Supreme Court Rebuffs Trump Bid to Oust Fed Governor

In a major ruling on Monday morning, the Supreme Court of the United States rejected Donald Trump’s move to fire Lisa Cook from a position as a Federal Reserve governor, slowing down his quest to influence more power over the central bank.

The court ruled five to four in Cook’s favor, maintaining a block issued by lower courts that ruled Trump could not fire her, the Wall Street Journal reported. Cook had filed a lawsuit alleging that Trump’s firing was not “for cause,” as required by federal law.

Cook said the move to fire her “was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure.”

That “manufactured pretext” arose nearly a year ago. Trump unveiled his plans to fire Cook for cause in late August, shortly after Federal Housing Finance Agency director Bill Pulte alleged that Cook committed mortgage fraud four years ago by describing both a home in Michigan and one in Atlanta as primary residences. The removal attempt was the first by a president in the Fed’s 111-year history.

Since the start of his second term, the president has embarked on a pressure campaign against the independent institution, often attacking former Fed chair Jerome Powell for his failure to cut interest rates.

Federal prosecutors opened a criminal investigation earlier this year into whether Powell misled Congress regarding the cost and scope of a $2.5 billion renovation of the central bank’s Washington headquarters. But a federal district judge ruled that subpoenas related to the probe were improper and the investigation has since been sidelined.

Yet Trump got his guy on top of the central bank, nominating Kevin Warsh for a job he started several weeks ago, despite concerns of how the president’s opinions will influence an independent institution. In the first meeting since his installment, Warsh held interest rates steady.

While the Cook decision was a defeat for the administration, a similar case went Trump’s way by a six-to-three margin, granting the president more leeway to fire leaders of regulatory agencies that aren’t the Federal Reserve. The decision effectively shatters the independence of agencies such as the Federal Trade Commission.

— Holden Walter-Warner