Be A Clown - S1-E11
Character mistake: The magician's name on the poster is "Proscuitto", which is a wrong spelling for Prosciutto (ham). The misspelling is inconsistent throughout the episode; it is wrong the first time Joker shows the poster, then it's fixed at the fun fair and on tv. The font used is also different.
Answer: Because he stole a chemical from his lab.
But Batman knew that with it, Clayface could permanently retain his shape and Clayface desperately wanted to be Matt Hagen again. In a sense, Batman stopped Clayface from becoming human.