Donald Trump has created a three-member committee to investigate Federal Reserve Governor Lisa Cook, in his latest attempt to remove her from the central bank’s board. All three members are officials of his own administration. Cook denies wrongdoing, and her lawyers question whether the process is a genuine one.
President Donald Trump has formally established a “committee of inquiry” to investigate allegations that Federal Reserve Governor Lisa Cook made false statements related to “one or more mortgage instruments”, CNBC reported.
The White House announced the move on Friday, October 9.
Who Is on the Committee
- Kevin Hassett, Trump’s top economic aide
- Keith Sonderling, the Labor secretary and acting head of the Office of Government Ethics
- Andrea Lucas, chair of the Equal Employment Opportunity Commission
All three are executive-branch officials. No outside or independent members are named.
The committee and Cook are due to appear at an in-person hearing at the White House on November 5, two days after the midterm elections.
Why It Is Unusual
According to CNBC, a committee of this kind has not been used in nearly a century.
There are older precedents. President William Taft appointed one in 1912, and President Herbert Hoover did so in 1931.
The Background
Cook was nominated to the Fed’s board by former President Joe Biden.
Trump first tried to fire her last year, after administration officials alleged that she had made false statements on at least one mortgage-related document. Cook denied wrongdoing and sued.
A federal court blocked her dismissal, and in June the Supreme Court narrowly upheld that ruling. It found that she had not been given proper due process, but it did not stop Trump from trying again.
Under the Federal Reserve Act, a president can remove a Fed governor only “for cause”.
What Cook’s Lawyers Say
Her attorneys, Abbe Lowell and Norm Eisen, questioned the inquiry’s legitimacy.
“In light of the President’s repeated statements that he has already decided to fire Governor Cook — regardless of the facts and evidence — we have grave doubts that this ‘hearing’ is a legitimate one that would conform to the law,” they said.
They added that Cook nonetheless “welcomes the opportunity to present the facts so she can clear her name”.
The Wider Argument
Trump frequently urges the Fed to cut interest rates. He recently blamed a “hostile” board for the failure of his chosen chair, Kevin Warsh, to do so.
Congressional Democrats criticised the announcement. Critics say it will fuel accusations that the administration is eroding the central bank’s independence.
The allegations against Cook have not been proven.
Image: Lisa Cook being sworn in as a Federal Reserve governor in May 2022 (file photo). Photo by the Federal Reserve via Wikimedia Commons, public domain.
