Supreme Court blocks Trump bid to remove Lisa Cook from Fed

The Supreme Court on Monday refused to let President Donald Trump immediately fire Federal Reserve Governor Lisa Cook, preserving her seat while she fights the attempted removal in court. AP and Reuters reported that the 5-4 decision prevented Trump from becoming the first president to oust a Fed official since Congress created the central bank in 1913.

Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberal justices to block the firing, according to AP and Reuters. Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett dissented.

Trump had moved in August to remove Cook, citing unproven allegations of mortgage fraud, AP and Reuters reported. Cook denied wrongdoing and argued that the allegations were a pretext for political pressure over interest-rate policy.

Court cites removal protections

Roberts wrote that Trump had not given Cook the procedural protections required by statute, according to AP and Reuters. Without those protections, Roberts said, Cook could not properly contest the accusations used against her.

Roberts also wrote that Federal Reserve governors do not serve at the president’s pleasure, AP and Reuters reported. They serve staggered 14-year terms and can be removed only “for cause,” he said.

The justices denied a Justice Department request to lift a lower-court order that barred Trump from removing Cook while her legal challenge proceeds. Cook’s term runs until 2038, and former President Joe Biden appointed her to the Fed board in 2022, according to AP and Reuters.

Cook welcomed the ruling and said it supported the Federal Reserve’s independence. “This was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people,” Cook said.

Mortgage allegations at center of dispute

The case stems from claims that Cook listed two properties, one in Michigan and one in Georgia, as primary residences in June and July 2021, before she joined the Fed, AP and Reuters reported. Such designations can affect mortgage terms, including rates and down payments, if a property is treated as a primary home rather than a rental property or second home.

Solicitor General D. John Sauer argued in January that the applications showed “gross negligence at best” and gave Trump grounds to fire Cook, according to AP and Reuters. Sauer also argued that courts should not review Trump’s decision and that Cook was not entitled to a hearing.

Cook has denied wrongdoing and has not been charged with a crime, AP and Reuters reported. The Supreme Court agreed in October to hear the case while leaving Cook in her post, and it heard arguments in January with Cook and Jerome Powell in attendance.

AP and Reuters reported that Trump had also repeatedly criticized the central bank and opened an investigation into then-Governor Jerome Powell as the Fed resisted cutting interest rates as quickly as Trump wanted.

The Cook decision came the same day the Supreme Court backed Trump’s firing of Rebecca Slaughter, a Democratic member of the Federal Trade Commission, AP and Reuters reported. That ruling expanded presidential removal power over parts of the federal government and overturned a 1935 precedent protecting some regulatory agency leaders from at-will dismissal.

This story draws on original reporting from Al Jazeera.