Lisa Cook’d: DOJ To Investigate Fed Governor, Urges Her Removal Over Alleged Mortgage Fraud

The saga surrounding the upcoming termination of the Fed’s DEI hire just escalated dramatically after the Justice Department announced it would investigate Fed Governor Lisa Cook, after a top Justice official informed Fed Chair Jerome Powell of the probe and encouraged him to remove her from the board, in a letter sent Thursday.

Ed Martin, the DOJ official who led similar investigations into Adam Schiff NYAG General Letitia James, told Powell that Cook’s case “requires further examination.” 

“At this time, I encourage you to remove Ms. Cook from your Board,” Martin wrote. “Do it today before it is too late! After all, no American thinks it is appropriate that she serve during this time with a cloud hanging over her.”

Federal Housing Finance Agency Director Bill Pulte wrote a letter to Attorney General Pam Bondi and Martin on Aug. 15 suggesting that Cook may have committed a criminal offense. The letter alleged that Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”

Cook on Wednesday said she intended to remain at the central bank, after Trump also called for her resignation. She may, however, find that difficult to do with a criminal probe – or worse - hanging over her head. 

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in an emailed statement via a Fed spokesperson. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”

“This is a new attempt of the administration to gain more control over the Fed,” said Claudia Sahm, chief economist at New Century Advisors and a former Fed economist. “They’re pulling as many different levers as they can find to get that control.” The outspoken Democrat Sahm is best known for dumping on her own “rule’ – which was ripped off from Goldman’s former chief economist Ed McKelvey – so the spike in unemployment wouldn’t show the US economy as sinking into a recession during the Biden admin. 

A resignation would create another opening for Trump to fill on the Fed board as the president piles pressure on the central bank to lower rates. Trump has lashed out at Powell as “Too Late” for not slashing rates months ago, and suggested he too should step aside. Trump has also heavily criticized Powell and the Fed over the cost of its ongoing headquarters renovation project.

One Trump’s campaign to eliminate Cook is successful, it will give him the opportunity to exert more influence over the US central bank by securing a majority on its seven-member board of governors.