Supreme Court wary of Trump’s bid to fire Fed governor Lisa Cook
WASHINGTON— The Supreme Court held a skeptical hearing Wednesday on President Trump’s argument that, acting alone, he had the authority to remove Federal Reserve board chair Lisa Cook for a past error in a mortgage application.
A majority of the justices said they were not convinced that what Chief Justice John G. Roberts described as Cook’s “inadvertent error” justified Cook’s removal from the central bank’s board.
They also questioned Trump’s failure to secure his hearing.
Justice Brett M. Kavanaugh said that if the court upheld Trump’s assertion of absolute power, it would “undermine, if not dismantle, the independence of the Federal Reserve.”
“Is there anything to be afraid of at the trial?” Judge Amy Coney Barrett asked Trump’s Attorney General D. John Sauer this question. “Why don’t you give him a chance to defend himself?”
Trump tried to take control of the independent bank’s board because it did not lower interest rates as much and as quickly as he wanted.
He clashed with Federal Reserve Chairman Jerome Powell and threatened to fire him. More recently, Trump’s prosecutors said they were investigating Powell for possible criminal misrepresentations at a congressional hearing.
In August, Trump wrote on social media that he had “reason” to fire Cook after being told Cook may have committed mortgage fraud.
He bought homes in Michigan and Georgia in 2021, a year before President Biden appointed him, saying they would be his “principal residence.”
In response to the claim, Cook’s attorney said he told his mortgage lender that the Georgia property was a “vacation home” and not his primary residence.
Cook filed a lawsuit to retain his seat. A federal judge blocked his removal on the grounds that the alleged misconduct occurred before his appointment. The D.C. Circuit Court agreed in a 2-1 decision.
In September, Trump’s lawyers filed an emergency appeal with the Supreme Court, saying it was “yet another case of improper judicial interference with the president’s power to impeach.” They said the court should reverse the lower court decision and uphold Cook’s firing.
But in October the justices agreed to put Cook’s dismissal on hold and planned discussions on how to proceed.
Although the judges were skeptical of Trump’s claims on Wednesday, it was not clear how they would rule.
They may decide that Trump should give Cook a hearing and an opportunity to defend himself. Or they could rule more directly and say that an alleged misrepresentation on a past mortgage application does not rise to the level of “cause” to remove the chairman of the Federal Reserve board.
Representing Cook, Washington attorney Paul Clement, a former U.S. attorney general under President George W. Bush, told the court there is a “unbroken history” of treating the Federal Reserve board as independent.
“No president has ever tried to remove a governor for the sake of a cause,” he said.
And he said the court shouldn’t have started by supporting Trump’s bid to fire him without a hearing.
