Just on the day the July labor report turned out to be a disaster, with a loss of 23,000 jobs, the White House busted out the antidote to change the conversation.
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So official sources spread that President Donald Trump is “considering” removing Federal Reserve Governor Lisa Cook, reactivating an attempt that had been frustrated by the Supreme Court last June. He has it in his sights and if there is one thing the U.S. president does not accept, it is a no to his decisions
In a letter addressed to Cook and dated Wednesday, Dan Scavino, White House presidential advisor, stated that there are “sufficient grounds to believe that you made false statements in one or more mortgage contracts.”
These are the same accusations that Trump and his allies raised when he first tried to remove Cook from the Fed board a year ago. Cook denied the charges and filed a lawsuit challenging her removal.
A federal court blocked Cook’s dismissal while her lawsuit was pending resolution. Subsequently, in one of its last rulings of this judicial session, the U.S. Supreme Court, by a vote of five justices to four, upheld that decision against the appeal filed by the president.
However, Chief Justice John Roberts noted that the court’s decision did not prevent Trump from trying again to remove Cook based on the mortgage fraud allegations. Roberts wrote that any new removal attempt would require additional steps to ensure Cook’s right to due process, as established by the Constitution, and that Trump bypassed this in his first attempt.
This is because the Supreme Court did not rule on the merits of the accusations against Cook and, in practice, left the door open for Trump to try to remove her.
“Only after Cook has had the opportunity to respond to the accusations made against her (…) can a final decision be made,” Roberts wrote. “And only then can the courts assess the validity and sufficiency of such accusations,” he clarified. After the decision, Trump assured on social media that he would immediately take the appropriate measures to remove Cook.
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Scavino, Trump’s deputy chief of staff and director of the Presidential Personnel Office, explained that he sent the Wednesday letter “in accordance with the Supreme Court’s opinion.” He also urged Cook to submit, within three weeks, “an explanation of her false statements and the corresponding evidence,” in wording that, without trial or anything, already assumes fraud that the governor has denied and has provided documentation for.
Abbe Lowell, Cook’s lawyer, told CNBC that the accusations “lack today the same basis as a year ago, when President Trump tried to remove Governor Cook and interfere with the Federal Reserve’s independence.”
“Whatever President Trump does next, one thing is clear both in light of the facts and Supreme Court jurisprudence: there is no valid cause to remove Governor Cook,” Lowell emphasized. “As we did before, we will challenge this new pretext and defend her position and the historic role of the Federal Reserve,” he insisted.
The Fed declined to make official comments on the letter sent by the White House. Trump’s first attempt to remove Cook, appointed by former President Joe Biden, occurred when he intensified his pressure campaign on the Federal Reserve to lower interest rates.
The mortgage-related accusations were made by the director of the Federal Housing Finance Agency (FHFA), Bill Pulte, who has been labeled a “attack dog” in service of Trump.
Pulte has made similar accusations against other high-ranking Democrats, without any proof so far that they were true.
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