Cook Blasts Trump’s ‘Cut-and-Paste’ Mortgage Fraud Claims

Michael McKee, Bloomberg International Economics & Policy correspondent, discusses the latest on President Trump's attempt to oust Federal Reserve Governor Lisa Cook.

Federal Reserve Governor Lisa Cook’s lawyer blasted President Donald Trump’s move to oust her as being based on nothing more than “cut-and-paste” allegations of mortgage fraud made in social media posts.

In a flurry of court filings Tuesday, Cook’s attorney, Abbe Lowell, doubled down on arguments he presented at a hearing last week, saying Trump lacked valid grounds to fire Cook “for cause,” a key issue in the lawsuit challenging her dismissal. Cook “did not ever commit mortgage fraud,” Lowell said.

He also said that social media posts by Federal Housing Finance Agency Director Bill Pulte, and a criminal referral to the Justice Department, didn’t give Cook an opportunity to respond before she was fired. Pulte’s referral letter hedged in its allegations against Cook, which remain unproven, Lowell said.

Such “equivocal language makes clear that the charges against Governor Cook were nothing more than a set of cherry-picked, cut-and-paste allegations to try to give the President political cover to remove a Board member with whom he has policy disagreements,” the lawyer said. Pulte made similar allegations against California Senator Adam Schiff and New York Attorney General Letitia James, Democrats who’ve both clashed with Trump.

Cook sued last week to block Trump’s move against her, saying he’s using a phony pretext that doesn’t amount to sufficient “cause” to remove her from the US central bank. The dispute comes amid weeks of criticism by the Trump administration of the Fed’s reluctance to lower interest rates.

While Cook sought an emergency ruling allowing her to keep her job, court filings Tuesday indicate there likely won’t be a ruling before the end of the week. US District Judge Jia Cobb in Washington gave the government until Thursday to file additional arguments, indicating she won’t rule before then.

In another filing Tuesday, Cook’s attorneys said they weren’t able to reach an agreement with the government that ensures she can continue to perform her duties while the legal fight goes forward, so she still wants a temporary ruling from the judge preserving the status quo as quickly as possible. The Fed is scheduled to meet next on Sept. 16-17.

“Allowing the president to lock Governor Cook out of her office, even temporarily, would amount to a crack in the foundation of the Federal Reserve’s near-century of independence,” her lawyers wrote. “That is a bell that could not be unrung, even if Governor Cook were ultimately reinstated.”

The Fed hasn’t taken a position on the fight in court, only saying that it will respect any court rulings.

Cook’s lawyers also argued proper due process would have involved a formal notice of the allegations followed by a chance for Cook to refute them in an administrative process at the Federal Reserve, the FHFA, the White House or some other government entity.

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