President Donald Trump’s pick to be the next U.S. attorney for the Southern District of New York, Jay Clayton, is the current chairman of the Securities and Exchange Commission and a longtime corporate lawyer with deep connections to Wall Street. But he has no experience as a federal prosecutor.
On his 2017 SEC financial disclosure form, for example, Clayton listed Deutsche Bank as a source of compensation "exceeding $5,000." The bank was a client of his former law firm Sullivan & Cromwell.
The German bank has repeatedly run afoul of federal and state laws and was implicated in large money laundering schemes. It is also at the center of a battle between the Trump administration and House Democrats over the release of the president's financial records. The bank has played critical role in Trump's real estate business, lending him more than $360 million since 2012.
When he took the job at the SEC in 2017, Clayton agreed to recuse himself from cases involving Deutsche Bank and other clients he had previously represented for two years. While at Sullivan & Cromwell, he has advised Goldman Sachs and Barclays Capital, among many others.
U.S. Attorney General William Barr announced Friday night that Trump intends to nominate Clayton to replace Manhattan U.S. Attorney Geoffrey Berman, who has overseen a number of investigations involving the president and his political campaign. But a few hours later, Berman said he was not resigning, and Saturday morning showed up to work.
The battle for control of the office escalated Saturday when Barr said Trump had fired Berman. "As we discussed, I want the opportunity to choose a distinguished New York lawyer, Jay Clayton, to nominate as United States Attorney," Barr said in a letter to Berman.
Clayton is facing an uphill battle to win Senate confirmation. Senate Minority Leader Charles Schumer, D-N.Y., has already called on Clayton to drop out. "Jay 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 said on Twitter.
Schumer also called on the Justice Department's inspector general as well as its office of professional responsibility to investigate why Trump and Barr dismissed Berman.
Meanwhile, Senate Judiciary Committee Chairman Lindsey Graham, R-S.C., said Saturday that he would not move forward on confirmation hearings for Clayton unless the appointment is supported by New York's two U.S. senators, Schumer and Sen. Kirsten Gillibrand, D-N.Y.
Clayton said in a note to SEC employees just after midnight on Saturday that he will stay "fully committed" to his current job as SEC chairman until being confirmed. "It is a great honor to be considered for this position," Clayton said.
Clayton has been widely expected to step down after the November election. But the announcement surprised even those close to him at the SEC, according to a senior agency official, who declined to be named to speak freely.
One Justice Department official, speaking on the condition of anonymity due to the situation's volatility, told The Post that the change arose because Clayton was preparing to leave the SEC later this year and had also expressed interest in the New York prosecutor job.
Before Trump nominated him to the SEC, Clayton, a longtime partner with the law firm Sullivan & Cromwell, had never held a government position. He has represented some of the biggest names on Wall Street, including Goldman Sachs and Bill Ackman of Pershing Capital.
During more than three years at the SEC, Clayton has said he wanted the agency to focus on protecting retail investors and easing regulations that made it tough for companies to go public. "I think that Jay Clayton has done a good job of running the agency and making the trains run on time," said James Angel, associate professor at Georgetown University's McDonough School of Business who has studied markets and financial exchanges. "Most of what has been done during his chairmanship has been technical stuff that was needed."
But consumer advocates have said some of his policies have weakened the SEC. The commission has made it easier for companies to raise money without traditional oversight and adopted weak protections for consumers working with brokers, they say. Clayton's tenure will be known for "shrinking both the scope and the effectiveness of SEC regulation," said Marcus Stanley, policy director at Americans for Financial Reform, an advocacy group.
The SEC did not returns emails seeking comment about Clayton’s nomination.