Keeping in line with Republicans' promises of more scrutiny of the Consumer Financial Protection Bureau (CFPB), U.S. Representative Jeb Hensarling (R-Texas) has written a letter urging the CFPB to abandon plans to renovate its office building in favor of more cost-effective alternatives.
Hensarling addressed the letter, dated January 12, 2015, to CFPB Director Richard Cordray, Comptroller of the Currency Thomas Curry, and U.S. General Services Administrator Daniel Tangherlini. In the letter, Hensarling called plans to renovate the building located at 1700 G Street NW in Washington, D.C. a "$215.8 million federal boondoggle" that is "now well over budget and well behind schedule."
A spokesman from the CFPB said, "We have received the letter and are reviewing it." A spokesman from OCC declined to comment, as did a spokesperson from GSA.
Republican lawmakers, who gained a majority in both the House and Senate in November's elections, have repeatedly called for more oversight for the CFPB and demanded that the Bureau be made accountable to Congress. The CFPB was created in 2010 as part of the Dodd-Frank Wall Street Reform Act and is funded by the Federal Reserve. Hensarling, who was recently elected to a second term as Chairman of the House Financial Services Committee, has been one of the CFPB's most vocal critics, saying that it is too powerful because it does not have to answer to Congress.
The building that houses the CFPB is owned by the Office of the Comptroller of the Currency, which chose to rent the building out to the CFPB starting with the Bureau's inception in 2010 rather than sell it when Ernst & Young valued the building at $153.7 million, Hensarling wrote. In the letter Hensarling questioned the OCC's motives for renting the building to the CFPB and said he wrote a letter to Cordray last June demanding to know who made the decision to renovate the building, but is still awaiting an answer.
The current estimate to renovate the building, $215.8 million, has more than doubled since the original estimate of $95 million was issued.
"If the OCC were responsible for the renovation costs, it would presumably have to raise the necessary funds by assessing national banks and federal savings associations," Hensarling wrote. "But under the Dodd-Frank Act, the Bureau can draw down funds from the Federal Reserve System (Fed) no questions asked. Thus, the Bureau and the OCC appear to have colluded to effectively offload renovation costs onto the Fed. However, because every dollar spent by the Bureau is one less dollar that the Fed can remit to the U.S. Treasury to reduce the deficit, renovation costs paid by the Fed are ultimately borne by U.S. taxpayers."
Hensarling said the firm signaled "grandiose intentions" for the renovations by hiring Skidmore, Owings & Merrill, an architecture firm known for building luxury skyscrapers, and the plans, which were all approved by the Bureau, included "opulent" features such as a "green roof," a four-story glass staircase, and a "water wall of naturally split granite" with water cascading down into a sunken garden "terminating into a raised splash pool."
The letter concluded with Hensarling offering four recommendations: Abandon the "wasteful" renovation plans, dissolve agreements the Bureau has with both the OCC and GSA, move the Bureau into more cost-effective office space, and sell the building to the highest bidder. Hensarling said following these recommendations would save taxpayers approximately $100 million and provide additional revenue when the building is sold, and allow the OCC and Bureau to focus more on their core missions.
"The American people expect federal agencies to be responsible stewards of the funds entrusted to them, yet all too often Washington bureaucracies waste their tax dollars by making political decisions in fiscal matters without conducting due diligence and without adequate transparency and accountability," Hensarling wrote. "Recent delays provide your agencies with an opportunity re-evaluate your renovations plans and change course. I trust that you will make the responsible financial decision."