Competing Arguments on Whether Lisa Cook Can Remain on Federal Reserve Board: Analysis

Joining us now to discuss is Bobbi Ann Cox, civil rights attorney and fellow at the Brownstone Institute. She's also a legal analyst. So, Bobbi Ann, thank you for joining us today. You know, during about two hours of arguments in the case, the justices indicated they were likely to keep the judge's decision barring Trump from immediately firing Cook. What were the main arguments they gave? Can you just talk to us about that briefly? Sure. So, basically, the attorney that's representing President Trump in the firing of Lisa Cook is saying that, you know, a court does not have jurisdiction to intervene in this type of a matter. You know, he's arguing that the Federal Reserve Act of 1913 specifically says that a president can remove a Federal Reserve governor for cause. And President Trump has said that the cause, the issue at hand, is that supposedly, allegedly, this woman, Cook, has lied on a mortgage application in order to get a better interest rate on that mortgage. And so he is, he being the president, has determined that that is sufficient cause to remove her. Whereas on the other side, Cook's attorneys are arguing that, first of all, she did not have any notice. There was no due notice. There was no right or opportunity to be heard before she was fired. So they're arguing that her constitutional rights have been violated in that instance. And they are also arguing that this is something that a court can adjudicate and that this is not an unfettered presidential power that gives the president of the United States, you know, any reason whatsoever to remove somebody from the Federal Reserve Board. So we have two completely opposing arguments going on here in this case. So we're going to have to see how the justices come down on a final decision. But this is not actually the ultimate decision about whether or not she is going to be removed permanently as a governor of the Federal Reserve. This is just an argument over whether or not while she's fighting in court to keep her job, whether or not she's allowed to remain on the Federal Reserve Board for the interim of that fight. So we're going to have to see how the justices come down with this decision. Okay, so I just want to follow up on your for cause part of your response earlier. So the alleged mortgage fraud occurred before her Senate confirmation. So, I mean, in your view, does that weaken it, using it now as grounds for removal? Well, it doesn't really weaken it because, you know, during oral arguments today, one of the conservative justices, you know, did pose a question, you know, let's say that one of the Federal Reserve governors committed a crime before they were appointed to the Federal Reserve, something that was, you know, truly heinous, like applauding and showing admiration for Hitler, he said, as an example, you know, or for the the KKK, he said, as an example. So, you know, he posed this egregious example of, you know, if the Federal Reserve governor had done something like that prior to being appointed, and then all of a sudden it was revealed once they were in the position, you know, wouldn't we be in a position to remove them from the Federal Reserve after finding out this information? So I don't think the fact that this alleged mortgage fraud occurred before her appointment to the Federal Reserve really should play into the decision here. I think it's more a question of, you know, does the court even have the power to intervene in this situation? Or is this truly a presidential power that is bestowed upon the president by the the federal statute that was first passed in 1913, when the Federal Reserve Bank was created? How much weight did the Supreme Court put on whether Cook's firing would impact the economy? And what harm would there be of letting her be on the board until this case plays out? Right. So that was also part of the arguments today that the court heard, you know, what is the negative impact of either removing Cook right away, while her legal battle is going through the courts, or leaving her in this position while her legal battle is winding its way through the courts? And both sides had, you know, very opposite answers to the question. You know, Trump's attorney is arguing that there will be harm, it'll be immediate harm, and it could be irreparable harm to the public opinion and the public trust in this Federal Reserve Bank, if this woman, Cook, is allowed to stay on the Federal Reserve while her legal battle is going on, and they argue, because her alleged infraction is with regards to the exact thing that the Federal Reserve oversees, right? So the Federal Reserve sets interest rates across the country. And, you know, this woman is being accused of having done a fraud, mortgage fraud, in order to earn a better, more favorable interest rate on a loan that she took out. So they're arguing that this is very germane to the situation, and it rises to the level of for cause. But then on the other side, Cook's attorney is arguing, you know, this has, it's basically a political ploy, and that this is just a witch hunt, so to speak, and that really, his client, you know, Lisa Cook, has not done anything that is inappropriate. He said, you know, if she put this property down as her primary residence instead of a vacation home, you know, it wasn't because she was trying to defraud the system and get a better rate. It was just simply a mistake that was made in the paperwork. So, you know, he's arguing that she should remain in her position, and she has right to a trial, and that the court should ultimately be able to decide whether or not she can stay in her position until her legal battle can play its way through the courts. So very opposing views and very opposing arguments going on today. Okay, Bobbi Ann, just one more thing, and this is another point of conversation I'd like to hear your thoughts on. Does the firing of Cook infringe on the independence of the Federal Reserve? You know, I don't think that it does directly because, you know, if we look at the language of the statute that's in question here, it's the Federal Reserve Act from 1913. If you look at the language, you know, it is very clear. It does give the president power to remove one of the governors from the Federal Reserve for cause, and it doesn't define that, right? So the statute itself doesn't say what that means, and it doesn't say how you remove someone. It simply gives the president the power to remove one of the governors for cause, and it doesn't say you have to give notice. It doesn't say you have to give the right to a trial and a hearing. It doesn't say any of this. So the fact that when Congress created this law in 1913, and Congress didn't specify what that means and how that looks on how the president would have to remove somebody from the position, the fact that they left it open and broad, when you read the language of the statute, it really does infer that Congress's intent when they wrote this statute was that the president would have this power and that it wouldn't be challenged because there is no procedure set out in the statute saying how he has to remove one of the governors for due cause. So I think that it's not going to be a negative impact upon the Federal Reserve in its autonomy. I think we just need to look at the statute and really read into what the intent Congress had at the time of passing. Well, okay, Bobby-Ann, very balanced analysis. Thank you so much for your time today. Yes, thank you.