By Dean Seal

Law360 (June 25, 2020, 4:11 PM EDT) -- The head of the SEC revealed to Congress on Thursday that he told the president he was interested in taking Manhattan U.S. Attorney Geoffrey Berman's job roughly a week before U.S. Attorney General William Barr abruptly announced Berman's departure.

U.S. Securities and Exchange Commission Chairman Jay Clayton refused to divulge much else about his role in the shocking ouster of the Southern District of New York's head prosecutor last weekend — despite several probing questions by House Democrats — when he spoke before a subcommittee of the House Financial Services Committee.

The hearing, purposed with discussing the SEC's approach to capital markets and emergency lending in the wake of COVID-19, frequently swung back to inquiries about Berman's alleged firing by President Donald Trump, Clayton's lack of prosecutorial experience and his ability to remain independent as a public servant, given the now-politicized nature of the role for which he's been nominated.

Clayton sidestepped most questions seemingly tacked to the scandal that first hit headlines on June 19, but softened during questioning from Rep. Carolyn Maloney, D-N.Y.

"I'm here as chairman of the SEC to discuss the work of the SEC. What I can say is … that I want — I need to go back to New York," Clayton told Maloney. "We're both from New York."

Before he could go further, Maloney pressed Clayton for a timeline of his discussions with the Trump administration about taking over Berman's position, leading the SEC chair to reveal that his interest was expressed to the president and attorney general the weekend prior to the bizarre standoff within the U.S. Department of Justice that ended with Berman leaving his post.

"The first time it was raised was the weekend of the 12th," Clayton later clarified in response to a question from Rep. Madeleine Dean, D-Pa., "And I'm going to leave it at that."

When Dean asked Clayton to again clarify who had first broached the topic, the SEC head responded, "by me."

"Let me be clear on this issue — this was entirely my idea," Clayton said. "This is something I'd been thinking about for several months as a possible continuation of public service."

Clayton, who was a partner at Sullivan & Cromwell LLP in New York before Trump nominated him in 2017 to lead the securities regulator, had maintained a relatively uncontroversial tenure at the SEC prior to last weekend's shake-up at the U.S. attorney's office in Manhattan.

The theatrical sequence of events surrounding Clayton's nomination began late on June 19 when Barr announced that Berman was stepping down from the SDNY to make way for Clayton's nomination, with New Jersey federal prosecutor Craig Carpenito set to step into the role temporarily while the nomination process played out.

A defiant Berman promptly responded that he would not resign until the U.S. Senate confirmed his replacement, which led Barr on Saturday to announce that Trump had fired Berman. Trump quickly disavowed any involvement, however, saying it was all up to Barr and that he was "not involved."

Berman relented later Saturday, citing Barr's about-face on who would serve as acting U.S. attorney, with Carpenito dropped in favor of top Berman lieutenant Audrey Strauss.

The move sent shockwaves through the legal community and beyond, as some suggested Berman was booted in an attempt to stave off his office's ongoing investigations tied to the Trump White House. That appeared to be a glaring concern for House Democrats, who used Thursday's hearing as an opportunity to grill Clayton on the circumstances of his unusual nomination.

"[Barr's] actions appear to be a continuation of President Trump's efforts to squash any attempts to hold him and his enablers accountable," House Financial Services Committee Chairwoman Maxine Waters, D-Calif., said during questioning. "As you know, the Southern District of New York has been instrumental in conducting independent investigations into President Trump's associates and The Trump Organization, and is currently investigating Deutsche Bank, an institution with long — and substantial — financial ties to President Trump."

With that preface, Waters asked Clayton if he would continue serving as chairman of the SEC while the confirmation process plays out, citing her concerns that Trump or Barr "may try to interfere" with Clayton's ability to remain independent.

"I don't think that matter requires my attention at this time and I expect to continue to devote my full attention to the commission," Clayton said.

Waters then asked Clayton if he would commit to recusing himself from matters before the SEC that "directly or indirectly involve President Trump, creating the appearance that your actions serve as a special favor to President Trump, in order to obtain a position that President Trump and Attorney General Barr have highly politicized?"

Clayton responded that he would continue to "pursue all matters with independence" — an answer that Waters said she considered a "yes."

The line of questioning from other Democrats was similar, with several praising Clayton for his stewardship of the SEC and reputation as an apolitical leader, but calling attention to his complete lack of criminal prosecutorial experience and the fraught circumstances of the situation he now finds himself in.

Clayton repeatedly attempted to steer questioning back to the SEC's role in tackling the coronavirus pandemic and insisted that his nomination was not a topic of discussion appropriate for the hearing. When asked if he'd commit to recusing himself from the SDNY's investigations involving Trump and his associates, Clayton demurred.

"That position and that process is something that is separate and doesn't need my attention," Clayton told the subcommittee. "What I will commit to do, and what I commit to do in my current job, is to approach the job with independence and to follow all ethical rules."

Clayton's nomination faces substantial pushback from both sides of the political aisle. As tensions were building on the Saturday that Berman was ousted, Senate Judiciary Committee Chairman Lindsey Graham, R-S.C., said he would require the traditional "blue slip" approval of New York's senators — Democrats Chuck Schumer and Kirsten Gillibrand — before proceeding with the nomination.

Both senators have called on Clayton to withdraw his name from consideration, suggesting that his confirmation is becoming an exceedingly tall task.

--Additional reporting by Al Barbarino and Stewart Bishop. Editing by Orlando Lorenzo.

Update: This article has been updated with more information from the hearing.

For a reprint of this article, please contact reprints@law360.com.