President Donald Trump formally established a “committee of inquiry” to investigate allegations that Federal Reserve Governor Lisa Cook made false statements related to “one or more mortgage instruments,” the White House announced Friday.
The extraordinary announcement is the latest development in Trump’s long-running effort to fire Cook, a nominee of former President Joe Biden, from the central bank’s board. Trump, who frequently urges the Fed to lower interest rates, recently said the failure to do so by his handpicked chair, Kevin Warsh, is the fault of a “hostile” board.
The committee comprises three executive branch officials, including Kevin Hassett, Trump’s top economic aide and a chief defender of the administration’s economic record, according to a presidential memorandum posted on the White House website and shared Friday on social media.
The other two members are Keith Sonderling, Labor secretary and acting head of the Office of Government Ethics, and Equal Employment Opportunity Commission Chair Andrea Lucas, according to the notice, which is dated Wednesday. No outside, independent arbiters are mentioned.
The highly unusual move, which hasn’t been used in nearly a century, is bound to fuel new accusations that Trump and his aides are eroding the Fed’s long-maintained independence while once again wielding government power against the president’s enemies. Congressional Democrats quickly slammed the announcement, while Cook’s lawyers expressed deep skepticism about the panel’s validity.
There is no modern precedent for such a committee, though past presidents have convened similar panels. President William Taft in 1912 appointed a committee to investigate the Board of United States General Appraisers, and President Herbert Hoover did the same in 1931 to probe statements by the president of the Navy League.
The Supreme Court, in its June ruling temporarily blocking Trump from his first attempt to fire Cook, cited Taft’s committee.
Trump’s panel and Cook are scheduled to appear for an in-person hearing at the White House on Nov. 5, two days after the midterm election, the memo states. Its members can consult with the Department of Justice and other agencies “to aid in its inquiry,” the notice says.
Cook’s attorneys, Abbe Lowell and Norm Eisen, sharply questioned the legitimacy of the inquiry, but nevertheless said the governor “welcomes the opportunity to present the facts so she can clear her name.”
“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 told CNBC in a statement.
“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 from the Federal Reserve Board,” they said.
“We have engaged with the White House to evaluate whether the process proposed has a…
Read More: Trump appoints committee to investigate statements by the Fed’s Lisa Cook
