WASHINGTON — The Supreme Court gave a skeptical hearing Wednesday to President Trump’s claim that he has the power, acting alone, to fire Federal Reserve board governor Lisa Cook for a past mistake on a mortgage application.
Most of the justices said they were not convinced that what Chief Justice John G. Roberts Jr. described as Cook’s “inadvertent mistake” was grounds for removing her from the central bank board.
They also questioned Trump’s failure to give her hearing.
Justice Brett M. Kavanaugh said it “would weaken if not shatter the independence of the Federal Reserve” if the court were to uphold Trump’s claim of absolute power.
“Is there anything to fear from a hearing?” Justice Amy Coney Barrett asked Trump’s Solicitor Gen. D. John Sauer. “Why not give her a chance to defend herself?”
Trump has sought to take control of the independent bank board because it has not lowered interest rates as far and as fast as he prefers.
He has clashed with Federal Reserve Board Chairman Jerome H. Powell and threatened to fire him. More recently, Trump’s prosecutors said they were investigating Powell for possible criminal false statements in a congressional hearing.
In August, Trump posted on social media that he had “cause” to fire Cook after he was told she may have committed mortgage fraud.
In 2021, the year before President Biden appointed her, she bought homes in Michigan and Georgia and said each would be her “principal residence.”
In response to the allegation, Cook’s attorney said she had told the mortgage lender that the Georgia property was a “vacation home,” not her primary residence.
Cook sued to retain her seat. A federal judge blocked her removal on the grounds that her alleged wrongdoing came before her appointment. The D.C. Circuit Court agreed in a 2-1 decision.
In September, Trump’s lawyers sent an emergency appeal to the Supreme Court and said this was “yet another case of improper judicial interference with the president’s removal authority.” They said the court should set aside the lower court ruling and uphold Cook’s firing.
But in October, the justices agreed to keep Cook’s firing on hold and scheduled arguments on how to proceed.
While the justices were skeptical of Trump’s arguments on Wednesday, it was not clear how they will rule.
They could rule that Trump has to give Cook a hearing and an opportunity to defend herself. Or they could rule more directly and say that an alleged misstatement on a past mortgage application did not rise to the level of “cause” for firing a Federal Reserve board governor.
Representing Cook, Washington attorney Paul Clement, a former U.S. solicitor general under President George W. Bush, told the court said there is an “unbroken history” of treating the Federal Reserve board as independent.
“No president has ever tried to remove a governor for cause,” he said.
And the court should not start by upholding Trump’s bid to fire with no hearing, he said.
