Behind the appointment of Jay Clayton, Trump’s bid to control a prestigious New York court

First, who is Jay Clayton?

Jay Clayton is an attorney specialising in mergers and acquisitions transactions and capital offerings. The 58-year-old grew up in Pennsylvania, has degrees in engineering and law from the University of Pennsylvania, and a Master’s in Economics from King’s College, London. Currently, he is the Senior Policy Advisor at the legal firm Sullivan & Cromwell, and serves as the independent chair of Apollo Global Management’s board of directors. 

He has a long association with Sullivan & Cromwell – from an associate level in 1992 to becoming a partner in 2001. He has worked extensively with the firm before. During the 2008 financial crisis, he oversaw the sale of business assets of the doomed investment banking firm Bear Stearns to JPMorgan Chase in 2007, Barclay’s in acquiring Lehman Brothers assets following the latter’s bankruptcy, and Goldman Sachs in settling a $5 billion investment by Warren Buffett’s Berkshire Hathway. 

According to a Reuters report, Clayton’s name was recommended in 2016 for the post of SEC Chair by the firm’s then-senior Chairman Joseph Shenker to Trump’s son-in-law, Jared Kushner. The firm had a prior relationship with Kushner, having long represented his family business. 

His tenure was noted for being amenable to retail investors. The SEC reportedly gained $14 billion – including $4.68 billion in FY2020 alone – through fines and agreements with violators of regulations. The agency worked on streamlining rules, and butted heads with cryptocurrency leaders, as well as Elon Musk. While this period was free of interference by Trump, the SEC is considered a lower priority for the President than the Justice Department. The Reuters report described Clayton as a “consensus builder”, and someone who would not necessarily cave to Trump’s demands outright.

During his tenure, Clayton had notably introduced Diversity, Equity and Inclusion (DEI) initiatives, a policy that Trump 2.0 is vehemently opposed to. 

Clayton is golfing buddies with the President, and according to a Bloomberg report, made his intent to seek the top job at SDNY known on a golfing trip with him back in 2020. 

What powers does the US Attorney hold?

The US Attorney is the chief prosecutor for the US in criminal law cases and represents the nation in civil law cases in the district they serve. They preside over the Office of the US Attorney for the district, and are charged with ensuring the execution of federal laws. The President appoints a US Attorney to each of the 94 federal districts, with one US Attorney serving the districts of Guam and the Mariana Islands.

As the chief federal law enforcement officer of their district, the US Attorney can request the concerned federal investigative agency to investigate suspected violations of federal law. In some cases, the US Attorney can enlist a team of agents across agencies with investigative jurisdiction into the suspected violations. They can issue subpoenas, file criminal charges, enter into plea bargains, and on occasion, grant immunity to criminals who cooperate with the federal investigation.

Among these, the office of the US Attorney for the SDNY is highly regarded among the nation’s federal prosecutor offices. 

And why does Trump want control of SDNY?

The SDNY holds a special place among the country’s 94 judicial districts. Given that Wall Street is located in the area, the court hears cases concerning the country’s, and perhaps some of the world’s most powerful financial institutions. It has been dubbed the ‘Sovereign District’ because of its extensive mandate when it comes to prosecuting such cases, the autonomy it enjoys and its willingness to collaborate with other districts on important cases.

Clayton’s appointment, if confirmed by the Senate, will be significant. The President has run afoul of the court in the past, most notably through the criminal conviction in the hush money case last May. You can read about the case here. (Interestingly, in January, Trump hired Sullivan & Cromwell to appeal his criminal conviction.)

For Trump, wresting control of the court through Clayton would serve his larger mission of seeking retribution against people he has deemed adversaries in court. The President has long accused the court of biased treatment against him, calling for investigations against Letitia James, the New York attorney general who brought the hush money case against him, and Alvin Bragg, the District Attorney who prosecuted him. Clayton’s nomination, announced in November, was the only US Attorney job to be announced with senior positions in the capital.

Even before Clayton steps into office, efforts by the Trump administration to gain greater control of the court are already underway. Last month, the DoJ ordered Danielle Sassoon, the interim US Attorney for SDNY to dismiss a corruption case against New York Mayor Eric Adams. Sassoon resigned from the post, accusing the department of tacitly working with the mayor to enforce Trump’s immigration policies. 

The Bloomberg report cited unnamed sources who said that Clayton intends to stay the course in his new role, achieving a middle ground between meeting Trump’s policies and retaining the autonomy of the office. According to the report, while his upcoming tenure could be expected to litigate against white-collar crime, it would lack the fervour of the President Joe Biden era, and would largely focus on non-American companies. However, the report also said that the court could now be anticipated to focus on “anti-semitic hate crimes”, human trafficking and college protests, possibly enforcing the new administration’s immigration policy.