President Trump has doubled and tripled down on the abusive tactics that were deployed against him, so we should not be surprised that John Bolton’s case is not the only one on the lawfare docket today. This morning, the president said he would fire Lisa Cook, a Biden appointee to the Federal Reserve Board, if she does not resign her position based on mortgage fraud allegations by Bill Pulte, Trump’s director of the Federal Housing Administration.

Pulte’s main job at the FHA appears to be scrutinizing the housing loan applications of Trump’s political enemies. A thread in these cases is that people get lower interest rates on mortgages for a primary residence (the home they mainly live in) than for second homes and commercial properties. I recently detailed Pulte’s revival of long-stale allegations that (now) Senator Adam Schiff made misrepresentations along these lines on loan applications. Schiff is among Trump’s most prominent congressional foes, having been the top Democrat on the House Intelligence Committee promoting the Russiagate “collusion” narrative, and then playing key roles in pushing both Trump impeachments.

Back in April, Pulte referred Letitia James to the Trump Justice Department for a criminal investigation of whether she committed mortgage fraud. James, of course, brought the massive civil fraud prosecution by which she hoped to destroy Trump financially and politically — and yesterday I discussed the ruling by a state appeals court that threw out the approximately $500 million fine imposed against Trump (though it left the underlying business fraud verdict intact). Recently, Ed Martin, the head of the Trump DOJ’s task force on “weaponization” of the justice system (that’s DOJ’s main lawfare arm, which we are supposed to see as against weaponization), publicly pressured James to resign from office over the allegations and even made an appearance for media consumption outside one of the homes involved in the investigation. A couple of weeks back, Haley and Audrey reported that the Trump Justice Department had opened a grand jury investigation of James, apparently looking into possible irregularities in her probes of Trump and the National Rifle Association. (Last year, the Supreme Court allowed the NRA to proceed with a lawsuit alleging that New York’s state government had violated its First Amendment rights by coercing insurers to cease doing business with the NRA — see NRA v. Vullo (May 30, 2024)).

Pulte is now alleging that Cook, the above-mentioned Fed governor, committed mortgage fraud by claiming two different properties as her primary residence — one in Atlanta and the other in Michigan. Trump has been pressuring the Fed to lower interest rates and threatening to fire Fed Chairman Jerome Powell for failing to do so. Cook has voted along with Powell. (The stock market is surging today after Powell signaled that a rate cut may be imminent.) Today, Pulte alleged in a post on X that Cook had represented her Atlanta property as her primary residence in February 2023, even though (he says) she appears to have listed it as a rental property about six months earlier. (Those positions would not necessarily be inconsistent, but they raise obvious questions.)

To recap what I explained in May, the Trump administration, including the Justice Department, has been trying to induce a Supreme Court ruling that the president has authority to fire the heads of so-called independent agencies. Yet, the Fed’s independence is widely believed to be a boon for the economy, meaning that (among other bad outcomes) the stock market could tank if investors believed that the Fed’s functions were going to be controlled by partisan politics rather economic conditions. Consequently, both the Trump administration in advocating presidential authority over agencies, and the Supreme Court in signaling receptivity to that argument on constitutional grounds, have taken pains to distinguish the Fed from other independent agencies. (See Trump v. Wilcox (May 22, 2025).) That is, they have suggested that, even if the Court sided with the administration’s theory of executive power, the Fed could nevertheless maintain its independence.

This raises the stakes of Cook’s situation. If the president tries to fire her, it could undermine the strategy of carving the Fed out of the administration’s overarching position that the Fed is different from other independent agencies. If the administration’s explicit position were to be that the Fed is not independent, it could spook the justices; that would diminish the likelihood that they would rule Trump’s way on the issue of executive authority over agencies — which is vital to the administration’s effort to rein in the administrative state.

Assuming that Trump is not bluffing and that he would actually try to fire Cook if she doesn’t quit, there could be an out. The law merely limits the president’s authority to remove top officials at administrative agencies; it doesn’t say there are no circumstances in which it can properly be done. As with other agency heads, the Fed’s top officials are statutorily removable by the president “for cause” (see Section 242 of Title 12, U.S. Code). Section 242 does not define “cause,” but the term (based on other statutes and case law) is generally taken to mean misconduct or incompetence in office.

Let’s assume for argument’s sake that Cook made misrepresentations on mortgage applications, and even that such misrepresentations could be grist for a mortgage fraud prosecution. Trump could then try to say he is firing her “for cause” under the statute, not based on the inherent constitutional authority the Justice Department has controversially contended that presidents have to remove agency heads.

Would private misconduct — which is what Cook’s mortgage documents involve — constitute cause? Does cause need to be misconduct in executing the duties of the office? Could cause be established by private conduct that compromises a governor’s capacity to carry out her duties?

It would certainly be plausible to argue that a Fed governor credibly accused of defrauding a bank is unfit for a high, congressionally created post that, in part, involves regulating financial institutions and their holding companies. But whether that position would prevail in court is unclear.

Legally speaking, then, Cook’s situation could be very interesting. On the other hand, the Trump administration’s normalization of lawfare — and its exploitation in that project of such agencies as FHA, a non-law-enforcement agency that ostensibly exists to promote home ownership, not to provide a database supporting politicized fraud investigations — will only serve as a warning that decent people should avoid government service if they know what’s good for them.