In an unprecedented legal move, Fed governor Lisa Cook has hired lawyers to sue the former President Donald Trump. As such, she is actively challenging his move to terminate her from her post. Cook is a full voting member of the powerful 12 member Federal Open Market Committee which decides short term interest rates in the U.S. He explains how Trump’s action is both unprecedented and unlawful.
It was Trump’s false claim that set the lawsuit in motion. Friedman contended that there was “adequate cause” to suspect Cook had committed perjury on her mortgage applications. He invoked his constitutional authority to remove executive branch employees of the government as legal justification for trying to remove her from her job. Cook, on the other hand, has staunchly denied wrongdoing and claims that no legal ground for her termination can be found.
Cook is the first of seven members on the Federal Reserve’s board of governors. He is one of the most important influences on monetary policy in the entire U.S. government. She just voted to keep interest rates unchanged. She was with Fed Chairman Jerome Powell and other committee members on that choice at the last rate-setting convening. Her expertise on the board has been invaluable, particularly in the face of protracted economic uncertainty.
“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would be the first of its kind in the Board’s history.” – Abbe Lowell
The real Cook controversy Although some might point to the scandal Trump claims she committed by falsifying her mortgage applications. He argued that such allegations warranted her removal from the board that oversees the nation’s financial institutions. Cook’s lawsuit doesn’t touch these mortgage allegations directly. Rather, it tries to short circuit the process by going to court and challenging the legality of Trump’s firing order.
Lowell took issue with Trump’s logic at almost every turn. He concluded that speculative claims regarding private monetary damages can’t support a dismissal under the Federal Reserve Act.
In her lawsuit, Cook has made Fed Chairman Jerome Powell a named defendant. She is asking the court to rule that Trump’s order of dismissal for her is “unlawful and void.” The legal battle has garnered attention not only for its implications regarding Cook’s career but for its potential impact on the Federal Reserve’s independence.
“It would subvert the Federal Reserve Act … which explicitly requires a showing of ’cause’ for a Governor’s removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not.” – Abbe Lowell
Trump’s claims are incendiary. Perhaps most important to note is the fact that there have not been any official criminal charges yet brought against Cook. It isn’t clear that she is even a target of any investigation tied to the allegations Trump makes.
Cook unequivocally declared that “there is no legal basis” for her removal. This statement bolsters her position in the marquee legal fight, at least. This case has the potential to set a new precedent for the fair treatment of Federal Reserve governors. It could have an outsized effect on presidential control of their appointees down the line.
As this legal saga plays out, both sides are clearly digging in their heels. Trump’s administration maintains that there were legitimate reasons for considering Cook’s removal, while Cook and her legal team argue that such actions represent a dangerous overreach of presidential power.
As this legal saga unfolds, both sides remain firm in their stances. Trump’s administration maintains that there were legitimate reasons for considering Cook’s removal, while Cook and her legal team argue that such actions represent a dangerous overreach of presidential power.