notes:

  • The CFPB “was unable to locate any documentation of the decision to fully renovate the building.”
  • The CFPB failed to follow all of its own guidelines for gaining approval by its Investment Review Board for the building renovation. 
  • Because of this failure, “a sound business case is not available to support the funding of the renovation.”

Rep. Patrick McHenry, Chairman of the Financial Services Oversight and Investigations Subcommittee who requested the Inspector General’s report on the CFPB renovations, said the findings were a sign of a bigger problem at the bureau. 

"The findings of the Inspector General's investigation are deeply troubling and lead to even more questions about the unaccountable design of the CFPB.  The continuously growing price tag is a tremendous waste of funds and, amazingly, there is still no assurance the $216 million price tag won't grow higher,” McHenry said. “Now we learn the Bureau, presumably taking a page out of the IRS' playbook, has lost the documentation showing who actually gave final approval for this massive waste.  Coupled with recent accusations of discrimination and retaliation of employees by agency leaders, it has become abundantly clear that it's not 1700 G Street that needs an overhaul, but rather the entire structure of the CFPB."

While the Inspector General reports the current estimated cost of CFPB’s building renovation is $215.8 million, the building was appraised in 2011 for just $153.7 million, according to an audit report released by the Treasury Department’s Office of Inspector General in December 2013.

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