President Donald Trump has formed a committee to investigate Federal Reserve governor Lisa Cook over alleged mortgage fraud, an escalation after his previous effort to fire Cook was blocked by the Supreme Court.
A White House memo said the group will look into whether Cook made “false statements in connection with one or more mortgage instruments” and will conduct an in-person hearing in November.
FED GOVERNOR LISA COOK DEFENDS HERSELF AGAINST MORTGAGE FRAUD ALLEGATIONS
Trump appointed the assistant to the president for economic policy, the chairman of the Equal Employment Opportunity Commission, and the director of the Office of Government Ethics as members of the panel.
“As President, it is my job to ensure the laws are faithfully executed, including by firing subordinates who cannot be trusted to tell the truth and follow the law,” reads the memo, which was dated Wednesday. “The Committee may consult with appropriate personnel from executive departments and agencies, including the Department of Justice, to aid in its inquiry.”
Cook’s attorneys, Abbe Lowell and Norm Eisen, released a statement on Friday saying that they have “grave doubts” that the November hearing will be legitimate or conform to the law.
“But if it is anything close to objective, the conclusion will be that Governor Cook did not commit mortgage fraud, leaving no cause to remove her from the Federal Reserve Board,” they said. “We have engaged with the White House to evaluate whether the process proposed has a possibility of being a genuine one and not simply a box checking exercise.”
The clash between Trump and Cook began when Federal Housing Finance Agency director Bill Pulte accused Cook of mortgage fraud, prompting Trump to fire her and the Justice Department to open an investigation into the allegations.
Pulte, who oversees the government-sponsored enterprises Fannie Mae and Freddie Mac, sent a criminal referral to then-Attorney General Pam Bondi, claiming that Cook broke the law by listing two homes, one in Michigan and one in Georgia, concurrently as her primary residence months before she was nominated to the Fed board.
The dismissal by Trump — if successful — would mark the first time in Fed history that a president has fired a member of the Fed board. The effort has generated tremendous controversy.
Cook defended herself in court, and the Supreme Court eventually ruled she could stay on the job. But it also said that Trump didn’t provide Cook with the process to dispute the allegations and that her firing “will depend in part on the underlying facts.”
Trump officials restarted the process of firing Cook through a more careful process. In an Aug. 5 letter, a White House official told Cook there was “sufficient reason to believe” she made false statements on mortgage applications and gave her a deadline to respond.
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Cook’s lawyers, Abbe Lowell and Norm Eisen, framed the situation as an “inadvertent error” on Cook’s part, rather than fraud, according to the response to Trump’s threat.
“For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause,” they said. “An inadvertent error is not fraud, as the President and a third of his cabinet should know because they reportedly did the same thing.”