On Monday, a federal appeals court denied Donald Trump’s attempt to fire Federal Reserve Board Governor Lisa Cook. It remains to be seen what the White House will try to do next, but in the meantime it is valuable to see how we got here in the first place.

A few weeks back, Bill Pulte, the Federal Housing Finance Agency (FHFA) Director and the billionaire heir to a housing construction firm, claimed to have found evidence that Cook had committed mortgage fraud. Donald Trump immediately tried to fire Cook from her position, with the intention of getting another seat on the Fed’s seven-person board.

This attempted firing raised several serious questions –  most immediately, whether the FHFA director is supposed to be rifling through the mortgage documents of Trump’s political opponents.

Previously, Pulte had claimed to have found evidence that Senator Adam Schiff (D-CA) had committed mortgage fraud. Schiff had led the first impeachment case against Trump in 2019 as a member of the House. Pulte also claimed to have found evidence of mortgage fraud by Letitia James, the Attorney General of New York, who had gotten a civil conviction against Trump for, among other things, lying on loan forms.

But it also raised questions about Trump’s power as president. While the Republican Supreme Court claimed to find wording in the Constitution that allowed the president to freely fire members of ostensibly independent agencies like the Federal Trade Commission, which overseas antitrust law, and the National Labor Relations Board, which monitors labor law violations, it also apparently found wording that prevented the president from behaving similarly towards the Fed.

The Republican Supreme Court’s argument for the Fed’s special treatment was a bit more complicated, but it would only be a slight simplification to say that it was because the Fed is important. The Court apparently accepted the argument of the vast majority of economists that it would be bad news to have a Fed under the complete control of the president. For this reason, they appeared to leave in place the pre-existing standard for appointees of independent agencies: that they could only be removed for cause.

This is where Pulte’s accusation appeared useful. Trump could now pronounce Cook, a Black woman (like Letitia James), guilty of mortgage fraud, and therefore someone who could be fired for cause. But this was never the open and shut case that Trump and his sycophants claimed.

First, it was not clear that what Cook had allegedly done amounted to fraud. According to Pulte, she had listed two different homes as primary residences on mortgage applications. If true, this may violate the law, but it is a common breach that is rarely prosecuted. It turns out three Trump cabinet members, as well as Pulte’s parents, seem to have done the same thing. If Cook’s actions had violated the law, it probably ranks as something somewhat more serious than a traffic ticket, but considerably less serious than the spousal abuse that Trump laughed off as a real crime earlier this week.

There was also the second point, that the alleged offense had occurred prior to Cook’s appointment to the Fed. Can “cause” refer to an action someone had done before being appointed to office?

There were allegations of sexual assault against Trump Defense Secretary Pete Hegseth before his appointment. Robert F. Kennedy, Jr. was an admitted heroin addict in his youth. While both cabinet members are political appointees who clearly hold their positions at the president’s discretion, would these past offenses in principle be grounds for removal for cause?

And then there is the final point. Cook was never proven to have done anything wrong. All Trump had was Pulte’s accusation of wrongdoing.

It turns out Pulte’s accusation is not worth very much. NBC News, among other news outlets, obtained loan documents showing that Cook had identified her Atlanta house as a “vacation home,” which would seem to be in full compliance with the law. The question is now whether Trump can fire a Fed governor over a seemingly false allegation from one of his political appointees. That seems to be a pretty clear-cut loss for Team Trump, but I can’t speak for the Republican Supreme Court.

This piece was adapted from Dean Baker’s Beat the Press blog.

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