Lisa Cook argues firing would transform Fed into ‘body subservient to the President’s will’
Federal Reserve Board of Governors member Lisa Cook implored the Supreme Court to keep her in her post while her lawsuit over President Trump’s attempt to fire her moves forward, contending that her removal would strip the central bank of its longstanding autonomy.
Her lawyers told the justices Thursday that siding with the Trump administration would “eviscerate” the Fed’s independence from the political whims of the White House, claiming its insulation from such control is what has allowed America’s markets and economy to flourish.
Lower courts have so far kept Cook in her role, but the Justice Department has asked the high court to put Trump’s firing over mortgage fraud allegations into effect.
“Granting that relief would dramatically alter the status quo, ignore centuries of history, and transform the Federal Reserve into a body subservient to the President’s will,” her lawyers wrote in a court filing.
Trump moved to fire Cook last month, pointing to a criminal referral from the Federal Housing Finance Agency that claimed she designated properties in Michigan and Georgia as both primary residences, a move that could result in lower mortgage rates. He’s the first president to try to fire a Fed governor.
Cook has denied wrongdoing, contending in court papers she “did not ever commit mortgage fraud,” and has not been charged with a crime.
Her lawsuit accuses Trump of cooking up a reason to remove her in order to take greater control of the Fed, pointing to the president’s long-held frustration with the central bank over its refusal to lower interest rates amid uncertainty around his trade agenda and the volatility of markets.
The Fed cut interest rates earlier this month for the first time this year, a vote in which Cook participated. The Trump administration filed its appeal to the Supreme Court after the key meeting.
She told the Supreme Court that the “bottom line” is that there must be “some meaningful check” on Trump’s ability to remove her from her position, or else any president could remove any governor over any allegation of wrongdoing, “however flawed.”
“That regime is not what Congress envisioned when it protected the Federal Reserve Board from presidential control. That regime is not what this Court envisioned when it went out of its way to single out the Board as a unique institution with a unique history of independence. And granting the President’s request for immediate relief to alter the status quo would sound the death knell for the central-bank independence that has helped make the United States’ economy the strongest in the world,” Cook’s lawyers wrote.
Notably, conservative legal heavyweight Paul Clement signed onto the filing as part of Cook’s legal team, which is led by Abbe Lowell, a longtime Washington attorney who has represented prominent political figures from both parties. Clement served as solicitor general in former President George W. Bush’s administration, with more than 100 Supreme Court arguments under his belt.
The Trump administration argued in its application to the high court that the lower courts’ decisions “flout many strands of this Court’s precedents.”
Earlier Thursday, more than a dozen of the most influential U.S. economic officials of the past three decades asked the justices in a friend-of-the-court brief to let Cook stay on the central bank’s governing board.