Prior to his SEC nomination, Clayton communicated with SEC contractor

[April 04, 2017]  By Sarah N. Lynch

WASHINGTON (Reuters) - Before Wall Street attorney Jay Clayton was nominated to be head of the U.S. Securities and Exchange Commission, he communicated with more than a half dozen of President Donald Trump's transition representatives, including one whose company has a multi-million-dollar contract with the SEC, according to documents seen by Reuters.

Among those whom Clayton was in touch with was Peter Thiel, a Trump donor and Silicon Valley entrepreneur who co-founded Palantir Technologies, which has a contract with the SEC that Clayton may one day have to review, according to written answers from Clayton in response to questions from the Senate Banking Committee's top Democrat, Sherrod Brown.

Clayton's responses followed his confirmation hearing before the committee on March 23.

Clayton wrote that he communicated on a "substantive basis" with current members of the Trump administration and other former transition officials including Thiel.

He did not elaborate about the nature of the communications.

In 2015, Palantir, based in Palo Alto, California, won a more than $43 million contract with the SEC to provide data mining services, according to public records. The contract was for five years, with years two through five being optional, an SEC spokeswoman told Reuters at the time.

If confirmed as SEC chairman, Clayton will have direct authority over contracting matters for the agency.

A spokesman for Clayton declined to comment. Palantir did not respond to requests for comment. A spokeswoman for the White House referred all questions to spokesmen for Clayton.

Clayton also disclosed in his written responses that he communicated with others, including Rebekah Mercer, a Trump donor whose father, Robert Mercer, founded the hedge fund Renaissance Technologies; Genie Energy Ltd President Ira Greenstein; venture capitalist Darren Blanton; Martin Silverstein, a lawyer who is senior counsel with the law firm Greenberg Taurig and who was ambassador to Uruguay for four years under President George W. Bush; Trump's current chief strategist Steve Bannon; and White House Chief of Staff Reince Priebus, the documents show.

Jay Clayton testifies at a Senate Banking, Housing and Urban Affairs Committee hearing on his nomination. REUTERS/Jonathan Ernst

"I believe it is fair to presume that one or more of these individuals may be affiliated with one or more public companies or other companies that are regulated by the SEC," Clayton wrote. He did not address whether any of the individuals may also have a financial stake in SEC contracts.

The disclosure of his communications with Thiel come just one day before the Senate Banking Committee is set to vote on whether to send Clayton's nomination to the full Senate. He is still expected to be approved by the committee and later by the full Senate.

The issue has the potential to stoke deeper concerns among some Democrats on the panel who already have misgivings about possible conflicts of interest.

Senator Catherine Cortez Masto, a Democrat from Nevada, told Reuters in a statement that Clayton should disclose more details about his talks with Thiel.

"We must be sure that no commitments or deals were made between Mr. Thiel and Mr. Clayton, especially pertaining to Thiel’s company’s pending business before the SEC," she said.

At his confirmation hearing last month, Clayton was grilled repeatedly about possible conflicts of interest.

(Reporting by Sarah N. Lynch; Editing by Linda Stern and Leslie Adler)

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