President Donald Trump is urging the Supreme Court to let him fire Lisa Cook from the Federal Reserve over credible allegations of mortgage fraud.
The Trump administration is asking Chief Justice John Roberts to grant an emergency request to fire Cook while litigation continues.
So far, Cook has been protected by judicial intervention from Biden-appointed judges. The administration accuses lower courts of engaging in "judicial interference with the president’s removal authority."
Trump moved to fire Cook last month, citing evidence that she listed two different properties as her primary residence simultaneously on her mortgage applications.
Such an arrangement could be used to fraudulently obtain favorable loan terms. Cook has yet to provide any explanation for the discrepancy.
A lone circuit judge, Gregory Katsas, dissented from an appeals court decision on Monday that allowed Cook to remain for now.
“The president plainly invoked a cause relating to Cook’s conduct, ability, fitness or competence,” wrote Judge Katsas, a Trump appointee. “The allegations against Cook could constitute mortgage fraud if she acted knowingly, and that is a felony offense.”
The Trump administration argues that the Federal Reserve Act provides the president broad and "unreviewable" power to determine what constitutes "cause" for removal.
"Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself -- and refuses to explain the apparent misrepresentations," Trump's Solicitor General John D. Sauer wrote in his brief to the Supreme Court.
A district court judge appointed by Joe Biden, Jia Cobb, ruled that Cook cannot be fired over conduct that occurred before she joined the Fed in 2022.
"That rationale is so flawed that the D.C. Circuit did not adopt it and even Cook did not press it," Sauer wrote of Cobbs's logic.
The administration argues that lower courts are tying the president's hands with a dangerous theory that affords extraordinary due process to high-ranking federal employees.
"The lower courts’ primary theory is that principal officers are akin to teachers or lower-level civil servants and can thus claim a property interest and an entitlement to notice and a hearing before removal. This theory is untenable and would wreak havoc on sensitive presidential decision-making," Sauer wrote.
Trump's critics see his push to fire Cook as a threat to the political independence of the central bank, which has significant power over the U.S. economy.
Needless to say, the stakes in this case are high. It is unclear how the Supreme Court may see the matter, but the justices have taken a generally broad view of executive power, upholding Trump's firings of various independent agency heads. At the same time, the justices have hinted that the Fed is a special, “uniquely structured" entity.
