The White House scheduled a closed-door hearing next month where Justice Department officials can question Federal Reserve governor Lisa Cook about mortgage-fraud allegations she has denied, as President Trump seeks to satisfy the Supreme Court's conditions for firing her.
A presidential memo directed Cook to appear Nov. 5 at the White House to be "examined by" a committee of Trump appointees, including Kevin Hassett, the director of the National Economic Council. It marked the latest escalation in Trump's battle to gain greater control over the Fed, and the first major salvo against the central bank since Chairman Kevin Warsh, his pick to lead it, took office in the spring.
The hearing would fall a day before Cook and the administration must give U.S. District Judge Jia Cobb a joint proposal on how Cook's lawsuit challenging Trump's first attempt to fire her should proceed. Cobb blocked that firing last year and allowed Cook to keep her seat while the lawsuit proceeded; the Supreme Court upheld her order in June. The case now returns to Cobb to decide the underlying dispute.
If the White House committee recommends removal, Trump could again try to fire Cook and argue he had given her the opportunity to respond that the Supreme Court found lacking, leaving Cobb to decide whether the process was adequate. The White House hearing could also produce new material the administration might cite to justify her removal.
The announcement is the latest move in the president's long-running effort to exert greater influence over the Fed and could deliver the unusual spectacle of a central-bank official arriving at the White House for a disciplinary meeting.
The hearing seems intended to demonstrate a deliberate procedural approach that was lacking in Trump's initial attempt to fire Cook, said Kathryn Judge, a Columbia University law professor who has tracked Cook's case.
"Part of what the administration is trying to do is convince the public of the legitimacy of a process that may not be all that balanced or all that fair," Judge said.
The hearing seems likely to clear the procedural bar that the Supreme Court laid out, but won't resolve deeper questions about the grounds on which presidents are permitted to fire Fed officials, Judge said. Those questions will likely continue to animate litigation about Cook's removal after the hearing, she said.
The Trump memo lays out a step-by-step process that seems designed to respond to the high court's ruling, mapping out logistical details such as when Cook may submit her own "position statement" and how long the hearing can last ("no longer than 4 hours").
"Governor Cook shall appear at the hearing and be examined by the Committee, its representatives, and her legal counsel, if any," said a presidential memorandum dated Oct. 7. "The Committee shall submit written findings of fact and conclusions of law to me and shall recommend whether there is cause to remove Governor Cook from her position."
Besides Hassett, the White House committee will also include the chair of the Equal Employment Opportunity Commission and the director of the Office of Government Ethics. EEOC Chair Andrea Lucas and the ethics office's current acting director, Keith Sonderling, who also serves as labor secretary, were both appointed by Trump.
The memo said that the hearing would be closed to the public but would be transcribed.
In a statement, two lawyers for Cook, Abbe Lowell and Norm Eisen, said that they have contacted the White House to "evaluate whether the process proposed has a possibility of being a genuine one and not simply a box checking exercise."
"In light of the President's repeated statements that he has already decided to fire Governor Cook -- regardless of the facts and evidence -- we have grave doubts that this 'hearing' is a legitimate one that would conform to the law," the lawyers said. "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."
The central bank is set up to operate independently from the White House, an arrangement seen by economists as essential for allowing it to set interest rates without political considerations.
No president had ever before tried to fire a sitting Fed governor, a position nominated by the president and confirmed by the Senate. The laws establishing the Fed say that top officials can be fired only "for cause," a legal term whose application to Fed officials had never been directly tested.
Cook was appointed to the Fed board by former President Joe Biden and is serving a term that runs until 2038.
Last year, Trump adviser Bill Pulte, the head of the Federal Housing Finance Agency, produced documents that he said showed Cook had listed more than one property as her "primary residence" on mortgage paperwork. Trump then attempted to fire Cook over the alleged misconduct, a decision he announced abruptly on social media, and Cook responded with a lawsuit.
Through her lawyers, Cook has argued in court that the White House didn't initially present her with evidence of misconduct or give her a chance to respond. She has argued that any inadvertent error in her mortgage paperwork wouldn't rise to the level of misconduct that would warrant her firing.
Earlier this year, when the Supreme Court largely sided with Cook, it found that she couldn't be fired without some minimal procedural protections that would allow any evidence against her to be aired. The high court didn't rule on whether Cook had committed mortgage fraud, or whether her mortgage paperwork was sufficient cause for her removal.
The November hearing would refocus attention on core questions of the Fed's independence and Trump's attempts to gain more control over how the central bank sets interest rates.