Federal Reserve Governor Lisa Cook filed suit against President Donald Trump on Thursday, including Fed Chairman Jerome Powell and the Fed board as “Non-Presidential Defendants” in an effort to stop the president’s efforts to fire her.
Governor Cook is fighting to keep her seat on the board and “safeguard her and the Board’s congressionally mandated independence,” the suit stated. If Trump is successful in his attempt to remove her, he will have the capability of appointing a replacement, which would give him a majority on the board. The Fed responded to the claims on Tuesday, stating: “As always, the Federal Reserve will abide by any court decision.”
The suit follows Trump’s announcement on Monday that he was removing Cook from her position on the board — an unprecedented move in the central bank’s 112-year history.
Cook’s complaint observes that in the wake of Trump’s action, voices “from across the political spectrum have sounded the alarm that his actions threaten the historic independence of the Federal Reserve.”
Trump’s move to fire Cook followed posts on social media by Bill Pulte, the director of the Federal Housing Finance Agency (FHFA), announcing a criminal referral of Cook to the Department of Justice on Aug. 15 on allegations of mortgage fraud. Cook has not been charged with any civil or criminal violation.
Cook’s lawsuit, filed in a federal court in Washington, D.C., alleges the president’s “purported termination” of the governor “violate Governor Cook’s Fifth Amendment due process rights and her statutory right to notice and a hearing under the [Federal Reserve Act].”
The complaint continues: “Accordingly, Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work.”
“Even if the President had been more careful in obscuring his real justification for targeting Governor Cook, the President’s concocted basis for removal — the unsubstantiated and unproven allegation that Governor Cook ‘potentially’ erred in filling out a mortgage form prior to her Senate confirmation — does not amount to ’cause’ within the meaning of the FRA and is unsupported by caselaw.”
A further court filing was submitted later Thursday, seeking an emergency temporary restraining order. According to Cook’s lawyers, an unintentional “clerical error” may have been behind the mortgage dispute, Bloomberg reported. US District Judge Jia Cobb, who was nominated by former President Joe Biden, has set a hearing for Friday in Washington federal court on Cook’s request for a restraining order. The hearing is set for 10 a.m. eastern.
Trump and Pulte “have not even alleged explicitly that Ms. Cook benefited from any clerical error, or that such an error was intentional,” wrote Cook’s lawyers, led by Abbe Lowell, according to Bloomberg.
Pulte posted on social media soon after: “Breaking News: Lisa Cook confessed ‘errors;’ claims its clerical but still an error!”
He has continued to be active on social media, posting and reposting often about the Cook suit.
He also posted on Thursday: “Consistent with my responsibility to ensure a safe and sound housing market, I am submitting another criminal referral today for Mortgage Fraud. Like so many other mortgage fraud cases, this one likely involves Bank Fraud and Wire Fraud.”
He then followed that by stating “Contrary to media reports, I did not say that this was about any specific individual. Thank you.”