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WASHINGTON (AP) — Alan Greenspan, Ben Bernanke, Janet Yellen and other former top economic officials appointed by presidents of both parties urged the Supreme Court on Thursday to preserve the Federal Reserve’s political independence and allow Lisa Cook to remain as a central bank governor for now.
The justices are weighing an emergency appeal from the administration to remove Cook while her lawsuit challenging her firing by Republican President Donald Trump proceeds through the courts.
The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agency’s 112-year history.
Earlier in September, a judge determined that Trump’s move to fire Cook probably was illegal. An appeals court rejected an emergency plea to oust Cook before the Fed’s meeting last week when Cook joined in a vote to cut a key interest rate by one-quarter of a percentage point.
A day after that meeting, the administration turned to the Supreme Court and again asked for her prompt removal.
In their filing, lawyers for the former economic officials wrote that immediately ousting Cook “would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed’s independence and jeopardizing the credibility and efficacy of U.S. monetary policy.”
Greenspan, Bernanke and Yellen served as successive chairs of the Fed’s seven-member board of governors, spanning six presidential administrations back to 1987. Greenspan and Bernanke were initially appointed by Republican Presidents Ronald Reagan and George W. Bush, respectively. President Barack Obama, a Democrat, nominated Yellen to the Fed and she was Democratic President Joe Biden’s treasury secretary.
The list of signatories includes other treasury secretaries, heads of the Council of Economic Advisers and former Sen. Phil Gramm, R-Texas, a former chairman of the Senate Banking, Housing and Urban Affairs Committee.
In a separate high court filing Thursday, lawyers for Cook warned that blocking the lower-court ruling and allowing Cook’s removal “would signal to the financial markets that the Federal Reserve no longer enjoys its traditional independence, risking chaos and disruption.”
Trump sought to fire Cook on Aug. 25, but a judge ruled that she could remain in her job. Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as “primary residences” in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and a smaller down payment than if one of them was declared as a rental property or second home.
Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021. In a form seeking a security clearance, she described it as a “2nd home.” Both documents appear to undercut the administration’s claims of fraud.
The attempt to fire Cook differs from Trump’s dismissal of board members of other independent agencies. Those firings, including at the National Labor Relations Board, Federal Trade Commission and Consumer Product Safety Commission, have been done at will.
In allowing those firings to proceed for now, the Supreme Court cautioned that it viewed the Fed differently. Trump has invoked the provision of the law that set up the Federal Reserve and allowed for governors to be dismissed “for cause.”
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