President Donald Trump has called on the U.S. Supreme Court to move forward with firing Federal Reserve Governor Lisa Cook.
The Justice Department on Thursday called on the judge to temporarily block US District Jia Cobb’s September 9 order from taking away Cook, the former Democratic president of former Democratic president Joe Biden.
Recommended Stories
List of 4 itemsEnd of the list
Cobb ruled Trump’s allegations that he committed mortgage fraud before Cook took office before he refused.
“The application includes yet another case of inappropriate judicial interference with the President’s removal authorities, where interference with the President’s authority to remove members of the President’s office for a cause,” the Justice Department said in its filing.
Cook attended the Fed’s highly anticipated two-day meeting in Washington on Tuesday and Wednesday. This was due to the central bank cut by a quarter of the points as policymakers responded to concerns about the decline in the job market. Cook was one of the votes in favour of the cuts announced Wednesday.
The Fed did not immediately respond to requests for comment. It previously said he would comply with the court’s decision, and during that time Cook will remain at her job.
The District of Columbia Circuit Court of Appeals denied the administration’s request to hold off Cobb’s order in a 2-1 ruling Monday.
Congress included provisions in the law that created the Fed to protect central banks from political interference. Under that law, the law does not define the term or establish a process for removal, but it may be removed by the President “for a cause.” No president has deleted the Fed governor. The law has never been tested in court.
Excuses to launch financial policy stances
Cook, the first black woman to serve as Fed governor, sued Trump in August after the president announced he was taking her away. Cook said Trump’s claims against her were an excuse to fire her for her financial policy stance without giving the president any legal authority to exclude her.
Trump’s bid to fire Cook reflects the broad view of the presidential forces he has argued since taking office in January. As long as the president has identified the cause of the removal, it is within his “unreviewable discretion,” the Justice Department said in a filing Thursday.
“Simply put, the president may reasonably determine that interest paid by the American people should not be set by a governor who appears to have lied to the interest rates he has set for him.
A spokesman for Cook’s attorney did not immediately respond to a request for comment.
Concerns about the Fed’s independence from the president in setting monetary policy could have ripple effects across the world economy.
Cook Legal Battle will affect the Fed’s ability to set interest rates regardless of politicians’ wishes. This is considered widely important to the ability of central banks to function independently to perform tasks such as managing inflation.
This year, Trump called for the Fed to actively cut, and denounced Fed Chairman Jerome Powell for his stewardship over monetary policy as the central bank focused on fighting inflation. Trump calls Powell “Numbskull,” “incompetent,” and “stubborn idiot.”
The administration has repeatedly asked the Supreme Court to intervene this year, allowing Trump’s policies to be implemented by lower courts. The Supreme Court, which has a conservative 6-3 majority, is on the side of the administration in almost every case that is being asked to review this year.
For example, the Supreme Court allowed Trump to proceed with the removal of various officials serving federal agencies established by Congress independent of direct presidential control.
But if Trump, two Democrats on the Federal Labor Commission rejected it in May, it signaled that the Fed was seen as different from other executives. The Supreme Court said the Fed is “a unique structured, semi-private organization.”
“Insufficient process”
Trump said on August 25 that he was removing cooks from the Fed’s board, citing allegations that he forged records to obtain favorable terms on his mortgage before joining the central bank in 2022.
In blocking the removal of Cook, the judge found that the 1913 law only allowed the Fed governor to be removed for fraud while in office. Mortgage fraud claims against Cook are linked to actions before the Senate’s confirmation in 2022.
The three Judge DC Circuit Panides on Monday lined up with the Cook side in their 2-1 decision, and they likely were denied a legitimate process in violation of the Fifth Amendment to the US Constitution.
“Before this court, the government has not objected to Cook’s failure to provide any meaningful notice or opportunity to respond to the allegations against her,” Judge Bradley Garcia wrote in the opinion added by Judge J. Michelle Childs. Both judges were appointed by Biden. Trump’s appointee Judge Gregory Cassas disagreed.
“The president notified the chef of the charges against her and waited five days for her to respond before she took her away,” the Justice Department said in a filing Thursday. “Cook cannot complain about the inadequate process because he refused to draw the president’s attention or challenge material facts.”
Trump and his appointee, William Plute, director of the Federal Housing Finance Agency, allegedly Cook inaccurately described three separate properties related to mortgage applications, which could have allowed her to get low interest rates and tax credits.
Trump’s Justice Department also launched a criminal mortgage fraud investigation to Cook and issued large juj court subpoenas from both Georgia and Michigan.
Documents reviewed by Reuters show that estimates of the Atlanta home loan that Cook purchased showed that she declared it as a “home of vacation,” according to information that appears to undermine allegations against her.
The filing Thursday did not mention that information or other reports from Reuters, which the Property Tax Authority in Ann Arbor, Michigan, said it had not violated property tax rules for its home.
