Teh U.S.Court of Appeals for the District of Columbia Circuit has upheld a lower court’s decision denying a bid to dismiss a lawsuit alleging federal Reserve Board of Governors member Lisa Cook did not properly disclose potential conflicts of interest related to her prior work. The ruling, issued Friday, allows the case brought by the conservative advocacy group Judicial Watch to proceed.
The lawsuit centers on Cook’s involvement with the macarthur Fellows Program, where she served as a selection committee member while simultaneously working at the Federal Reserve. Judicial Watch alleges Cook violated ethics rules by participating in decisions impacting organizations also considered by the MacArthur Foundation. The court’s decision affirms that the group presented sufficient evidence to warrant further examination of whether Cook’s actions constituted a conflict of interest,rejecting arguments that the claims were speculative or lacked standing.
U.S. District Judge Christopher Cooper initially denied the dismissal request in November 2023,finding that Judicial Watch adequately alleged a violation of the Ethics in Government Act. The appeals court affirmed Cooper’s ruling, stating the group’s claims were ”plausible” and deserved to be litigated.
“The district court correctly held that Judicial Watch alleged facts sufficient to establish a reasonable probability that Cook’s participation in the MacArthur Fellows Program created a conflict of interest,” the appeals court wrote in its opinion.
The case now returns to the district court for further proceedings, potentially including finding and a trial. The outcome could led to further scrutiny of financial disclosure practices among Federal Reserve officials and potentially impact future appointments. Lisa Cook, appointed to the Federal Reserve Board in may 2022, is the first Black woman to serve as a governor. She has previously defended her disclosures, asserting she followed all applicable ethics rules.
Daniel Wiessner of Thomson Reuters reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.
