Trump Asks Court to Let Him Fire Cook, Who Warns of Vote Turmoil

President Donald Trump asked a federal appeals court to immediately pause a lower court decision blocking his ouster of Federal Reserve Governor Lisa Cook, the latest sign that the administration wants to put the case on a fast track to the US Supreme Court.

The Justice Department on Thursday asked a three-judge panel in Washington to grant a so-called stay order that most likely would allow Trump’s firing of Cook to take effect before the president’s appeal is formally heard.

The administration asked for a ruling by Monday, one day before the Fed’s board starts meeting to vote whether to lower interest rates. Cook can attend the meeting as long as the ruling remains in place.

Hours after Trump made his request for an immediate administrative stay, Cook’s lawyer filed a response urging the judge to deny it. Cook also requested a Sept. 18 deadline to file a separate response to Trump’s request for a longer-lasting stay pending appeal.

If accepted, that timeline would push any resolution of Trump’s stay request beyond the next Fed meeting, which Cook says she is busy preparing for.

“An administrative stay would threaten Governor Cook’s participation in next week’s meeting and potentially plunge the FOMC’s vote into turmoil,” her lawyer Abbe Lowell wrote in the filing. “In addition, it has the real potential of impacting domestic and foreign markets.”

If the appeals court denies the Justice Department’s request to immediately intervene, the president is likely to quickly ask the Supreme Court to consider the request.

Trump seeks to overturn a decision by US District Judge Jia Cobb, who ruled he likely did not have “cause” under the Federal Reserve Act to fire Cook over allegations she committed mortgage fraud before her 2022 Senate confirmation. Cobb also held that Trump likely violated Cook’s constitutional right to due process by attempting to fire her via a social media post that did not give her a meaningful opportunity to challenge the allegations.

“Even with the Federal Reserve’s unique structure and history, its governors are subject to removal for cause, and the president’s actions to remove Cook based on her misconduct should strengthen, not diminish, the Federal Reserve’s integrity,” the Justice Department said in its earlier filing.

The Fed hasn’t taken a side in the legal fight and has said it will respect the court’s decision.

Such stays are typically granted on an emergency basis if the judges believe an appeal will ultimately succeed on the merits and the party asking for it will face “irreparable harm” without immediate action. It’s unclear how quickly the appeals court panel will be able to rule.

Trump said last month he was firing Cook after Federal Housing Finance Agency Director Bill Pulte accused her of fraudulently listing homes in Michigan and Georgia as a “primary residence” when she obtained mortgages in 2021 to secure more favorable terms on loans. Pulte later added a claim involving a third mortgage in Massachusetts.

Cook has alleged that Trump’s move to remove her is part of a politically motivated pattern, and that allowing him to oust her could undermine the public’s faith in the Fed and do lasting damage to the US economy.

The Justice Department said in its Thursday filing that a stay is justified because Trump is likely to win the case. One reason, the government contends, is that there are no “materially disputed facts” because Cook has failed to rebut the evidence or offer a “contrary explanation” for it.

The government also disputed Cobb’s finding that Cook’s due process rights were violated, arguing that the Fed governor has not used her public comments or her court filings to meaningfully explain the mortgage documents at the center of the controversy.

“Cook does not allege that she sought to offer any evidence to the President or anyone else that would explain her actions, either after the President first called on her to resign, or even through this litigation,” the Justice Department said.

Cook’s filings have explicitly said that she has never committed mortgage fraud and suggested possible explanations including a “clerical error.”

--With assistance from Amara Omeokwe.

To contact the reporters on this story:
Erik Larson in New York at elarson4@bloomberg.net;
Zoe Tillman in Washington at ztillman2@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Anthony Aarons, Peter Blumberg

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