Lisa Cook, governor of the US Federal Reserve, speaks at the Peterson Institute For International Economics in Washington, DC, US, on Thursday, Oct. 6, 2022.
Al Drago | Bloomberg | Getty Images
The Trump administration on Thursday asked the Supreme Court to lift lower court rulings that have blocked President Donald Trump from firing Federal Reserve Governor Lisa Cook.
The request, which was expected, came after Cook participated this week in a meeting of the Fed’s Federal Open Market Committee, which decided to cut its benchmark overnight lending rate by a quarter percentage point.
“This application involves yet another case of improper judicial interference with the President’s removal authority — here, interference with the President’s authority to remove members of the Federal Reserve Board of Governors for cause,” Solicitor General D. John Sauer wrote in the Justice Department’s application to the Supreme Court.
Trump first tried to fire Cook from the seven-member Fed Board of Governors on Aug. 25, citing allegations that she committed mortgage fraud.
Cook, who denies wrongdoing, sued Trump in an effort to block her removal, arguing he lacked the required legal cause to do so.
Sauer, in his application to the Supreme Court on Thursday, said “Cook had made contradictory representations in two mortgage agreements a short time apart, claiming that both a property in Michigan and a property in Georgia would simultaneously serve as her principal residence.”
“Each mortgage agreement described the representation as material to the lender, reflecting the reality that lenders usually offer lower interest rates for principal-residence mortgages because they view such mortgages as less risky,” Sauer wrote.
“When her apparent misconduct came to light, the President determined that Cook’s ‘deceitful and potentially criminal conduct in a financial matter’ renders her unfit to continue serving on the Federal Reserve Board, and at a minimum demonstrates ‘the sort of gross negligence in financial transactions that calls into question [her] competence and trustworthiness as a financial regulator,’ “Sauer wrote.
On Sept. 9, a judge in federal court in Washington, D.C., barred Trump from firing Cook as the lawsuit challenging her termination played out in that court.
The Trump administration then asked a three-judge panel on the federal appeals court in Washington to stay that order, and that the appeals court do so before the FOMC met.
The appeals panel in a 2-1 ruling on Monday night refused that request, effectively allowing Cook to remain in her job for now, and to participate in the FOMC deliberations.
If Trump ultimately prevails in firing Cook, he would be poised to have nominated four out of the seven Fed governors.
On Tuesday, the Senate narrowly confirmed White House Council of Economic Advisors Stephen Miran as a Fed governor. Trump nominated Miran to serve the remainder of Fed Governor Adriana Kugler’s term, which ends Jan. 31.
Kugler unexpectedly resigned in August, without giving a reason.
This is developing news. Check back for updates.
