By Bill Flook
House Democrats on June 25, 2020, launched a barrage of questions at SEC Chairman Jay Clayton over the Donald Trump administration’s plan to nominate him as U.S. Attorney for the Southern District of New York, replacing the ousted Geoffrey Berman.
Clayton, during testimony before a House Financial Services subcommittee, largely refused to offer details on his specific plans but said he is “fully committed to and focused on my role at the SEC.”
“I recognize that the nomination process is multi-faceted and uncertain,” Clayton said during opening remarks. “It is clear the process does not require my current attention.”
The SEC chief’s efforts to head off further questioning over his potential appointment did not pan out as Financial Services Committee Democrats repeatedly sought to pin him down for answers on the job change and the potential conflicts it creates.
Financial Services Committee Chair Maxine Waters, a California Democrat, had a particularly testy exchange with Clayton. Waters, who has been largely critical of Clayton’s push to deregulate capital markets during his tenure as SEC chairman, asked him whether he plans to continue serving as chair of the market regulator prior to Senate confirmation.
“So you will continue to serve as chair of the SEC while you await the confirmation? You will not step down? You will not step aside? They will not have someone to take your place in any shape, form, or fashion that you know about?”
Clayton said the hearing was “not the time to decide about the nomination.”
“I’m here as the chairman of the SEC,” Clayton said. “As I look at it, there’s no need for me to pay any attention to the nomination at this time. I am fully committed to being the chairman of the SEC.”
Other Democrats pressed Clayton on when he began discussing the job with the White House and with whom specifically in the Trump administration he discussed the move to U.S. Attorney. Clayton said President Trump and Attorney General William Barr were made aware “that this was something that I wanted to do” last weekend.
Trump’s plan to nominate Clayton to replace the fired Berman, who had pursued investigations into several of the president’s associates, has placed Clayton in an unfamiliar and unwelcome public spotlight. At several times during the hearing he appeared uncomfortable, and occasionally irritated, with the aggressiveness of Democrats’ questioning.
Since the White House announcement late on June 19, Democratic lawmakers have urged Clayton to withdraw his name from consideration as U.S. Attorney for one of the most important and influential districts in the country.
Sen. Sherrod Brown of Ohio, in a June 20 letter to Clayton, said Berman’s ouster and Clayton’s nomination “appear to be an effort to impede purportedly significant ongoing investigations into allies of the Trump Administration.”
Brown is the ranking Democrat on the Senate Banking Committee.
“Under these circumstances, you should withdraw from consideration for this post to avoid further entanglement in Attorney General Barr’s flagrant effort to interfere with the work of the dedicated prosecutors and public servants in the office of the U.S. Attorney for the Southern District of New York,” Brown wrote. “Your involvement in another attempt by this Administration to obstruct justice will undermine the Securities and Exchange Commission and your position as Chair.”
This article originally appeared in the June 26, 2020 edition of Accounting & Compliance Alert, available on Checkpoint.
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