President Donald Trump posted a letter on social media on Aug. 25 saying he was immediately firing former Michigan State University economist Lisa Cook from the Federal Reserve Board of Governors, accusing her of “deceitful and potentially criminal conduct” in obtaining mortgages for her personal property.
It was not immediately clear whether Trump’s firing of Cook, the first Black woman to serve on the Fed’s board ever, was allowed under federal law, which only permits such a dismissal in cases where there is evidence of “inefficiency, neglect of duty or malfeasance in office.”
The conduct Trump and other Republican members of his administration − chiefly Federal Housing Financial Agency head Bill Pulte − have accused Cook of took place before she joined the Board of Governors in 2022.
Cook issued a statement saying she had no intention of leaving. She told the Washington website Politico and other media outlets that Trump “has no authority” to fire her and should would “continue to carry out my duties to help the American economy as I have been doing since 2022.”
Her lawyer, Abbe Lowell, also said, “President Trump has taken to social media to once again ‘fire by tweet’ and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority. We will take whatever actions are needed to prevent his attempted illegal action.” The Federal Reserve did not issue any statement.
The seven-member Federal Reserve board generally sets monetary policy for the nation’s reserve banks and Trump has been urging it and its chairman, Jerome Powell, to lower interest rates. Last week, when the claims first surfaced that Cook had made misrepresentations for mortgage applications for properties in Georgia and Michigan, she said she had no intention of resigning as both Trump and Pulte urged but took the allegations seriously.
On Friday, the president said if Cook didn’t resign he would fire her, despite the fact that traditionally the White House has maintained the Fed’s independence.
Trump’s apparent firing of Cook comes at a time when his administration has been active in trying to purge the federal government of what it has deemed inappropriate diversity hires and programs, though the fact that she is the first Black woman to serve on the Fed board has not been mentioned by the president in his statements about her.
U.S. Sen. Elizabeth Warren, D-Massachusetts, criticized Trump’s move, saying he “is desperately looking for a scapegoat to cover for his own failure to lower costs for Americans and firing Lisa Cook is his latest move.”
“It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and any court that follows the law will overturn it.” she said on social media platform X.
In the letter from Trump, dated Aug. 25 and addressed to Cook, the president cited his authority under law, claiming it allowed him to remove her from office for cause. “I have determined there is sufficient cause to remove you from your position.”
He went on to cite Pulte’s criminal referral against Cook to the Justice Department from last week, saying there was “sufficient reason” to believe she made misrepresentations on mortgage documents, claiming within weeks on separate applications that both properties in Michigan and in Georgia would be her primary residence. Mortgage companies sometimes make decisions about the terms of their agreements with customers based on such information.
“It is inconceivable that you were not aware of your first commitment (that the Michigan property would be her primary residence) when making the second,” Trump wrote. “It is impossible that you intended to honor both.”
“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” the letter went on. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity. At a minimum the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
On X, Pulte said that with the letter, Trump had become the first president to ever remove a sitting governor, though it remained far from clear whether Cook’s firing had been proper. “Thank you President Trump for your commitment to stopping mortgage fraud and following the law. If you commit mortgage fraud in America, we will come after you, no matter who you are,” Pulte wrote.
Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.
This article has been updated with new information.
This article originally appeared on Detroit Free Press: Trump fires former Michigan State economist Lisa Cook from Fed board
Reporting by Todd Spangler, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
