So a Federal Reserve governor allegedly signed two mortgage applications, weeks apart in 2021, attesting that both homes were her “primary residence,” and we are told this is a paperwork misunderstanding. (A “vacation home,” her lawyers explain, which is convenient, because a vacation home is, by definition, not a primary residence.) The lender, they add, knew where she actually lived, which is also convenient, because a borrower’s private wink at a loan officer is not a defense the tax code recognizes.
The White House wrote Ms. Cook on Aug. 5 that the President “is considering removing” her over the matter. Her attorneys replied this month that the allegation is a pretext, the same fever dream dug up last year by that persistent fellow Bill Pulte. (You may remember Mr. Pulte, who has the bad habit of reading the actual paperwork.) Never mind that the Federal Reserve Act allows a governor to be removed only “for cause,” and never mind that a governor who signs two mortgages claiming two primary residences is, by any reasonable accounting, in possession of cause enough.
Last June the Supreme Court held in Trump v. Cook that the governor is “entitled to notice and some opportunity to respond,” which is to say the President cannot fire her in the middle of the night without a letter. So the White House sent a letter. Notice has been had. Opportunity is being had. The Chief Justice, writing for the majority, took care to stress that Fed independence is important, which is a fine principle, and one that ought to begin with a governor who can be bothered to fill out a mortgage form honestly. (Independence from the truth is a different matter.)
Ms. Cook’s lawyers then mounted an argument that is at once inventive and beside the point. “In 1993, President Trump reportedly acquired ‘primary’ residence mortgages for two different Florida homes just seven weeks apart,” they wrote, citing a news account. “According to reports, Treasury Secretary Scott Bessent and Attorney General Todd Blanche have both entered into ‘primary’ residence mortgages for multiple homes.” Several things can be said here. First, Mr. Trump’s 1993 mortgages are not the question before us. Second, the Treasury Secretary and the Attorney General are not Federal Reserve governors. Third — and this is the part the commentariat prefers not to dwell on — the Federal Reserve Act says the President may remove a governor for cause. It does not say he may remove a governor only if no other official in Washington has ever filled out a mortgage funny.
But I digress.
We are told it is a “frivolous political fight,” which puts one in mind of other so-called frivolous fights. Was it frivolous to rename a body of water that everyone had been calling the Gulf of Mexico for two hundred years? Was the matter of the Sharpie on the hurricane map really a tempest (sorry) in a teapot? Did the question of which inauguration drew the bigger crowd deserve weeks of cable shrieking? The public, one gathers, was perfectly capable of judging those questions for itself. It is also capable of judging whether a Fed governor who signs two mortgages asserting both homes are primary is the sort of person who ought to be setting interest rates for the country.
Chief Justice Roberts has written that after due process is exhausted, courts may “assess the validity and sufficiency of such charges.” One looks forward to the assessment. The Chief also stressed Fed independence, which is again a worthy subject, and one Ms. Cook might have advanced by not handing the White House a dual-primary-residence mortgage file with a bow on it.
By the way, when is the Fed’s inspector general going to release the report on the central bank’s building renovations, the one the Trump Administration tried to turn into a criminal investigation of former Chair Jay Powell? If the renovations were a scandal, fine. Show us the report. If they were not, also fine. The longer the IG sits on it, the louder the suspicion grows that the renovation story was the scandal’s prequel, not its climax. Either way, the public is owed the answer.
Round two is coming. The Justices may be gathering for oral argument in Trump v. Cook II before the leaves turn. Place your bets accordingly.