US Federal Reserve governor Lisa Cook filed a lawsuit against President Donald Trump on Thursday over his attempts to fire her, setting up an unprecedented legal battle.
Mr Trump said on Monday that he had fired Ms Cook over allegations of mortgage fraud, although no charges have been filed against her. Mr Trump, in a letter posted to Truth Social, said the allegations gave him “sufficient cause” to fire Ms Cook, who was first nominated to the Federal Reserve's Board of Governors by former president Joe Biden.
Her term is set to run through January 2038.
In a lawsuit filed in the federal district court in Washington, lawyers for Ms Cook said Mr Trump's attempt to fire her is “illegal” and, “if allowed to occur, would be the first of its kind in the board’s history”.
“It would subvert the Federal Reserve Act [FRA], which explicitly requires a showing of 'cause' for a governor’s removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook before her Senate confirmation is not,” the lawsuit reads.
Fed officials can only be fired "for cause", which is generally understood to mean neglect of duty or malfeasance.
Fed chair Jerome Powell and the Federal Reserve Board are being sued to the extent that they are able "to effectuate President Trump’s purported termination of Governor Cook".
A hearing for the motion is set for 10am ET on Friday.
White House spokesman Kush Desai said in a statement that Mr Trump had exercised his lawful duty after determining there was cause to remove Ms Cook, which he said "was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions".
"The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people," Mr Desai said.
The Federal Reserve declined to comment.
Fed governor Christopher Waller also declined to comment on the situation when asked by a moderator after remarks at the Economic Club of Miami.
Mr Trump's attempt to remove Ms Cook comes as he seeks to exert greater control over the Federal Reserve, which this year has held US interest rates steady despite the President's demands to lower them. The President has publicly made clear his wish for lower rates, and has repeatedly attacked Mr Powell and the wider Fed board for not lowering rates.
If he is successful in ousting Ms Cook, Mr Trump could then have a majority on the seven-member Fed board, a situation he acknowledged this week. His nomination to fill former Fed governor Adriana Kugler's seat in a temporary capacity, with top economic adviser Stephen Miran, is on track to be confirmed by the US Senate before the Fed's next rate-setting meeting in September.
"It is clear from the circumstances surrounding Governor Cook’s purported removal from the Federal Reserve Board that the mortgage allegations against her are pretextual, in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve," Ms Cook's lawyers Abbe Lowell and Norm Eisen argued in the lawsuit.
Allegations of mortgage fraud were first raised last week by federal housing finance director Bill Pulte. Those accusations centre on two properties Ms Cook listed as her primary residence when taking out loans in 2021 – a condominium in Atlanta, Georgia, and a house in Ann Arbor, Michigan.
Mr Pulte sent a criminal referral to the Department of Justice, which said it will investigate the claims against her. The White House has demanded that Ms Cook step away from her duties until the accusations are resolved, although Ms Cook has remained adamant that she will continue her business as usual.
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Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
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