By Andrew Chung
(Reuters) -Federal Reserve Governor Lisa Cook urged the U.S. Supreme Court on Thursday to reject President Donald Trump's unprecedented attempt to oust her from the central bank's board.
Lawyers for Cook filed a written response opposing the administration's September 18 emergency request to lift a federal judge's order that blocked the Republican president from removing Cook, an appointee of Democratic former President Joe Biden, while litigation over the termination continues.
Washington-based
U.S. District Judge Jia Cobb ruled on September 9 that Trump's claims that Cook committed mortgage fraud before taking office - an allegation Cook denies - likely were not sufficient grounds for removal under the 1913 law that created the Fed.
The U.S. Court of Appeals for the District of Columbia Circuit in a 2-1 ruling on September 15 denied the administration's request to put Cobb's order on hold, ruling that Cook likely was denied due process in violation of the U.S. Constitution's Fifth Amendment.
Cook, the first Black woman to serve as a Fed governor, sued Trump in August after the president announced he would remove her. Cook has said the claims made by Trump against her did not give the president the legal authority to remove her and were a pretext to fire her for her monetary policy stance.
Earlier on Thursday, a group of 18 former U.S. Federal Reserve officials, Treasury secretaries and other top economic officials who served under presidents from both parties urged the Supreme Court in a brief to reject Trump's petition to allow his attempt to fire Cook.
The group included the past three Fed chairs - Janet Yellen, Ben Bernanke and Alan Greenspan - as well as former Treasury secretaries Henry Paulson, Lawrence Summers, Jacob Lew, Timothy Geithner and Robert Rubin. They argued that letting the Republican president remove Cook while her legal challenge to Trump's action is ongoing would threaten the U.S. central bank's independence and erode public confidence in it.
In its filing to the court last week, the Justice Department wrote, "This application involves yet another case of improper judicial interference with the President's removal authority - here, interference with the President's authority to remove members of the Federal Reserve Board of Governors for cause."
Congress included provisions in the law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only "for cause," though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.
Trump has pursued a broad vision of presidential power since returning to office in January.
The Cook legal battle has ramifications for the Fed's ability to set interest rates without regard to the wishes of politicians, widely seen as critical to any central bank's ability to function independently to carry out tasks such as keeping inflation under control.
Trump this year has demanded that the Fed cut rates aggressively, berating Fed Chair Jerome Powell for his stewardship over monetary policy as the central bank focused on fighting inflation. Trump has called Powell a "numbskull," "incompetent" and a "stubborn moron."
Trump on August 25 said he was removing Cook from the Fed's Board of Governors, citing the allegations that, before joining the central bank in 2022, she falsified records to obtain favorable terms on a mortgage.
In blocking Cook's removal, the judge found that the 1913 law only allows a Fed governor to be removed for misconduct while in office. The mortgage fraud claims against Cook relate to actions prior to her Senate confirmation in 2022.
(Reporting by Andrew Chung in New York; Editing by Will Dunham)
