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| Trump accused of using mortgage fraud allegations as ‘weapon of choice’ to attack Fed | Trump accused of using mortgage fraud allegations as ‘weapon of choice’ to attack Fed |
| (1 day later) | |
| At hearing for Federal Reserve governor’s suit over firing, attorney says president engages in ‘litigation by tweet’ | At hearing for Federal Reserve governor’s suit over firing, attorney says president engages in ‘litigation by tweet’ |
| Donald Trump has been accused of wielding unconfirmed allegations of mortgage fraud as his “weapon of choice” to attack the Federal Reserve’s independence, as a governor at the central bank sues the president over his bid to fire her. | Donald Trump has been accused of wielding unconfirmed allegations of mortgage fraud as his “weapon of choice” to attack the Federal Reserve’s independence, as a governor at the central bank sues the president over his bid to fire her. |
| In court on Friday, lawyers for Lisa Cook argued she was fired without the notice or “cause” required to remove a Fed governor. Cook learned of her removal from the board via a post on social media, they said. | In court on Friday, lawyers for Lisa Cook argued she was fired without the notice or “cause” required to remove a Fed governor. Cook learned of her removal from the board via a post on social media, they said. |
| US district judge Jia Cobb is overseeing the case, which is widely expected to be ultimately decided by the supreme court. While it makes it way through the courts, Cook is seeking a temporary restraining order against Trump’s attempt to “immediately” dismiss her from the Fed’s board. | US district judge Jia Cobb is overseeing the case, which is widely expected to be ultimately decided by the supreme court. While it makes it way through the courts, Cook is seeking a temporary restraining order against Trump’s attempt to “immediately” dismiss her from the Fed’s board. |
| Cobb spent Friday’s hearing questioning the lawyers on what they believe constitute “cause” and “pretext” for the case. | |
| Abbe Lowell, Cook’s lawyer, said Trump and his ally Bill Pulte, director of the Federal Housing Finance Agency, fired her after they haphazardly accused her of mortgage fraud. Pulte, using his access to mortgage records, said Cook illegally claimed that she had two primary residences to get a better mortgage. | Abbe Lowell, Cook’s lawyer, said Trump and his ally Bill Pulte, director of the Federal Housing Finance Agency, fired her after they haphazardly accused her of mortgage fraud. Pulte, using his access to mortgage records, said Cook illegally claimed that she had two primary residences to get a better mortgage. |
| Lowell called the attack the administration’s “weapon of choice” after they tried to accuse the Fed chair, Jerome Powell, of fraud over recent renovations at the Fed. He pointed out Trump has been vocally opposed to the Fed’s policies on interest rates, even though the central bank is explicitly and historically a non-political institution. He cited a recent quote from Trump, who during a cabinet meeting Thursday said: “We’ll have a majority very shortly, and that will be great.” | Lowell called the attack the administration’s “weapon of choice” after they tried to accuse the Fed chair, Jerome Powell, of fraud over recent renovations at the Fed. He pointed out Trump has been vocally opposed to the Fed’s policies on interest rates, even though the central bank is explicitly and historically a non-political institution. He cited a recent quote from Trump, who during a cabinet meeting Thursday said: “We’ll have a majority very shortly, and that will be great.” |
| “These are not independent matters in this case,” Lowell said. “If all we have is a tweet, and it says ‘might’, ‘maybe’, ‘could’, ‘possibly’, ‘potentially’ – and there’s no notice, there’s no opportunity [to be heard], it’s all based on this litigation by tweet.” | “These are not independent matters in this case,” Lowell said. “If all we have is a tweet, and it says ‘might’, ‘maybe’, ‘could’, ‘possibly’, ‘potentially’ – and there’s no notice, there’s no opportunity [to be heard], it’s all based on this litigation by tweet.” |
| Meanwhile, justice department lawyer Yaakov Roth argued that, as president, Trump’s ability to remove federal officials is broad. | Meanwhile, justice department lawyer Yaakov Roth argued that, as president, Trump’s ability to remove federal officials is broad. |
| “Congress does not have the authority to restrict the removal of a federal officer,” Roth said. “There’s nothing in the president’s statements, either contemporaneous or after, that suggests that [Cook’s] removal was for any reason other than the reason given in the letter.” | “Congress does not have the authority to restrict the removal of a federal officer,” Roth said. “There’s nothing in the president’s statements, either contemporaneous or after, that suggests that [Cook’s] removal was for any reason other than the reason given in the letter.” |
| Cobb appeared to suggest a decision could come in coming weeks, after both sides present their case. | Cobb appeared to suggest a decision could come in coming weeks, after both sides present their case. |
| Early on Friday morning, Trump filed a request to the judge to deny Cook’s request. In its own filing, the Fed did not take a stance on the case but urged Cobb to make a “prompt ruling”. | Early on Friday morning, Trump filed a request to the judge to deny Cook’s request. In its own filing, the Fed did not take a stance on the case but urged Cobb to make a “prompt ruling”. |
| Trump wrote to Cook on Monday, telling her that he was removing her from her position “effective immediately”, based on the allegation from one of his allies that she had obtained a mortgage on a second home she incorrectly described as her primary residence. | Trump wrote to Cook on Monday, telling her that he was removing her from her position “effective immediately”, based on the allegation from one of his allies that she had obtained a mortgage on a second home she incorrectly described as her primary residence. |
| The president has spent months attacking the Fed, where most policymakers – including Cook – have so far defied his calls for interest rate cuts. He has spoken of rapidly building “a majority” on the central bank’s board, calling into question the future of its longstanding independence from political oversight. | The president has spent months attacking the Fed, where most policymakers – including Cook – have so far defied his calls for interest rate cuts. He has spoken of rapidly building “a majority” on the central bank’s board, calling into question the future of its longstanding independence from political oversight. |
| Firing Cook, whose term is not due to expire until 2038, would enable Trump to nominate a replacement. But Cook has argued the president has “no authority” to remove her. | |
| “An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],” her lawyers argued in the complaint. “President Trump’s letter purporting to fire Governor Cook did not cite appropriate cause for removing her from the board of governors.” | “An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],” her lawyers argued in the complaint. “President Trump’s letter purporting to fire Governor Cook did not cite appropriate cause for removing her from the board of governors.” |
| The White House claimed on Thursday that Cook had been “credibly accused of lying” by the administration. But the accusations are unconfirmed, and her lawyers said Trump and his officials had not explicitly alleged that any error on her mortgage paperwork was intentional. | The White House claimed on Thursday that Cook had been “credibly accused of lying” by the administration. But the accusations are unconfirmed, and her lawyers said Trump and his officials had not explicitly alleged that any error on her mortgage paperwork was intentional. |
| It comes as the Fed gears up to resume rate cuts as soon as next month, albeit not at the scale or pace Trump has repeatedly demanded – and its chair, Jerome Powell, has cautioned that the president’s tariffs and immigration crackdown have disrupted the global economy and knocked the US labor force. | It comes as the Fed gears up to resume rate cuts as soon as next month, albeit not at the scale or pace Trump has repeatedly demanded – and its chair, Jerome Powell, has cautioned that the president’s tariffs and immigration crackdown have disrupted the global economy and knocked the US labor force. |