Donald Trump and his allies have been accused of employing a 'pattern of lawfare' reminiscent of authoritarian regimes, after a new strategy emerged targeting political opponents with allegations of mortgage fraud. The claims, led by Bill Pulte, Trump appointee to the Federal Housing Finance Agency, have been levelled against New York Attorney General Letitia James, Senator Adam Schiff, and Federal Reserve Governor Lisa Cook.
Pulte has used his official position to publicly accuse the three of owner-occupancy fraud, alleging they falsely claimed investment properties as primary residences to secure better mortgage terms. In a letter to the Department of Justice, he claimed Cook 'falsified bank documents and property records to acquire more favourable loan terms'. Cook, the first Black woman appointed to the Fed board, has pledged to provide the facts, while James and Schiff have denied the allegations.
Trump supporters have celebrated the accusations as evidence of Democratic corruption. However, critics note that similar accusations have been made against Republicans, including Texas Attorney General Ken Paxton, a Trump ally. An Associated Press investigation found Paxton and his former wife claimed three homes as primary residences. Paxton has not commented on his own case but said of James: 'If she's done something wrong, I hope she's held accountable.'
Political experts have raised concerns about the selective use of the legal system. Don Moynihan, a professor at the University of Michigan, said: 'What we are seeing is the type of weaponisation we associate with authoritarian regimes, like Hungary, Turkey or Russia.' A federal housing spokesperson said they refer people of all political parties for mortgage fraud, while a White House official stated: 'Anyone who engages in criminal activity should be held accountable.'
Targeting a Fed governor is notable given Trump's repeated demands for lower interest rates. Cook's 14-year term, appointed by Joe Biden in 2022, does not expire until 2038, but Trump has threatened to fire her. Owner-occupancy fraud is not uncommon; Philadelphia Fed researchers in 2023 estimated over 20,000 such loans were made to fraudulent investors within a year.
