Former President Donald Trump and his allies are facing serious accusations of executing a “pattern of lawfare,” reminiscent of tactics employed by authoritarian regimes in countries like Hungary and Russia. This new strategy involves targeting political opponents through allegations of mortgage fraud. Initially, these accusations came from Letitia James, the Attorney General of New York, followed by Adam Schiff, a senator from California. Now, Trump's focus has shifted to Lisa Cook, a Federal Reserve governor, as he demands her resignation and threatens to fire her.
Lisa Cook, who made history as the first Black woman appointed to the Federal Reserve board, was appointed in 2022 by President Joe Biden. Her term is set to continue until 2038, but Trump’s mounting pressures have put her position in jeopardy. Leading this aggressive strategy against Cook is Bill Pulte, heir to a home construction fortune and a controversial appointee by Trump to lead the Federal Housing Finance Agency (FHFA). The FHFA oversees regulations for federal housing lenders such as Fannie Mae and Freddie Mac.
Pulte has taken to social media to publicly accuse Trump’s opponents of owner-occupancy fraud. This type of fraud occurs when individuals misrepresent a second home or investment property as their primary residence to secure better mortgage terms. In his allegations, Pulte claims that Cook “falsified bank documents and property records to acquire more favorable loan terms.” In a letter to the Department of Justice, he reiterated these claims, demanding accountability.
Despite the serious nature of these allegations, they remain unverified. Both Letitia James and Adam Schiff have categorically denied the accusations. In response, Cook has pledged to “provide the facts” after compiling the necessary information to address the claims against her.
The accusations have been met with celebration among Trump’s allies, who view them as proof of corruption within the Democratic Party. Conservative commentator Laura Ingraham declared the situation as “poetic justice” concerning Schiff's alleged fraud. However, it’s important to note that accusations of mortgage fraud are not limited to Democrats. A recent investigation by the Associated Press highlighted Texas Attorney General Ken Paxton, a Republican and staunch Trump supporter, who along with his then-wife, claimed multiple homes as their primary residences.
Political analysts have expressed alarm that Trump and his allies may be using the legal system as a weapon to intimidate their opponents. Don Moynihan, a professor at the University of Michigan, emphasized the troubling nature of this pattern, likening it to tactics seen in authoritarian regimes. He warned that the selective application of the law could undermine democratic principles.
In response to inquiries, a spokesperson from the federal housing sector affirmed that referrals for mortgage fraud are made regardless of political affiliation, emphasizing that accountability should be universal. A White House official also stated, “Anyone who engages in criminal activity should be held accountable. No one is above the law.”
Trump’s efforts to target a Federal Reserve governor reflect his ongoing animosity toward the institution. Unlike James and Schiff, who have actively investigated Trump, Cook has not positioned herself as a direct adversary. However, her influential role in setting interest rates makes her a potential target. Since Trump took office, he has repeatedly pressured the Fed to cut rates, a move that contradicts the tradition of maintaining the Fed's independence from political influence.
This year, the Federal Reserve has not lowered rates in any of its five meetings, frustrating Trump. He has publicly criticized Fed Chairman Jerome Powell and has even suggested firing him. Pulte has actively engaged in this narrative, even drafting a letter for Trump to dismiss Powell, which remains unsent.
In July, Trump directed his attention toward renovations at the Federal Reserve’s headquarters, claiming they were excessively costly. Although the Fed attributed the increased expenses to unforeseen complications, Trump’s scrutiny of Cook intensified. If Cook were to resign, it would create an opportunity for Trump to appoint a successor more inclined to support his economic policies.
In her defense, Cook has asserted her commitment to remaining in her position, stating, “I have no intention of being bullied to step down from my position because of some questions raised in a tweet.” She emphasized her dedication to transparency and accountability as a member of the Federal Reserve.
As tensions rise, Trump’s threat to fire Cook if she does not resign adds another layer of complexity to the ongoing political landscape.
