Basil Karlo murdered two innocent people to use Mrs. Griswald's- an innocent civillian's- body to access a vault at Gotham Bank & Trust. Karlo became Clayface when he stole blood extracts from Preston Payne the third Clayface who could melt flesh with a touch and Sondra Fuller,the fourth Clayface who could shapeshift and repilicate abilities. He duplicated the likeliness of a man, Mr. Griswald as to get to the Gotham bank. Once there, he morphed into Mrs. Griswald to get to the vault but was infiltrated by Batgirl, they fought and Steph succeeded until Clayface morphs into an identical version of Batgirl. Nick Gage shows up and must decide which to shoot. He chooses correctly after the real Batgirl's clever prompt ("Shoot me...I'll bleed."), disarming Clayface.
Both Batgirl and Gage are unsure of what to do next (“I’m all out. What do ya got?” “A utility belt full of crap and a positive outlook?”) until Proxy suggests to ‘use your surroundings,’ Steph sees the rushing water falling on Clayface from the fire sprinklers and uses one of her freezing Batarangs to demobilize him for good.
Later, Gage tells Steph what Clayface’s motives were. Before he was Clayface, Basil Karlo had a photograph of his late wife in Mrs. Griswald’s safe deposit box, and he needed her clearance to get in and see his wife again, one last time. All of this happened in Batgirl #13