WASHINGTON -- President Trump is reviving his attempt to fire Federal Reserve governor Lisa Cook, pressing her to respond to allegations of mortgage fraud that Cook has called baseless.
A top aide to Trump sent a letter this week to Cook saying the president was "considering removing you from your position" based on the allegations and asking her to provide a written response by the end of August.
The Supreme Court in June blocked Trump from firing Cook without meaningful legal scrutiny. The White House's letter appears to be an attempt to fire her in a way that will meet the legal standard the court outlined.
Trump cited a criminal referral made by one of his top housing officials, Bill Pulte, alleging that Cook lied in 2021 about her primary residence on mortgage paperwork to obtain more favorable terms from a lender. Trump gave Cook no formal opportunity to contest the allegations.
She has denied any wrongdoing. Her lawyers have said the matter was, at worst, an inadvertent error and that the allegations are merely a pretext for Trump's true goal of controlling monetary policy by installing loyalists at the Fed.
"These allegations are as baseless now as they were a year ago when President Trump tried to remove Governor Cook and interfere with the independence of the Federal Reserve," Cook's lawyer Abbe Lowell said on Friday. "As we did before, we will challenge this latest pretext and preserve her position and the historic role of the Fed."
In financial filings, Cook has reported that her legal expenses rose to more than $1 million, backed by donations, as she fought to keep her job.
The saga began last August, when Trump attempted to fire Cook, posting on social media that she "must resign" and then, days later, sending a letter notifying her that he was removing her immediately. It was the first time in the history of the central bank that a president had tried to remove one of its governors.
In response, Cook sued, arguing that Trump lacked grounds to fire her, especially without meaningful due process.
In June, the Supreme Court largely sided with Cook, ruling that she couldn't be fired without some minimal procedural protections that would allow the evidence to be aired.
The new White House letter to Cook effectively signals a renewed effort to remove her.
"Because the allegations in the Criminal Referral reflect on your honesty, trustworthiness, and competence to perform the duties of the office you currently hold, the President has determined that there is reason to believe they constitute cause to remove you from your position, " it reads.
The letter was signed by Dan Scavino, the White House deputy chief of staff. It asks Cook to respond to the mortgage-fraud allegations within 21 days.
The Fed's new Trump-appointed chairman, Kevin Warsh, was asked about Cook's case during his Senate confirmation hearing in April. He declined to share his view, citing the litigation that was pending at the Supreme Court at the time. A Fed spokeswoman declined to comment on Friday.
The central bank was a source of continual aggravation for Trump under former Chair Jerome Powell, whose tenure ended in May. Throughout, Trump was frustrated that the Fed kept interest rates higher than he wanted.
Trump's ire at Powell boiled over last year, when the Justice Department seized on Powell's congressional testimony about a renovation project to launch a criminal investigation. The investigation was dropped this spring when a Republican senator refused to support Warsh's nomination to succeed Powell as long as Powell faced potential charges.
Most Fed chairs leave the institution when their leadership terms end, but Powell chose to remain a Fed governor, citing risks to the Fed's independence. Trump's new threat against Cook could factor into how long Powell stays; his term ends in January 2028.
Economists and policymakers widely agree that it is critical for the Fed to be independent from politics -- a longstanding principle intended to insulate interest-rate policy from short-term thinking.
Warsh has brushed off the threat that the Fed's independence faces from the White House. "Fed independence is up to the Fed," he said during his confirmation hearing.
Still, questions about Fed independence have followed Warsh during his brief tenure as chairman. Warsh and Trump have spoken frequently about the economy by phone, an unusually close link between the Fed and the White House.
The Fed has held rates steady since Warsh took over as chair in May -- although elevated inflation has led many Fed policymakers, including Cook, to discuss raising interest rates, not cutting them, as the likely next move.
A committee of 12 Fed officials votes on interest rates, and at both of the meetings Warsh has led, he voted with the majority of the committee to hold rates steady. Trump has blamed the Fed's failure to cut rates under Warsh's leadership on what he has called a "very political board."
Cook was appointed to the Fed's board in 2022 by President Joe Biden. Other Biden appointees hold two board seats; Trump's appointees hold three. Powell was appointed to the Fed by President Barack Obama.
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