With far too many issues raised in a day to address, none of which had anything to do with Jeffrey Epstein, Trump ran the gamut from criminalizing protected free speech in an Executive Order criminalizing the burning of the American flag (and announcing the sentence to be imposed for doing so!), to violating the Posse Comitatus Act by federalizing National Guard units to perform law enforcement functions when there is no local request or emergency**
To cap off the day, President Trump “fired” member Lisa Cook of the Federal Reserve Board of Governors. By firing her and replacing her with one of his guys, it would give Trump a majority of the Board and enable him to dictate monetary policy, among other things, to his performative advantage of reducing the interest rate at the expense of sound economic policy.
Trump twitted a letter to justify his actions. Under the Federal Reserve Act of 1935, the president can remove a fed governor for cause. Trump claimed that allegations of mortgage fraud against Cook by Trump loyalist Bill Pulte, director of the Federal Housing Finance Agency, who has used his position to dig up allegations against Trump’s enemies justify her removal.
Mr. Pulte specifically claimed that Ms. Cook had committed mortgage fraud, alleging that she improperly designated both a condominium in Atlanta and a home in Ann Arbor, Mich., as her primary residence when taking out loans. In doing so, Mr. Pulte said, Ms. Cook had “falsified bank documents and property records” in a way that allowed her to obtain a lower interest rate.
Pulte referred his allegations to Attorney General Pam Bondi for criminal prosecution. Notably, Cook has neither been indicted nor convicted of any crime. The irony of Trump, whose liability for doing the same was just upheld even though the amount of disgorgement was found to violate the excessive fines clause of the Eighth Amendment, goes without saying. But that didn’t give Trump pause.
“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks,” he said in his letter. “The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Are mere allegations, particularly when it’s purely pretextual given that the underlying motive is for Trump to put one of his minions on the Board of Governors, sufficient to establish cause for removal?
Under the Federal Reserve Act, the law that charters the central bank, Mr. Trump may dismiss a governor only if he can demonstrate cause, typically defined as professional neglect or malfeasance. In recent days, legal experts have questioned whether the president could satisfy that burden, given the fact that the allegations against Ms. Cook have not been proved in court and involve personal matters.
There is a question whether the president has the power under Article II to fire anyone he wants in the Executive Department, with or without cause. But even as the Supreme Court has undermined the precedent of Humphrey’s Executor to allow the president to fire members of board created to be independent of politics, it has suggested the Federal Reserve is different and beyond the president’s authority.
Is the Fed different from other independent agencies?
The Supreme Court seems to think so. Even as it let Mr. Trump fire two agency leaders in May, the unsigned majority opinion said the Fed may well warrant special protection. “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the opinion said.
One might suspect President Trump, of all people, to have a slight sensitivity to the presumption of innocence, given the two impeachments, four indictments, and one felony conviction he’s been through. Apparently not, or at least not that he cares enough about to let mere unproven allegations get in his way. In light of the fact that this is happening so he can seize control of the Fed, the allegations by Pulte being little more than his excuse, does he have the authority to remove Lisa Cook? Should he? Assuming there’s any merit to the allegations, should Cook have the opportunity to challenge them before cause could be found? Does Trump care?
*Tuesday Talk rules apply.
**Is it an emergency because the facts and circumstances dictate or because the president says so? In the District of Columbia, Trump declared a “crime emergency” when there was nothing emergent about it. But if the president says so, then emergency it is, giving the president vast powers to address actual emergencies?
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On the second paragraph I disagree that Waller and Bowman are his guys notwithstanding that he nominated them his first term and that they support rate reductions. During his first term the senate was still doing its job and rejected at least one of his Fed Board nominees. Agree Miran and whoever he picks here will follow orders.
On your question it seems like some level of due process should be required efote firing her, particularly giving her a chance to rebut the allegations. That may not be a full on trial, it could be some sort of administrative hearing in the same manner that other federal employees are supposed to get. There is also the question of whether the alleged misconduct is sufficient for removal when I think it occurred before she was appointed.
Agree this is all pretextual and he wouldn’t care if she was voting his way.
If Putin can do these kinds of things in Russia, why can’t Trump? They have a great relationship and are on a first name basis with each other. This is the greatest country in the world, we are number 1 and Russia is number 2. You can’t let Putin have these kind of powers and deny them to our President, the best, most powerful President on the face of the Earth, ever, can you? These presidential powers are in the Constitution somewhere, just go back and reread it until you find them. The vesting clause is rather broad and intentionally vague after all. See, I just found them. That was easy.
Just spitballin’ here, but perhaps Powell should consider firing Trump.
IIUC, he’s got as much authority as Trump does and far greater cause.
The real question is “Can he get away with it?” That will depend on whether she is guilty of mortgage fraud. If she knows that she committed fraud and that an investigation and prosecution could lead to a conviction, then she will quietly go away. If she didn’t, she’s likely to fight back and to have a good chance of winning.
This looks like another Beria-style “show me the man” prosecution. The recent proliferation of these politically motivated prosecutions on both sides of the aisle highlights the widespread corruption of the Swamp. All of these people are used to committing crimes with impunity, knowing that they are members of the club and therefore will never be prosecuted.
I’m ambivalent about this new paradigm where criminals who are “in the club” are no longer immune from prosecution, if that prosecution is useful for the party in power. Will it reduce the rampant corruption that pervades and surrounds centers of power? Will politicians and power brokers mitigate their greed for fear of prosecution after the next election? This might be good for the rest of us.
I’m not optimistic that fear of prosecution is going to lead to any reduction in corruption. Trump’s use of prosecution is based solely on retribution and political gains. He simply grabs on to something to justify it, whether or not any prosecutable offence exists.
Twofer Tuesday
Maybe I’m old fashioned but I still believe the standard for holding a position of public trust should be appearance of impropriety, not guilt beyond reasonable doubt. If the documents show Cook got discounted mortgages by declaring two properties as her primary residences in June and July of 2021 and she did nothing to correct the error for four years, then she has no business being on the central bank board. I agree with Jeff that it would be fair if Trump gave Cook an opportunity to explain the apparent impropriety. But Trump is not a fair man, We are not going to fight fascism by defending corruption. Trump is a threat to the constitutional order. But defending Lisa Cook’s shady real estate deals is not the hill we need to die on.
“Appearance of impropriety” is only applicable to judicial recusal. Focus.
Is it really? Shouldn’t we be expecting that from all the leaders, elected or appointed?
Those who avoid the appearance of impropriety also tend to avoid impropriety and I think we could use a little more of that from those who we chose to lead us and their subordinates.
[Ed. Note: Have you seen any evidence? If not, what makes you believe there is even the appearance of impropriety, no less impropriety itself?]
I was replying to the statement that the principle apply only to the judicial branch, I it should apply to all of them.
I think that the past few decades of news reports not to mention criminal convictions is plenty of evidence that impropriety abounds across all branches and levels of our government, federal and many states.
This is important: An accusation, without more, is nothing. You can choose to believe it, but that gives rise to neither impropriety nor appearance of impropriety. It only reflects your choice to believe something for which there is no evidence whatsoever. Sadly, this has become an epidemic among a certain credulous cohort, choosing to believe it utter baseless nonsense and lacking the ability to distinguish between reality and ability to distinguish between fantasy/conspiracy and facts.
You can believe something all you want. That does not make it real.