The Trump administration has reportedly asked the Supreme Court to allow the president to fire Federal Reserve Governor Lisa Cook as part of an ongoing legal battle that could redefine presidential power over independent federal agencies.
Trump fired Cook back in August, citing allegations of mortgage fraud that she allegedly committed before she joined the Fed. A lower court in a divided ruling blocked her removal soon after. Judge Jia Cobb argued that Trump could not fire Cook for “conduct that occurred before she became a Fed governor, nor for claims that do not involve her professional conduct,” according to the New York Times.
Judge Gregory Katsas dissented, insisting that President Donald Trump acted within his authority. “The president plainly invoked a cause relating to Cook’s conduct, ability, fitness or competence,” he wrote. “The allegations against Cook could constitute mortgage fraud if she acted knowingly, and that is a felony offense.”
The Justice Department argues that Cook’s firing is “an unreviewable exercise of the discretion Congress vested” in the president and questioned whether Cook “can be trusted to act with forthrightness, care and disinterest in managing the U.S. money supply.”
Cook’s attorneys countered by stating that firing her would destabilize markets and threaten the independence of the Federal Reserve. The Supreme Court has typically upheld Trump’s right to fire agency leaders. But in this case, it has signaled that the Fed could be different because it is a “uniquely structured, quasi-private entity that follow in the distinct historical tradition of the First and Second Banks of the United States.”
Meanwhile, the Justice Department opened a criminal investigation into Cook over the mortgage fraud allegations. It has issued subpoenas to ascertain whether she misrepresented her occupancy status on multiple properties. It is alleged that she listed several homes as “primary” residences when she did not live in them full-time to obtain more favorable loan conditions. Cook has denied any wrongdoing, claiming that her firing was motivated by politics.
A report published earlier this month threw more fire on the controversy by exposing the fact that Cook has been renting out some of her properties that she listed as her primary residence. Reporter Charlie LeDuff noted that she has a bank loan on a “secondary home in Massachusetts, which the Trump administration alleges she rents out full-time.”
However, Cook, in her lawsuit, contends that the Trump administrationå “concocted” grounds for her firing because he wished to reshape the Federal Reserve’s board and undermine its independence. She argues that she “has been deprived of her Fifth Amendment right to due process, and her right to process under the Federal Reserve Act.”
If the Supreme Court takes up the case and rules in Trump’s favor, it could drastically change the level of authority a president has over the Federal Reserve, allowing him to fire other members of the governor’s board.
Editor’s Note: Help us continue to report the truth about corrupt officials like Lisa Cook.
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