On Thursday, the Trump administration urged the federal court of appeals to set interest rates in anticipation of a significant meeting next week aimed at removing Lisa Cook, a member of the Federal Reserve.
This request came just days after a federal judge temporarily halted her removal, prompting the Department of Justice to seek a suspension of that order, claiming Cook’s removal attempt was illegal.
The government asked the court to grant the Federal Open Market Committee control by Tuesday, suggesting that on Monday it could direct open market activities.
“That extraordinary order against the exercise of the President’s authority is based on a series of legal errors and should remain pending appeal,” DOJ attorney Daniel Aguilar noted in an emergency filing.
Trump’s announcement of Cook’s removal was reportedly based on mortgage fraud allegations related to a referral from the Federal Housing Finance Agency (FHFA).
On Tuesday, U.S. District Judge Jia Cobb ruled that Cook’s removal likely violated legal provisions. She stated that dismissals involve complex legal issues, and the “best reading” of the law suggests that one cannot be removed for actions predating their appointment or for failing to fulfill their duties.
“Therefore, ‘for a cause’ does not simply mean removing someone for something done before they assumed office,” Cobb remarked in her detailed 49-page ruling.
Cook’s attorney, Abbe Lowell, contended that she could not be dismissed due to mortgage information that arose during her vetting process, arguing that any alleged inconsistencies had already been disclosed to the Senate and the White House prior to her confirmation in May 2022.
He insisted that she “never committed a mortgage scam.”
In its filing on Thursday, the Justice Department claimed that the court was “fundamentally wrong” in determining that Trump had no justification for Cook’s removal.
This assertion follows an alleged crime introduced on August 15, where FHFA director Bill Prute contended that Cook misrepresented properties in Michigan and Georgia in 2021. Cook maintained that she referred to one property as a “second home,” despite previously labeling it as an investment property in government documents.
“As Alexander Hamilton pointed out regarding the US Bank, the predecessor of the Federal Reserve, its leadership must be trusted with a strong sense of ‘facility prosperity’ for effective management,” the lawyer stated.
“If a governor undermines that foundation of trust through fraud or significant negligence, the president may justifiably act to remove them,” he added.
Cook’s lawsuit asserts that her dismissal is a result of Trump’s desire to exert greater control over the Federal Reserve, particularly as the central bank has been hesitant to lower interest rates amid trade uncertainty and market fluctuations. Federal Reserve Chairman Jerome Powell has faced consistent criticism from Trump, including threats of dismissal.
The Hill reached out to Lowell for a comment.
