Why Did Trump Fire Lisa Cook?
Trump fired Cook because the government alleges she made misstatements on mortgage documents before she joined the Fed, listing her properties in Michigan and Atlanta as both being her “primary” residence. Trump has claimed that constitutes fraud and makes her unfit to serve on the Fed’s board, as it may have allowed her to obtain lower interest rates. Cook has denied any impropriety and described Trump’s allegations as “unsubstantiated” in court filings. Mortgage documents released as part of her litigation show Cook properly described her Atlanta property as a vacation home in other documents for her mortgage application, which her attorney Abbe Lowell argued makes it “impossible to conclude” she intended to commit fraud. Any suggestion in other documents that the property was a primary residence was “at most an inadvertent notation,” Lowell wrote in a letter to the Justice Department. Her firing would not be justified even if there were issues with her mortgage, her attorneys have argued, because she was not given proper due process to challenge her termination, and her personal mortgage application does not constitute professional misconduct.
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Key Background
Trump’s firing of Cook came as the president has long railed against the Fed in his second term in office, blasting former Fed chief Jerome Powell for not lowering interest rates as Trump wanted. Though the Fed did end up lowering interest rates under Powell, it was not as much as Trump had pushed for, and Trump repeatedly threatened to fire Powell before the former chair’s term expired in May. The Trump administration did launch a criminal investigation into Powell, however, which was allegedly into comments he made to Congress regarding the renovation of the Fed’s headquarters. Powell alleged the investigation was politically motivated because of his unwillingness to lower rates as Trump had wanted, saying in a statement revealing the probe that it was “a consequence of the Federal Reserve setting interest rather than following the preferences of the President.” The Trump administration ultimately dropped the investigation into Powell in April, as it threatened to derail current Fed chief Kevin Warsh’s Senate confirmation, though U.S. Attorney Jeanine Pirro has not ruled out that it could be reopened in the future.
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Further Reading
Supreme Court Suggests Trump Cannot Fire Lisa Cook—At Least For Now (Forbes)
Trump Asks Supreme Court To Let Him Fire Lisa Cook (Forbes)