By Staff Reporter
WASHINGTON — President Trump’s second attempt to remove Federal Reserve Governor Lisa D. Cook now runs on a calendar he set himself: a closed, four-hour hearing at the White House on Nov. 5, two days after the midterm elections. Cook’s lawyer has told the White House she will not be there.
The dispute over that date is the main open question in a process Trump created in an Oct. 7 memorandum, published in the Federal Register on Oct. 14. The memo sets up a three-member “committee of inquiry” to investigate allegations that Cook “made false statements in connection with one or more mortgage instruments.” The committee is to tell the president whether there is “cause” to remove her under the Federal Reserve Act. Cook denies the allegations.
What the memo requires
The committee’s members are 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. It may draw on Justice Department staff. The memo cites the Supreme Court’s decision this year in Trump v. Cook as the governing reading of the “for cause” protection in 12 U.S.C. 242.
| When | What |
|---|---|
| Before the hearing | Committee must give Cook the evidence it is considering |
| Nov. 2 (3 days before) | Deadline for Cook’s optional written position statement |
| Nov. 5 | In-person hearing at the White House, closed to the public but transcribed, no longer than 4 hours; Cook “shall appear” and may be questioned, including by Justice Department personnel |
| Nov. 10 | Deadline for Cook’s post-hearing written statement |
| “As soon as practicable” after | Committee sends findings of fact, conclusions of law and a recommendation on removal to the president |
The hearing will be closed, but Cook may bring counsel, present argument and submit written evidence and witness statements. The memo also says she “shall comply” with the committee’s document requests. It leaves the committee room to set “additional procedures” or make “reasonable changes.”
The fight over the date
In an Oct. 13 letter to Will Scharf, a senior Trump aide, Cook’s lawyer, Abbe Lowell, wrote that Cook would be “executing her official duties as Governor at financial and monetary policy meetings in Europe” on Nov. 5, CNBC and Bloomberg reported. He said the earliest possible date would be after the Fed’s Dec. 8-9 policy meeting.
Lowell also questioned whether the panel could be fair, according to CNBC. He pointed to past remarks by Kevin Hassett, Trump’s top economic adviser and a committee member, suggesting the president had cause to fire Cook. “A hearing with demonstrably biased members, unspecified additional allegations, and an unclear schedule for the disclosure of any additional evidence – with no explanation for why it was not previously produced – is not a process that respects the appearance or history of independence,” Lowell wrote. He added that Cook “welcomes the opportunity to present the facts so she can clear her name.”
White House spokesman Matthew Middleton told CNBC that the president “is performing his constitutional duty in evaluating Lisa Cook’s conduct and eligibility to continue serving as a governor,” and that Trump “is going beyond what the Supreme Court required by offering Lisa Cook an in-person hearing that will be conducted in a fair and open process.” As of early Tuesday the White House had not publicly changed the Nov. 5 date.
Why the timing matters
Cook remains a voting member of the Federal Open Market Committee. The Fed’s next policy meeting is Oct. 27-28, and the one after that is Dec. 8-9. At its September meeting the committee voted 12-0 to raise its benchmark rate by a quarter point, to a range of 3.75% to 4%. Trump, who wants lower rates, called Cook “dishonest” and an “automatic no vote” in remarks to reporters on Oct. 10, CNBC reported.
The Supreme Court blocked Trump’s first attempt to remove Cook in June, finding she had not received the process federal law requires. The committee is the administration’s answer to that ruling. Whatever it recommends, any new attempt to remove her could be challenged in court again. If the hearing slips to December, as Lowell has asked, the decision would come after the Fed’s last two meetings of the year.
Who we asked
The White House press office, the Federal Reserve Board’s public affairs office, Lowell’s law firm, the Equal Employment Opportunity Commission and the Office of Government Ethics did not immediately respond to requests for comment on whether the hearing date will change. The Inquisitor also asked Americans for Financial Reform, a group that tracks Fed independence, for comment. This story will be updated with any replies.
Photo: Federal Reserve Governor Lisa D. Cook, official portrait. Federal Reserve / Wikimedia Commons, public domain (U.S. government work).
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