The Federal Reserve governor’s job is safe for now.
Donald Trump was hit with a legal smackdown after trying to remove Federal Reserve governor Lisa Cook.
Cook can stay in her job, a federal judge ruled in Washington, D.C., blocking Trump’s unprecedented attempt to boot her using allegations of mortgage fraud.
She will now be present at the Fed’s Sept. 16 meeting, but Cook’s trouble with Trump is not yet over.
“President Trump has not identified anything related to Cook’s conduct or job performance as a board member that would indicate that she is harming the board or the public interest by executing her duties unfaithfully or ineffectively,” U.S. District Judge Jia Cobb said after issuing a preliminary injunction.
The judge also ruled that removing Cook caused her “irreparable harm” and that the president had likely violated her procedural right to due process by posting his letter to her on social media.
The Daily Beast has contacted the White House and the Federal Reserve for comment.
Trump posted a public termination letter on his Truth Social account last month, addressed to Cook, who was confirmed by the Senate in 2022 as the first Black woman to serve as a Federal Reserve governor.
His post contained allegations that Cook had committed mortgage fraud, claims that predated her time on the board, and said she was being removed from her position “effective immediately.”
At the time, Cook released her own statement, claiming Trump had “no authority” to fire her. She added, “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Cook hired lawyer Abbe Lowell, who said in a statement last month that Trump’s “demands lack any proper process, basis or legal authority” and they would take whatever actions were necessary to prevent “his attempted illegal action.”
Governors can only be removed by a president with a valid reason for termination, known as “for cause.” Otherwise, they serve in long, fixed roles to add to financial stability. Cook, who was nominated to the post by Joe Biden, is not due to finish her current term until 2038.
The preliminary injunction Judge Cobb granted on Tuesday also found that Trump had likely violated the Federal Reserve Act by using social media to air his allegations about her mortgage fraud and also to fire her in public.
“The court is highly doubtful that Cook should have been required to piece together the evidentiary basis for a ‘for cause’ removal from a scattered assortment of social media posts and news articles,” Cobb wrote. “Even if the notice provided had been sufficient, Cook’s due process rights were nevertheless likely violated because she was not given a ‘meaningful opportunity’ to be heard.”
Cobb also barred Reserve Chair Jerome Powell or Fed officials from carrying out Trump’s wishes of firing Cook.
“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Cook’s counsel Lowell said in a statement.
“Allowing the president to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law.”
He added, “Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
Trump did not answer a reporter’s question about a court overruling his firing when he was leaving a seafood dinner on Tuesday.
However, White House deputy press secretary Kush Desai told Politico that Trump’s firing of Cook was “lawful” and boosted accountability for the body that sets interest rates.
“The president determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” Desai said.
“The removal of a governor for cause improves the Federal Reserve board’s accountability and credibility for both the markets and American people.”
Judge Cobb’s ruling said this was the first purported “for cause” removal of a governor in the 111-year history of the Federal Reserve.
In her finding, Cobb said Trump’s attempt to remove Cook “was done in violation” of the “for cause” provision.
She said the best reading of that provision was that it was limited to “actions relating to that governor’s ‘behavior in office.’” And because the allegations of mortgage fraud occurred before Cook’s role as governor, Cobb said that “for cause” did “not contemplate removing an individual purely for conduct that occurred before they began in office.”
Trump has also attempted to fire Powell this year, unhappy with his refusal to cut interest rates.
https://www.thedailybeast.com/trump-hit-with-fresh-court-blow-after-revenge-firing
