“Unprecedented and Illegal”: Lisa Cook Sues Trump—and Jerome Powell

Federal Reserve Governor Lisa Cook, whom Donald Trump is seeking to fire in an escalating campaign of lawfare against his political enemies, is officially taking the president to court.

In a lawsuit filed Wednesday, the Fed board member says Trump’s “concocted basis” for her removal fails to “amount to ‘cause’”—and is an “unprecedented and illegal” violation of her due process rights as well as the central bank’s independence.

Stunningly, the lawsuit also names Federal Reserve Chair Jerome Powell and the Board of Governors as defendants.

Trump on Monday fired Cook over (seemingly vengeance-driven) accusations of mortgage fraud. The lawsuit, however, says the allegations 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.”

Cause, under the Federal Reserve Act, means “inefficiency, neglect of duty, or malfeasance in office.” But even if Trump’s authority to remove a Fed board member goes beyond that, Cook’s lawyers state, he is not allowed to “unilaterally redefine ‘cause’—completely unmoored to caselaw, history, and tradition—and conclude, without evidence, that he has found it.”

“Certainly,” the suit continues, “a policy dispute between the President and a Governor does not constitute ‘cause.’ Neither does a specious assertion that a one ‘potentially’ committed a crime—one which is unproven, uncharged, and unrelated to official conduct.”

So expansive is Trump’s “conception of ‘cause,’” Cook warns, that “it would allow him to remove any Federal Reserve Board member with whom he disagrees about policy based on chalked up allegations.”

The lawsuit also notes that Bill Pulte, head of the Federal Housing Finance Agency, has lobbed accusations of mortgage-related misdeeds against others of late (i.e., Senator Adam Schiff and New York Attorney General Letitia James). Notably, Cook’s lawyers note, each of Pulte’s criminal referrals have been “at one time or another, political targets of President Trump’s ire prior to any mortgage fraud allegations.”

This fact has caused suspicions that Pulte is working through an enemies list—perhaps even handed down from the White House. And, as TNR’s Greg Sargent observed this week, the discovery process in Cook’s case against Trump could help reveal potential White House involvement.

This story has been updated.