The US Supreme Court rules against Trump’s request to fire Lisa Cook, the governor of the Federal Reserve

The US Supreme Court refused on Monday to allow President Donald Trump to fire Federal Reserve Governor Lisa Cook as it stands to protect the central bank’s independence against an unprecedented challenge from a Republican president.

The court, in a 5-4 decision, blocked Trump’s bid to become the first president to remove a Fed chief since Congress created the central bank in 1913. Trump last August cited unsubstantiated mortgage fraud allegations in an attempt to fire Cook, the first black woman to serve as Fed governor.

Chief Justice John Roberts wrote that Trump “failed to give Cook the due process protections to which he was entitled by law. Without such protections, he would not have been able to properly challenge the charges the president has brought against him.”

Federal Reserve governors “do not serve at the pleasure of the president — instead they serve 14-year terms, and can only be removed ‘for cause,'” Roberts added.

As Fed governor, Cook helps set US monetary policy with the rest of the central bank’s seven-member board and the heads of the Fed’s 12 regional banks.

Cook’s term is scheduled to run until 2038, after being nominated by Democratic presidential candidate Joe Biden in 2022. An official filing made public last week revealed he spent $1.2 million on legal fees to fight his removal.

“The Supreme Court’s decision to vacate the lower court’s order and affirm the need for due process and due process recognizes that the independence of the Federal Reserve is essential to fulfilling the congressional mandate of price stability and high employment,” Cook said in a statement.

“This has never been about housing documents that were signed years before I became governor of the Federal Reserve,” he said. “It was an attempt to get rid of me with a made-up excuse because I refused to bow to political pressure and continued to impose interest rates based solely on what would best serve the American people.”

Congress in 1913 passed the Federal Reserve Act, which contained provisions to protect the central bank from political interference, including requiring governors to be removed by the president only “for cause.” However, the law does not define this term or establish removal procedures.

The administration disputed the broad view of Trump’s powers in the Cook case, saying that as long as the president identifies a cause for removal, that is within his “unreserved discretion.”

Cook’s lawyers argued that giving him that power would erode the Fed’s independence, disrupt markets and pave the way for future presidents to direct monetary policy.

US District Judge Jia Cobb in September ruled that Trump’s attempt to remove Cook without notice or a hearing may have violated his right to due process, while adding that the allegations made against Cook were probably not sufficient legal grounds to remove him under the Federal Reserve Act as they related to conduct that occurred before he served in office.

Trump’s targeting of Cook and a separate criminal investigation of his administration launched by then-Fed chairman Jerome Powell together represented the biggest challenge to the central bank’s independence since its inception.

Trump on social media revealed that the decision was made according to a “strict process” and said, without giving specifics, that his administration “will take the appropriate action immediately to ensure that a person who has done wrong will not make important decisions regarding the welfare of the United States of America!”

Roberts and fellow justice Brett Kavanaugh were in the majority, along with the court’s three liberal justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson. Conservative justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett dissented.

The ruling does not prevent the Justice Department from prosecuting Cook for alleged mortgage fraud. Democrats have criticized the Trump administration for what they say are politically motivated prosecutions and investigations of former and current critics of the president, including former FBI director James Comey and New York Attorney General Letitia James.

“As I’ve said many times, I believe Lisa Cook will be charged with mortgage fraud,” Bill Pulte said after Monday’s ruling. Pulte, a Trump administration official, first made Cook’s allegations public.

Trump can fire a member of the agency, court rules

Trump has also used executive authority to rapidly change policies on immigration, military service, federal employment and more. So far, the Supreme Court has allowed most of those policies to continue despite legal challenges, initially, although the tariffs decision was very different.

Even if Cook gets acquitted, the high court on Monday upheld Trump’s firing of a member of the Democratic Federal Trade Commission (FTC), expanding his power over the government and overturning its 1935 constitution that recognized the authority of Congress to protect the heads of certain regulatory agencies from removal by the president at will.

Overturning the landmark 1935 decision in Humphrey’s Executor v. In the United States, the justices, in a 6-3 decision, overturned tenure protections for FTC members established by Congress more than a century ago. Trump fired Rebecca Slaughter over policy differences.

Humphrey’s Probate Court rejected Democratic president Franklin Roosevelt’s attempt to fire an FTC member over policy differences.

A 1914 law passed by Congress allows the president to remove FTC commissioners only for cause — such as inefficiency, neglect of duty or misconduct in office. Similar defenses include officials from more than a dozen other private agencies, including the National Labor Relations Board and the Merit Plan Protection Board.

Slaughter was appointed to his post at the consumer protection and antitrust agency by Biden, a term that will expire in 2029.

Democratic officials and anti-monopoly groups have expressed concern that Trump’s firing seeks to end the agency’s scrutiny of large corporations.

“It gives a lot of power away from Congress and the president to shape economic decisions in a way that rewards the rich and powerful, at the expense of ordinary Americans,” Slaughter said in an interview with CNBC on Monday.

The Trump administration argues that the modern FTC has grown to wield more executive power in the decades since the Humphrey’s Executor decision, which ended that decision’s power.