sues

Aug. 28 (UPI) — The Trump administration Thursday night announced a second criminal referral against Federal Reserve Board Governor Lisa Cook for mortgage fraud, as she sues President Donald Trump for attempting to illegally dismiss her.

William Pulte, the agency’s director, announced the second referral on X, stating “3 strikes and you’re out.”

“Lisa Cook needs to step aside — with the evidence coming out on her 3rd mortgage and her alleged misrepresentations to the Federal Government ethics department, I believe she is causing irreparable harm to our beloved Federal Reserve,” Pulte said in a second statement. “How is Jay Powell fine with her behavior?”

Pulte had sent the first criminal referral to Attorney General Pam Bondi on Aug. 26, accusing Cook, the first Black woman to sit on the independent board, of falsifying documents and committing mortgage, bank and wire fraud. She is accused of signing two separate mortgage documents for two separate properties that claim each is her primary residence. One property is in Michigan and the other is in Atlanta. The two documents were allegedly signed two weeks apart during the summer of 2021.

The new referral is about a third property in Cambridge, Mass.

Pulte states Cook misrepresented the property by calling it her “second home” on a 15-year mortgage document in December 2021, and then listing it on a U.S. ethics form as an “investment/rental property” weeks later.

Trump moved to fire Cook on Monday, after calling for her to resign, citing the first criminal referral as reason for the dismissal, the legality of which was unclear and has prompted staunch opposition from Democrats.

The second referral was announced hours after Cook sued Trump for attempting to fire her.

“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed to occur, would be the first of its kind in the Board’s history,” the suit said.

“It would subvert the Federal Reserve Act, which explicitly requires a showing of ’cause’ for a Governor’s removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not,” the case introduction continued.

“The President’s actions violate Governor Cook’s Fifth Amendment due process rights and her statutory right to notice and a hearing under the [Federal Reserve Act],” it further stated. “Accordingly, Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work.”

The suit names Trump, Fed Chairman Jerome Powell and the Fed Board of Governors as defendants, and a hearing for a request for a temporary restraining order has been slated for 10 a.m. EDT on Friday in front of Federal Judge Jia Cobb.

Should she win the case, her lawyers ask for Trump to declare she remains an active Fed governor, and that board members can only be removed for cause, as described in the Federal Reserve Act, the law under which Trump is attempting to fire her.

The suit also seeks “an award of the costs of this action and reasonable attorney fees under the Equal Access to Justice Act or any other applicable law,” as well as an “award of all other appropriate relief.”

Trump campaigned on retaliating against political opponents. Since returning to the White House in January, he has used his executive powers to strip lawyers and law firms that have represented or are connected to his rivals of security clearances.

Two other Democrats and Trump critics — New York Attorney General Letitia James and Sen. Adam Schiff of California — have also been accused of mortgage fraud by the Trump administration.

Trump’s attempt to fire Cook follows months of the president applying political pressure on her boss, Powell, to lower interest rates. Despite the insults and demands from Trump, Powell has resisted, stating economic policy will not be determined by politics.

Democrats have accused Trump of perpetrating an illegal authoritarian power grab by firing Cook. On Thursday night, Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Banking, Housing and Urban Affairs Committee, accused Trump of attempting to “turn the Federal Reserve into the ‘Central Bank of Trump.'”

“The Fed makes decisions based on economic data — not political pressure,” she said in a statement. “This move would undermine the world’s confidence in our economy and harm working people.

“And it is illegal.”

Federal Reserve Governor Lisa Cook has filed a lawsuit arguing that United States President Donald Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms between the president and the central bank.

The lawsuit was filed on Thursday, three days after Trump published a letter saying Cook was removed from her job.

In the lawsuit, Cook argues that Trump violated federal law in attempting to remove her from her position. Under the Federal Reserve Act of 1913, presidents may only remove a Federal Reserve governor “for cause”, a high bar generally understood to mean grave misconduct or dereliction of duty.

As the country’s central banking system, the Federal Reserve is considered independent from political branches of government like the presidency or Congress. In theory, that allows it to set monetary policy without political influence.

But concerns about whether the Fed can maintain its independence from the White House under Trump could have a ripple effect throughout the global economy. The US dollar stumbled against other major currencies after Trump first said he would remove Cook.

“President Trump’s attempt to fire Dr Lisa Cook is continuing to add uncertainty and chaos to the US economy,” Sameera Fazili, the former deputy director of the National Economic Council, told Al Jazeera.

Fazili, who previously served as a staff member at the Federal Reserve Bank of Atlanta, explained that disruptions at the central bank would negatively impact US businesses.

“An economy needs stable and predictable laws to function smoothly. That’s how you earn investor trust and raise capital for your businesses,” she said, adding: “I applaud Dr Cook for standing up and fighting for the rule of law.”

Cook’s lawsuit is likely headed to the Supreme Court, where a conservative majority has at least tentatively allowed Trump to fire officials from other agencies.

But the court recently signalled that the Federal Reserve may qualify for a rare exception.

In its May decision in the case Trump v Wilcox, the Supreme Court argued that Federal Reserve governors are distinct from other federal employees, because the bank “is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States”.

Mortgage allegations

Still, Trump, a Republican president, has argued that he does have cause to remove Cook from her post.

In his August 25 letter, he accused Cook of committing mortgage fraud in 2021, a year before she joined the Federal Reserve’s governing body.

“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” he wrote.

“In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

The Federal Reserve Act does not define what removal “for cause” means, nor does it lay out any standard or procedures for removal.

Trump, however, has argued that Cook’s actions amount to “gross negligence”, though she has denied the allegations.

No president has ever removed a Federal Reserve board member, and the legal standard governing removals from the central bank has never been tested in court.

A Federal Reserve spokesperson said on Tuesday, before the lawsuit was filed, that the bank would abide by any court decision.

Cook was appointed to the Federal Reserve in 2022 by former President Joe Biden, a Democrat, and is the first Black woman to serve on the central bank’s governing body.

Questions about Cook’s mortgages were first raised in August by William Pulte, a Trump appointee who is the director of the Federal Housing Finance Agency.

Pulte referred the matter to Attorney General Pamela Bondi for investigation.

Cook took out the mortgages in Michigan and Georgia in 2021 when she was an academic, researching and teaching economics.

An official financial disclosure form for 2024 lists three mortgages held by Cook, with two listed as personal residences. Loans for primary residences can carry lower rates than mortgages on investment properties, which are considered riskier by banks.

Some experts have questioned whether transactions that preceded Cook’s appointment to the Federal Reserve would be adequate cause to remove her. After all, Cook’s mortgages were in the public record when she was vetted and confirmed by the Senate in 2022.

Trump has made several allegations of mortgage fraud against perceived political adversaries, including Senator Adam Schiff of California and New York Attorney General Letitia James, both Democrats.

Like Cook, Schiff and James have denied wrongdoing.

Pushing for influence on the Federal Reserve

For her part, Cook said in a statement earlier this week that “no causes exist under the law, and [Trump] has no authority” to remove her from her job.

Her lawyers have also said that Trump’s “demands lack any proper process, basis or legal authority”.

Since Trump took office for a second term in January, critics have accused him of seeking broad powers beyond the presidency, across all branches of government.

He has sought to remove inspectors general and the heads of independent agencies he felt were unfriendly to his policies, despite federal laws that protect their employment.

Such laws require the president to clearly define the cause for removing federal employees. Those causes include neglect of duty, malfeasance, and inefficiency.

While the Federal Reserve Act does not identify those causes in its terms, they could be used as a guide for courts to determine if Trump can legally fire Cook.

In Thursday’s lawsuit, Cook’s lawyers said nothing she has done would amount to such “cause”.

“Neither the type of ‘offense’ the President cited nor the threadbare evidence against Governor Cook would constitute ‘cause’ for removal even if the President’s allegations were true – which they are not,” they wrote.

“The President would not have ‘cause’ to remove a Federal Reserve Governor even if he possessed smoking gun evidence that she jaywalked in college.”

The lawsuit also argues that the president violated Cook’s right to due process by attempting to terminate her position without notice.

Trump has faced other lawsuits for attempting to remove federal officials, including in the Trump v Wilcox case.

That case concerned Gwynne Wilcox, the first Black woman to sit on the National Labor Relations Board, which hears private-sector labour disputes.

Cook’s departure from the Federal Reserve, however, would allow Trump to name his fourth pick to the bank’s seven-member board.

The president has repeatedly berated Federal Reserve Chair Jerome Powell for not lowering interest rates and for his alleged mishandling of a multibillion-dollar renovation project.

While Trump has previously threatened to remove Powell before his term ends in May, he has since backed away from those remarks.

A full term for a Federal Reserve governor like Cook, meanwhile, is 14 years.

Aug. 27 (UPI) — The NAACP is suing Texas over its new congressional maps, calling them racially gerrymandered in violation of the Voting Rights Act.

The nation’s largest civil rights organization filed the motion Tuesday seeking a preliminary injunction against the new maps in ongoing litigation in a 2021 case it filed against Texas over its previously drawn maps, which it said “intentionally diluted the votes of Black Texans and other Texans of color.”

“The State of Texas is only 40% White but White voters control over 73% of the state’s congressional seats,” Derrick Johnson, president and CEO of the NAACP, said in a statement.

“It’s quite obvious that Texas’ effort to redistrict mid-decade, before next year’s midterm elections, is racially motivated. The state’s intent here is to reduce the members of Congress who represent Black communities, and that in, and of itself, is unconstitutional.”

The NAACP, along with civil rights groups and the Justice Department, under the previous Biden administration, sued Texas in December 2021, alleging Texas’ then newly drawn congressional maps to be in violation of the Voting Rights Act and the 14th Amendment.

Based on new census data, Texas had gained 4 million people, 95% of whom were people of color, gaining the state two new congressional House seats. The NAACP argues the new maps based on the new information were gerrymandered as the new seats, despite the demographic shift, were draw to favor Anglo-majority districts.

In March — amid litigation and after President Donald Trump won re-election and returned to the White House — the Justice Department dismissed its claims in the case, the trial for which ended on June 11.

Less than a month afterward, the Justice Department sent Texas a letter arguing that four Democrat-held congressional seats were racially gerrymandered, instructing Gov. Greg Abbott, a Republican, to redraw them.

Those redrawn maps are expected to give Republicans five additional seats in the U.S. House of Representatives, which were recently passed by both the Texas state House and Senate.

Democrats have been furious with this change, accusing the Trump administration of attempting a power grab to increase the Republicans’ odds of maintaining control of the congressional branch following next year’s midterm elections.

The NAACP, represented by the Lawyers’ Committee for Civil Rights, argued in the Tuesday court document that Texas “overtly targeted districts where multiple minority groups together constituted a majority of the voters.”

“Dismantling Congressional districts because of their racial composition is intentional discrimination,” the civil rights group said in the motion.

The civil rights group is asking the court for a permanent injunction against the state from enforcing the alleged gerrymandered maps.

“We now see how far extremist leaders are willing to go to push African Americans back toward a time when we were denied full personhood and equal rights,” NAACP Texas President Gary Bledsoe said in a statement.

“We call on Texans of every background to recognize the dangers of this moment. Our democracy depends on ensuring that every person is counted fully, valued equally and represented fairly.”

Elon Musk on Monday ramped up his legal feud with OpenAI as his companies filed a new lawsuit against OpenAI and Apple accusing both of anticompetitive behavior in the artificial intelligence industry in a growing clash of tech titans.

Apple and OpenAI announced a partnership last year that would allow Apple customers to connect with OpenAI’s chatbot, ChatGPT, on iPhones. Musk’s social media firm X and artificial intelligence company X.AI LLC say that the deal has hindered their ability to compete and has locked up markets to maintain what they describe as Apple and OpenAI’s monopolies.

“Plaintiffs bring this suit to stop Defendants from perpetrating their anticompetitive scheme and to recover billions in damages,” according to the lawsuit filed in U.S. District Court in Texas on Monday. Musk’s companies, Bastrop, Texas-based X and Palo Alto-based xAI, are seeking a permanent injunction against Apple and OpenAI and more than $1 billion in damages.

The lawsuit adds to a long-running fight between Musk and OpenAI’s Chief Executive Sam Altman. Musk was an early investor in OpenAI but later left its board and started a rival AI business, xAI. Musk has an ongoing lawsuit against OpenAI and Altman, accusing them of fraud and breach of contract over OpenAI’s efforts to change its corporate structure.

“This latest filing is consistent with Mr Musk’s ongoing pattern of harassment,” OpenAI said in a statement.

Musk companies’ lawsuit claims ChatGPT has at least an 80% market share in the generative AI chatbot market, whereas xAI’s chatbot Grok has just a few percentage points in market share.

“As a result of Apple and OpenAI’s exclusive arrangement, ChatGPT is the only AI chatbot that benefits from billions of user prompts originating from hundreds of millions of iPhones,” according to xAI’s lawsuit. “This makes it hard for competitors of ChatGPT’s generative AI chatbot and super apps powered by generative AI chatbots to scale and innovate.”

xAI has asked to integrate Grok directly with Apple’s software ecosystem, iOS, but hasn’t been allowed to do so, Musk’s companies said in their lawsuit. While users can access other AI chatbots on iPhones by using a web browser or downloading an AI chatbot’s app, “those options do not provide the same level of functionality, usability, integration, or access to user prompts as ChatGPT’s first-party integration with Apple,” the lawsuit says.

The lawsuit also accuses Apple of deprioritizing the AI chatbot apps of OpenAI’s competitors in the App Store.

Apple did not immediately respond to The Times’ request for comment on the lawsuit.

Earlier this month, Musk said on X that he planned to take legal action against Apple, causing a sparring match on the social media platform between him and OpenAI’s Altman.

“Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation,” Musk wrote on Aug. 11.

Altman later posted on X, “This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn’t like.”

Apple previously told Bloomberg that it collaborates with many developers “to increase app visibility in rapidly evolving categories” and features thousands of apps in charts, algorithmic recommendations and curated lists by experts using objective criteria.

“The App Store is designed to be fair and free of bias,” Apple told Bloomberg.

Apple has also faced backlash and criticism from some developers and the Department of Justice over the way it operates its App Store. Last year the DOJ sued Apple, accusing it of engaging in practices that prevented other companies from offering apps that compete with Apple’s offerings.

At the time, Apple said that if the government’s lawsuit was successful, it would hurt its ability to create the type of technology people expect from Apple “where hardware, software, and services intersect.”

“It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology,” Apple said.

Staff writer Queenie Wong and Editorial Library Director Cary Schneider contributed to this report.