Allen subsequently began working for Republican Senator Jesse Helms, of North Carolina; he was Helms’ campaign spokesman in 1984. From 1985 to 1987, Allen was a staff member of the Senate Foreign Relations Committee.

Allen returned to school in 1987. He graduated from Duke University School of Law with a J.D. in 1990. He also received a Master of Laws Degree from Duke University School of Law.

From 1990 to 1991, Allen was a law clerk for David B. Sentelle, a judge on the U. S. Court of Appeals for the D.C. Circuit, famous for his role in the Whitewater investigation. Allen met and became a protege of Clarence Thomas, who was a judge on that court at the time Allen was clerking there.

In 2001, Allen was appointed as the Deputy Secretary of the U.S. Department of Health and Human Services.

In 2004, Allen was nominated by President George W. Bush to become a federal judge on the Fourth Circuit Court of Appeals. His nomination was opposed by numerous educational, religious, and racial groups, including People for the American Way, the NAACP, and the National Organization for Women ( ). The American Bar Association rated him as partially “not qualified”. His nomination was stalled in the Senate Judiciary Committee and lapsed on December 8, 2005.

Allen was then appointed to the position of Assistant to the President for Domestic Policy in January 2005 where he was responsible for providing advice on all non-economic policy issues including education, health care, labor, housing, veterans, HIV/AIDS, and other domestic issues. While Head of the Domestic Policy Council, Allen jointly oversaw the White House Task Force that coordinated response to Hurricane Katrina along with the Homeland Security Council.

Allen was apprehended by Germantown Target store loss prevention manager Pete Schomburg on January 2, 2006. According to the charging document, Allen “admitted to Agent Schomburg that he was committing fraudulent returns”. He was not formally charged until March after a review of security video and credit card activity showed similar behavior dating back to 2005. Police said he took items from the shelf and then ‘returned them’ for more than $5,000 to his credit card through about 25 similar transactions at other stores. He pleaded guilty to theft in August.

On February 10, 2006, the day following Allen’s resignation, The Washington Times reported that “According to a military source, Allen resigned to protest the White House’s refusal to lean on the Pentagon about the issue [of allowing military chaplains to be more explicit about their faith].” However, Allen denied these reports, stating that he had resigned to spend more time with his family.

President George W. Bush said on March 11, 2006, “If the allegations are true, Claude Allen did not tell my Chief of Staff and legal counsel the truth, and that’s deeply disappointing. If the allegations are true, something went wrong in Claude Allen’s life, and that is really sad. When I heard the story last night I was shocked. And my first reaction was one of disappointment, deep disappointment that—if it’s true—that we were not fully informed. But it was also one—shortly thereafter, I felt really sad for the Allen family.”

On March 11, 2006, Trey Ellis wrote an opinion on The Huffington Post called “When Black Republicans Go Bad”. The piece suggested that Allen, along with other prominent black Republicans, “stake out ultra-right-wing positions to prove their bona fides to their white superiors.”

Allen has a twin brother named Floyd, who played football and was inducted into the Sanderson Athletic Hall of Fame in 2011. In 1982, Allen graduated from the University of North Carolina at Chapel Hill with a B.A..

In September 2011, the D.C. Court of Appeals suspended his license to practice law in D.C. for one year, after his license to practice law was suspended for 30 days in Virginia and Pennsylvania. The opinion gave much discussion as to whether the act was one of moral turpitude, concluding that it was not.

His son Claude Allen III pleaded guilty to murder on September 3, 2014 but was declared not legally responsible and was committed to a psychiatric institution.