DOJ hammers Lisa Cook for not explaining mortgage document problems as Trump tries to push her out of Fed

Justice Department lawyers hammered Lisa Cook for not providing any explanation for apparent irregularities in her mortgage filings, telling a federal judge there was no reason to keep her in her role at the Federal Reserve.

The DOJ lawyers said President Donald Trump‘s firing of Cook from the central bank’s board of governors should take effect, and that Trump had no obligation to give her additional chances to argue she didn’t do anything wrong.

“Incredibly, Dr. Cook even now hazards no explanation for her conduct and points to nothing she would say or prove in any ‘hearing’ that would conceivably alter the President’s determination that the perception of financial misconduct alone is intolerable in this role,” DOJ letters wrote in a Friday morning court filing.

The Justice Department lawyers submitted the filing ahead of a courtroom hearing in Washington, DC. US District Judge Jia M. Cobb is weighing whether to issue a temporary restraining order to ensure Cook continues in her role while additional litigation plays out. The hearing is expected to conclude Friday afternoon.

Trump posted a letter on Truth Social Tuesday night saying he was firing Cook from the Federal Reserve board of governors for “cause.” He cited a criminal referral authored by Federal Housing Finance Agency Director Bill Pulte, who alleged she lied on mortgage documents. According to Pulte, Cook said two different homes would be her primary residence at the same time.

Justice Department attorney Yaakov Roth pressed the point at Friday’s hearing. He said Cook was unlikely to succeed with additional litigation, so Cobb should not block Trump’s firing.

“Is there some material factual dispute?” Roth said. “I think if there was something like that, we would have heard it by now.”

Cook and Trump dispute what ’cause’ means

Cook sued Trump and the Federal Reserve on Thursday. In her lawsuit, she called the allegations about her mortgage documents “unsubstantiated” and said that, in any case, Trump’s basis didn’t meet the required legal standard for for-cause removal from her post.

Because the Federal Reserve is an independent agency, presidents have limited power to remove members of its board. The governors serve for staggered 14-year terms, and Cook’s is scheduled to end in 2038. Under the law, presidents can only remove board members for “cause.”

“President Trump does not have the power to unilaterally redefine ’cause’ — completely unmoored to caselaw, history, and tradition — and conclude, without evidence, that he has found it,” Cook’s lawsuit says.

Cook’s lawsuit did not explain the apparent discrepancy in her mortgage filings. Her attorney, Abbe Lowell, said in Friday morning’s hearing that, in any case, Trump was legally required to hold a process that would determine whether she acted with improper intent and motive.

“Cause” may be difficult to define, but a mere allegation isn’t enough, Lowell said.

“It certainly doesn’t mean Director Pulte coming up with allegations in the middle of the night,” he said.

In a separate court filing Friday morning, a lawyer for the Federal Reserve said it would not offer any arguments in the lawsuit but asked the judge to issue a prompt ruling “to remove the existing cloud of uncertainty.”

The Justice Department lawyers, who are representing Trump, said in their Friday morning filing that judges should defer to the president when interpreting the “cause” standard.

“Removal for ’cause’ is a capacious standard, and one Congress has vested in the discretion of the President,” the Justice Department lawyers wrote. “Even if it were subject to any judicial review — and over a century of caselaw suggests it is not — that review would have to be highly deferential, lest it intrude into the President’s constitutional authority over principal officers.”

The Supreme Court has so far largely sided with Trump in his attempts to fire the leaders of other independent agencies without citing any cause.

But in an unsigned May opinion, the majority said the Federal Reserve deserves different treatment because of its history, without explaining what those different standards would be.

Trump has said he wants the Federal Reserve board to lower interest rates as part of his plan to reshape the American economy. Cook’s lawsuit highlighted the importance of an independent board, insulated from political interference.

“An independent Federal Reserve is essential for a stable economy, as the short-term political interests of a president often clash with sound monetary policy,” the lawsuit says.

At Friday’s hearing, Lowell said Trump’s desire to lower interest rates was a pretext for trying to fire Cook, and supports the argument that his attempt to fire her was invalid.

“A bad motive can illuminate the fact that there was no real cause,” he said.

Roth said Trump’s repeated criticism of the Federal Reserve’s chairman, Jerome Powell, is irrelevant to the case.

He said the president had not criticized Cook in the same vein before allegations about her mortgages came to light.

“This isn’t Chairman Powell,” Roth said. “This is Dr. Cook.”

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