Trump Was Right To Fire Lisa Cook, And Here’s Why

President Donald J. Trump was right — and within his rights — to fire Federal Reserve Governor Lisa Cook for cause. The Federal Reserve Act explicitly gives the president authority to remove a governor “for cause” under 12 U.S.C. § 242.   

That authority does not turn on a criminal conviction; the statute contains no such requirement. And while Humphrey’s Executor v. United States did not involve the Fed, it affirmed the constitutionality of “for-cause” limits for independent-agency officers — the same principle Congress embedded in the Fed statute.  

Cook’s “cause” is alleged malfeasance tied to her mortgage paperwork. According to public reporting, in June 2021, Cook obtained a $203,000 mortgage in Michigan. Just two weeks later, in July 2021, she signed for a $540,000 mortgage in Georgia.

Each loan reportedly included a primary-residence occupancy clause requiring her to move in within 60 days and remain for at least one year unless the lender consented. If, as alleged, both applications represented those properties as “primary residences,” two homes in two states two weeks apart creates an irreconcilable timeline absent lender consent. Those facts remain subject to litigation, but they are sufficient to test integrity and meet a for-cause threshold pending judicial review.  

If prosecutors were to bring a case, the likely hook would be 18 U.S.C. § 1014 (false statements to a federally insured financial institution), which carries penalties up to 30 years in prison and a $1,000,000 fine per count. In practice, sentences are lower but still “hard time.”  

For example, in fiscal year 2021, the U.S. Sentencing Commission reported that 58 mortgage-fraud offenders were sentenced; roughly three-quarters received prison terms, with an average sentence of 14 months. Courts also regularly order restitution, and under 18 U.S.C. § 982, the government can forfeit property traceable to the offense, including the house itself.    

Put simply, mortgage fraud is no slap on the wrist. It puts people behind bars, often strips them of property, and can leave them with crushing debts for years.  

I spent four months in a Miami prison for defending the constitutional separation of powers and executive privilege. I was put in prison by a Democrat-controlled Congress and Department of Justice, a Democrat-appointed judge who stripped me of every possible defense before I got to trial, and an anti-Trump District of Columbia jury. This was the very poster child of lawfare and the partisan weaponization of our justice system.  

In prison, I met men doing time for precisely the kind of fraud Cook is alleged to have committed. These inmates were taken from their families, forced to forfeit assets, and saddled with restitution. If Lisa Cook, in fact, committed such a crime and escapes accountability when ordinary Americans do not, what does that say about our justice system?  

Critics howl that Cook cannot be removed until a court rules. That’s false. The Fed’s independence shields monetary policy from politics; it doesn’t immunize governors from documentary misrepresentations or integrity lapses. Nothing in § 242 requires indictments or verdicts before removal, and presidents have long demanded resignations or removed officials for ethical breaches well before any trial.  

President Richard Nixon removed himself, resigning under the weight of Watergate. His vice president, Spiro Agnew, quit in 1973 amid bribery and tax evasion investigations.

Reagan National Security Adviser John Poindexter resigned, and Oliver North was fired during Iran-Contra as soon as the diversion of arms sale proceeds came to light. President Carter’s budget director Bert Lance likewise stepped down in 1977 amid banking ethics allegations. In Biden’s White House, Science Adviser Eric Lander resigned after an internal investigation found mistreatment of staff.  

Most relevant to Cook’s case are the precedents inside independent agencies, where removal protections supposedly insulate officials. In 2021, President Biden fired Trump appointee Social Security Commissioner Andrew Saul after the Justice Department’s Office of Legal Counsel concluded the president could remove the SSA commissioner notwithstanding the statute’s “for cause” clause.

That same year, after the Supreme Court struck down tenure protections at the Federal Housing Finance Agency (FHFA) in Collins v. Yellen, Biden likewise removed Trump-appointed FHFA Director Mark Calabria. These are the closest analogs: Leaders of independent entities were removed, and the law tested (and sustained) presidential removal authority.  

Cook’s record on monetary policy only sharpens the “for cause” picture. I said publicly when Biden appointed her that it was a bad hire. As an academic, Cook produced comparatively little scholarship in core areas of monetary economics, banking, or financial markets.

By contrast, past governors such as Christopher Waller and Lael Brainard built their reputations on deep expertise in monetary theory and central banking. The gap in directly relevant scholarship leaves Cook among the least qualified Fed governors in recent history.  

The result? Cook played the dove when inflation was raging, aligning with the anti-Trump Jerome Powell to hold rates low. Her partisan actions helped buy Biden time in an election year so the Biden campaign team could spin a false “inflation is transitory” narrative. She bears considerable responsibility for the inflationary spiral that followed.  

When Donald Trump returned as the 47th president, Cook again aligned with Powell to hold rates artificially high. This has cost our country growth, jobs, and wage gains, even as it has inflated mortgage costs, credit card debt, and interest costs on servicing our national debt.    

Yet Cook’s firing is not about her incompetence and partisan weaponization of Fed policy — “cause” though her incompetence well might be. Nor is Cook’s firing an attack on the Fed’s independence.   

Cook’s firing is about the paperwork: two mortgages, two states, two weeks apart, both allegedly marked as a “primary residence.” On the face of such alleged malfeasance, cause exists, and that is enough for a president to act while the courts resolve the rest. The lesson is simple: In public service, integrity is judged in real time, not deferred until a jury renders a verdict.  

Peter Navarro is the White House Counselor for Trade and Manufacturing. His prison experience is documented in “I Went To Prison So You Won’t Have To” (War Room Books).