Lisa Cook, a governor on the US Federal Reserve Board, sued president Donald Trump on Thursday over his decision to fire her from the nation\u2019s central bank, arguing that she should be able to retain her position because the White House had no authority to order her dismissal.<\/p>\n
Ms Cook\u2019s lawsuit, which was filed in the US District Court for the District of Columbia, sets the stage for a landmark legal battle with lasting implications for the Fed, an independent institution that Mr Trump has savaged for months in a bid to install political loyalists and force down interest rates. The lawsuit also listed the Fed and Jerome Powell, its chair, as defendants alongside Mr Trump. That reflected their ability to take actions that adhered to the president\u2019s orders, the lawsuit said.<\/p>\n
Ms Cook officially embarked on her legal campaign three days after Mr Trump announced he would fire her in a letter posted to social media. The president claimed that Ms Cook, who was confirmed by the Senate in 2022, had engaged in mortgage fraud, as he invoked a power in the Fed\u2019s founding statute that allowed him to dismiss governors for cause.<\/p>\n
But Ms Cook, the first black woman to serve as Fed governor, has not been charged or convicted of any crime. Many experts questioned the legality of Mr Trump\u2019s actions, pointing out that the allegations against Ms Cook were unproven and involved conduct that predated her time at the Fed. Nor was Ms Cook afforded an opportunity to review the evidence and respond to the claims formally, which struck many observers as legally problematic.<\/p>\n
In a 24-page filing, lawyers for Ms Cook described the firing as \u201cunprecedented and illegal\u201d, and said it would \u201csubvert\u201d the central bank\u2019s congressionally mandated protections as laid out in the Federal Reserve Act. The filing said Mr Trump violated Ms Cook\u2019s right to due process, highlighting that she had no chance to respond to the allegations before the president announced her termination.<\/p>\n
The lawsuit did not provide an explanation for why Ms Cook listed two residences as her primary residence, which is the issue at the crux of the campaign against her. Instead, it sought to paint the firing as purely political and not based on anything other than a desire to oust a governor who was not ready to fall in line with the president\u2019s directives on interest rates.<\/p>\n
\u201cThe unsubstantiated mortgage fraud allegations that allegedly occurred prior to governor Cook\u2019s Senate confirmation do not amount to \u2018inefficiency, neglect of duty, or malfeasance in office\u2019,\u201d the lawsuit read, \u201cnor has the president alleged that they do.\u201d<\/p>\n