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Watchdog: Follow the Money

Congressmen fume at CFPB's lavish renovation expenses

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Watchdog,Richard Pollock,Federal Budget,CFPB,Waste and Fraud,Follow the Money,Budgets and Deficits

Renovation costs for the Consumer Financial Protection Bureau's headquarters building have doubled, soaring from $55 million to $95 million, the Washington Examiner has learned.

Such costs are at least twice the typical renovation expenses for the most luxurious commercial office space available in downtown Washington, D.C., according to architectural experts.

The $95 million is nearly double the $50 million allotted in the General Services Administration's 2013 budget for construction, acquisition and renovation for all federal buildings nationwide. The CFPB building was built in the 1970s.

Rep. Patrick McHenry, R-N.C., chairman of a House subcommittee investigating the project, said the costly renovation shows the CFPB is "absolutely a runaway agency."

The renovation rate for the 300,000-square-foot office building is $316 per square foot, double the $150-per-square-foot costs for renovating Washington's luxury commercial Class A office buildings with high-end restrooms, lobbies, elevators, hallways and office suites.

Last September, the agency retained the prestigious Chicago-based architectural firm of Skidmore, Owings & Merrill for $7.2 million, according to federal contracting databases.

The agency initially buried the cost explosion in an April 2013 budget document that received little notice.

At a June 18 subcommittee oversight hearing, Stephen Agostini, the CFPB's chief financial officer, only told lawmakers about the renovation costs when asked by Rep. Sean Duffy, R-Wis.

Duffy said CFPB officials gave him a document just before the hearing that included the outdated $55 million figure. "I was stunned," Duffy said of his reaction on hearing the true cost.

"Congressman, we are at the early stages of understanding what it would cost to renovate a building that is 30 years old," Agostini said. "We have floors at 1700 G Street where we cannot run telephone lines, run electrical lines, run computer lines, because when the building was built it was not anticipated they would use those things."

Duffy said he was stunned by that comment: "My jaw dropped to think he wants us to believe there's no phone lines in the building."

The building's previous occupants -- the Office of Thrift Supervision and the Comptroller of the Currency -- both required telephones and other sophisticated information technology equipment.

A CFPB spokesman claimed the $55 million figure predated the bureau's renovation planning: "These amounts were based on estimates that had previously been provided to the prior occupant of 1700 G Street by a consultant that they had hired."

The business development team of OTJ Architects, a nationally recognized architecture and interior design firm, told the Examiner that the $316-per-square-foot estimate was twice the $150-per-square-foot rate for a high-end Class A building.

Twenty-six federal agencies have turned to OTJ for architectural services, including the GSA, the Department of Defense and the Department of Homeland Security.

A CFPB spokesman said the bureau has not given anyone in Congress any specific renovation budget numbers, even though lawmakers from both the House Financial Services and the Senate Banking committees have requested them.

"The question is, why does it need to be a secret?" said Tom Schatz, president of the nonpartisan government watchdog group Citizens Against Government Waste.

"Is there something involving national security or some kind of 'black budget' that we can't get this information? This is not the CIA," he said.

The Dodd-Frank financial reform law that established the consumer agency exempts it from congressional oversight.

That means that "by design, it is deeply flawed and unaccountable," McHenry told the Washington Examiner.

Rep. Al Green, D-Texas, the ranking minority member of the subcommittee, did not return a reporter's telephone call seeking comment.

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