FILE PHOTO: Jay Clayton, Chairman of the U.S. Securities and Exchange Commission, speaks at the Economic Club of New York luncheon in New York City, New York, U.S.,September 9, 2019. REUTERS/Shannon Stapleton/File Photo
June 20, 2020
By Chris Prentice and Katanga Johnson
WASHINGTON (Reuters) – Friday’s surprise bid by the U.S. Department of Justice to replace a top federal prosecutor has thrust one of the Trump administration’s more low-profile officials into a partisan storm which he is likely to try to quickly exit, said those who know him.
Over the past 12 hours, Securities and Exchange Commission (SEC) Chairman Jay Clayton has come under enormous pressure to withdraw his nomination to replace U.S. Attorney in Manhattan Geoffrey Berman after he made it clear he was being ousted.
In his post at the Southern District of New York (SDNY), Berman has led the prosecution of high profile corruption and Wall Street crimes, and been investigating President Donald Trump’s personal lawyer, Rudolph Giuliani.
“Clayton can allow himself to be used in the brazen Trump-Barr scheme to interfere in investigations by the U.S. Attorney for SDNY, or he can stand up to this corruption, withdraw his name from consideration, and save his own reputation from overnight ruin,” Schumer tweeted on Saturday.
Clayton’s nomination for the SDNY role stunned former SEC officials and industry insiders who have worked with Clayton, a former corporate lawyer and political independent who has steered well clear of partisan controversy during his tenure.
“Given the controversy, I think he will bow out,” said J.W. Verret, a securities law professor at George Mason University who said he knows Clayton from his work on the SEC’s Investor Advisory Committee. He described Clayton as “mild-mannered” and said he has “played it straight up the middle” at SEC.
While Clayton has been criticized by Democrats and consumer advocates for pushing the Trump administration’s agenda to cut red tape, he is generally respected for his expertise and described by those who deal with him as thoughtful and affable.
“He says what he means and he follows through on what he says. And he cares deeply about the American public,” said Scott Bauguess, a University of Texas professor and former SEC official. “It is not clear to me that he is the right person for the SDNY job if the objective is to do the President’s bidding against his own judgment.”
Clayton could not be reached for comment on Saturday. His spokeswoman did not immediately respond to requests for comment.
In an email Clayton sent to staff just after midnight on Friday, seen by Reuters, the SEC chair said it was “a great honor to be considered for this important position” and that he remained “fully committed” to SEC work pending his confirmation.
Three people with knowledge of Clayton’s thinking said the SEC chair, whose role is based in Washington DC, had been on the lookout for a senior government post based back in New York where he was based prior to joining the SEC.
But they and other white collar attorneys who know Clayton said they thought he would no longer want the role now Berman had made it clear he was being ousted. Verret speculated that Clayton may not have had all the facts when agreeing to be nominated.
“I really think Clayton is going to do the right thing here … I’ve gotten to know him a bit and I just don’t think he would put up with what appears to be nefarious intent,” he added.
(Writing and additional reporting by Michelle Price; Editing by Marguerita Choy)
