WASHINGTON – President Donald Trump fired tens of thousands of federal workers to reshape the administration in his mold, but the legitimacy of his unprecedented removal of a leader of the country’s central bank will hinge on whether he has a good reason.

The Supreme Court decided not to block Trump from dismantling entire federal agencies or removing their leaders. The high court also refused to stand in the way of his removal of members of so-called independent boards, despite a 1935 decision that had shielded boards created by Congress from the president for nearly a century.

But as part of that May ruling, the Supreme Court said the president could only remove a member of the Federal Reserve’s board of governors for “cause,” which means a good reason. This is the issue that Lisa Cook, a Fed governor Trump said he fired, will contest in fighting her removal.

“What constitutes cause is not clear as a legal matter,” Kathryn Judge, a law professor at Columbia University, told USA TODAY. “No previous president has ever tried to fire a Fed governor for cause."

Trump accuses Cook of 'deceitful and potentially criminal conduct'

Trump announced in a letter on social media Aug. 25 that he was firing Fed governor Lisa Cook for cause.

His justification was the allegation that Cook committed mortgage fraud by signing documents that declared homes in Michigan and Georgia as her primary residence. Trump said the American people couldn’t trust her.

“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,” Trump wrote. “I have determined that there is sufficient cause to remove you from your position.”

William Pulte, the director of the Federal Housing Finance Agency, had raised the allegation in an Aug. 15 letter and recommended the Justice Department pursue criminal charges. But Cook hasn’t been charged and she vowed to fight her removal.

Cook's lawyer calls removal 'illegal'

Cook said Trump purported to fire her but she disputed his authority to do so and said he had no cause.

“I will not resign,” Cook said in a statement provided to USA TODAY. “I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Her lawyer, Abbe Lowell, said he would take “whatever actions are needed to prevent this attempted illegal action.”

“President Trump has taken to social media to once again ‘fire by tweet’ and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” Lowell said. "We will be filing a lawsuit challenging this illegal action.”

Congress established the Federal Reserve System with long tenures for governors and protections against removal to ensure that monetary policy is based on data, economic analysis and the long-terms interests of the American people, according to an agency statement.

As always, the Federal Reserve will abide by any court decision, the statement said.

How is the Federal Reserve different from other government boards?

The Supreme Court has refused to block the removal leaders of other so-called independent boards such as the Office of Special Counsel, the National Labor Relations Board (NLRB) and the Merit Systems Protection Board (MSPB).

In those cases, Trump had argued he controlled all aspects of the executive branch. The argument held even when leaders of some agencies were appointed to set terms, with a goal of avoiding political interference.

“Because the Constitution vests the executive power in the President, he may remove without cause executive officers who exercise that power on his behalf, subject to narrow exceptions recognized by our precedents,” the Supreme Court wrote in an unsigned order about the NLRB and MSPB.

But in that opinion, the justices signaled the Federal Reserve has a special status to keep it insulated from political interference. Congress created the Federal Reserve as a central bank in 1913 and directed that Fed officials may be dismissed only "for cause," not for political or policy disagreements.

“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 court wrote.

Justice Elena Kagan, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, disagreed with the decision by arguing Trump shouldn’t have been able to remove the labor board members. But they agreed on protecting the Fed.

“The majority closes today’s order by stating, out of the blue, that it has no bearing on ‘the constitutionality of for-cause removal protections’ for members of the Federal Reserve Board or Open Market Committee,” Kagan wrote. “I am glad to hear it, and do not doubt the majority’s intention to avoid imperiling the Fed.”

Trump's firing Cook appears to lack due process: experts

Trump has complained repeatedly about Fed Chairman Jerome Powell not lowering interest rates fast enough to spur the economy. But Trump hasn’t yet tried to remove Powell, whose term ends in May 2026.

"Our independence is a matter of law," Powell said in an April speech in Chicago. "So, you know, Congress could change that law. But, I don't think there's any danger of that," Powell added. "Fed independence has pretty broad support across both political parties and both sides of the Hill."

Instead, Trump said he was firing Cook based on an accusation of mortgage fraud he has wielded against others he viewed as political adversaries. New York Attorney General Letitia James, who led a civil lawsuit against Trump over his private real-estate business, and Sen. Adam Schiff, D-California, who led the first impeachment trial against Trump, are each under investigation.

But legal experts said Cook didn’t have a chance to respond formally to the accusation before Trump said he fired her − and that the allegation didn't cover her work at the Fed.

“An allegation based on unverified information is not enough, in any context,” John Coates, a law professor at Harvard University, told USA TODAY. “There's also basic elements of ‘due process’: the person accused is given notice of what is claimed, and a chance to respond.”

Judge, the Columbia law professor, said the allegation against Cook was in a "gray space" between what was purely about policy and clearly worthy of firing.

"If someone is abusing their position or otherwise derelict in performing their duties, that would justify a for-cause firing," Judge said. "That is not the allegation here.”

Judge added that Trump’s underlying reason for firing Cook – to get a more loyal governor aligned with his policies – wouldn’t justify removing her.

“An underlying challenge is that given his recent attacks on the Fed, it seems clear that the primary reason that President Trump is seeking to fire Governor Cook is that he disagrees with her on policy,” Judge said. “That is not a lawful reason to fire her.”

This article originally appeared on USA TODAY: Trump said he fired Fed governor Lisa Cook. But did he have a good reason?

Reporting by Bart Jansen, USA TODAY / USA TODAY

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