A Justice Department spokesperson declined to comment on the probe, which was earlier reported by The Wall Street Journal.
“Predictably and recognizing the flaws in challenging their illegal firing of Governor Cook, the administration is scrambling to invent new justifications for its overreach. This Justice Department — perhaps the most politicized in American history — will do whatever President Trump demands,” Cook’s lawyer, Abbe David Lowell, said in a statement.
Trump moved to fire Cook on Aug. 25 after one of his appointees alleged that she committed mortgage fraud related to two properties she purchased in 2021, before she joined the Fed.
Cook’s lawyers have also insisted that she did not engage in fraud.
“The questions over how Governor Cook described her properties from time to time, which we have started to address in the pending case and will continue to do so, are not fraud, but it takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again,” Lowell said.
Separately, on Thursday, the Justice Department urged a federal judge in Washington to allow for Cook’s immediate removal while she fights to keep her job, dismissing as “baseless” Cook’s claim that the president is attempting to fire her so that he can seize control of the Federal Reserve.
Cook’s lawyers have argued that the firing was unlawful because presidents can only fire Fed governors “for cause,” which has typically meant inefficiency, neglect of duty, or malfeasance while in office. They also said she was entitled to a hearing and a chance to respond to the charges before being fired, but was not provided either. Attorneys said in the court filing that Cook never committed mortgage fraud.
The Justice Department says the president has the discretion to fire Cook for cause and that his decisions cannot be reviewed by the courts.
Many economists worry that if the Fed falls under the control of the White House, it will keep its key interest rate lower than justified by economic fundamentals to satisfy Trump’s demands for cheaper borrowing.
