March

9, 2017



The Honorable Michael Crapo, Chairman
The Honorable Sherrod Brown, Ranking Member
Committee on Banking, Housing, and Urban Affairs
United States Senate
534 Dirksen Senate Office Building
Washington, D.C. 20510

RE: Compelling Trump SEC Nominee Jay Clayton to Reveal Clients


Dear Chairman Crapo and Ranking Member Brown,

Before the March 23 confirmation hearing of Jay Clayton, President Trumps
nominee to lead the U.S. Securities and Exchange Commission (SEC), the Committee on
Banking, Housing, and Urban Affairs must demand he release a comprehensive list of all
current and former clients, both domestic and international. The American people must be
made fully aware of any potential conflicts of interest that may arise if he is confirmed, and
the extent to which he will be forced to recuse himself from the important work of the SEC.

If confirmed, Mr. Clayton--a partner at Sullivan & Cromwell LLP--will be required to
recuse himself for one year from voting on any particular matter if a firm or individual is
being represented by his law firm, and for a year from working on matters that involve
clients he represented in the past year. He also will be recused indefinitely if a deal he
previously worked on comes up during SEC litigation.1 Based on an analysis of recent
and selected Sullivan & Cromwell clients, it is estimated that Mr. Clayton will need to
recuse himself from cases involving upwards of one-third of the institutions on the
Financial Stability Boards list of global systematically important banks.2 But, that
number could be much larger as there is no way of determining the identities of all of Mr.
Claytons clients and the scope of his representation of those clients, without full disclosure
by him.

What we know thus far about the scope of his representation of past clients should
already concern the members of your Committee. In addition to being involved in
controversial deals that wiped out shareholder wealth, and others that set off global
market turmoil that roiled the financial world during the 2008 financial crisis, Mr. Clayton
has advocated for less zealous enforcement of the Foreign Corrupt Practices Act (FCPA),
which prohibits the payment of bribes to foreign officials to assist in obtaining or retaining

1220 L Street NW, Suite 100/364 Washington, D.C. 20005-4018

(855) ALD-PRGS toll-free (202) 205-5767 fax alliedprogress.org
business.3 He even oversaw a report that attacked the Obama administration for enforcing
the law, claiming its application was causing lasting harm to the competitiveness of U.S.
regulated companies.4 To hear him tell it, American businesses just cannot compete if
they are not bribing foreign governments. It is difficult to see how he could possibly be
trusted to enforce these and other important laws if he considers them mere obstacles
around which businesses must navigate.

Equally concerning, Mr. Clayton represents an extension of the Trump
administrations troubling pattern of nominating individuals with Russian ties. His law
firm, Sullivan & Cromwell, has advised numerous entities including a company doing
business with a Russian oligarch considered to be the nations wealthiest man, and the
Russian government, on financial and oil and gas projects in the former Soviet Republic.5 It
also represented Deutsche Bank on a consent order related to the banks role in a $10
billion Russian money laundering scheme.6 If that scandal-plagued financial institution
sounds familiar, it should: The Trump Organization has enormous debt "with Deutsche
Bank, which loaned it more than $364 million in recent years and more than $3 billion
since the 1990s.7

To fully ascertain the extent of Mr. Claytons potential conflicts of interest, the
Committee on Banking, Housing, and Urban Affairs must require him to make public a
complete list of all current and former clients, both domestic and international. He also
should clearly identify which clients he represented and which he did not. Only then should
the Committee continue with his scheduled confirmation hearing.

The SECs vitally important charge of protecting hard-working Americans and their
investments, retirement and otherwise, from exploitation by Wall Street is sacrosanct, and
should not be threatened by an individual who is incapable of performing the basic duties
of the job because he has too many conflicts of interest to do so.

Sincerely,




Karl Frisch
Executive Director
Allied Progress


cc: The Honorable Bob Corker, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Catherine Cortez Masto, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Tom Cotton, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Joe Donnelly, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Heidi Heitkamp, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Dean Heller, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable John Kennedy, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Robert Menendez, Member, Committee on Banking, Housing, and Urban Affairs

 The Honorable David Perdue, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Jack Reed, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Mike Rounds, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Ben Sasse, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Brian Schatz, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Tim Scott, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Richard C. Shelby, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Jon Tester, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Thom Tillis, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Patrick J. Toomey, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Chris Van Hollen, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Mark R. Warner, Member, Committee on Banking, Housing, and Urban Affairs
The Honorable Elizabeth Warren, Member, Committee on Banking, Housing, and Urban Affairs



























NOTES

1 Sarah N. Lynch, Trump's SEC Pick Clayton Points to Capital Formation, Not Enforcement, Reuters, January

5, 2017.
2 Sullivan & Cromwell LLP Website, "Selected Representations," Accessed March 4, 2017.
3 Michael J. de la Merced, Lehman to Pay Barclays $1.3 Billion to Settle Suit, New York Times, June 5, 2015;

Lynch, Trump's SEC Pick; and SEC Spotlight: Foreign Corrupt Practices Act, U.S. Securities and Exchange
Commission website, accessed March 4, 2017.
4 Dave Michaels & Liz Hoffman, SEC Pick Clayton Is a 180 From Chairman Mary Jo White, Wall Street Journal,

January 4, 2017.
5 Experience in the Oil and Gas Industry, Sullivan & Cromwell LLP, 2014, accessed March 4, 2017.
6 Jethro Mullen, Deutsche Bank Fined for $10 Billion Russian Money-Laundering Scheme, CNN Money,

January 31, 2017; and Elliot Glover, " White & Case and Sullivan & Cromwell Advise Deutsche Bank over
Money Laundering Claims," Student Lawyer, February 10, 2017.
7 Kevin G. Hall, Exclusive: Trump Commerce Pick Wilbur Ross Faces New Russia Questions, McClatchy,

February 16, 2017; and Luke Harding, Revealed: The $2bn Offshore Trail That Leads to Vladimir Putin,
Guardian, April 3, 2016.