A former Kansas Department of Commerce official suspected of embezzling public funds handled money for a community foundation that received a $425,000 grant while he oversaw the same grant at the state agency that awarded it, an apparent conflict of interest now coming under scrutiny. Two top Commerce officials — Lt. Gov. David Toland, who leads the agency, and Robert North, the agency’s general counsel — signed off on the grant amid warning signs that the official was working on both sides of the grant.
The former official, Jonathan L. Clayton, died in August in a single-vehicle crash as he faced mounting suspicion of wrongdoing and as a past felony conviction in Pennsylvania became more widely known in Kansas. Until October 2023, Clayton had been the director of economic recovery at Commerce, where he oversaw more than $100 million in programs funded by federal pandemic dollars. The agency didn’t conduct a criminal background check before hiring him. Clayton’s death has attracted significant attention, coming after he went missing on Aug. 3 and before an apparently posthumous email from him made allegations of misconduct involving Commerce, which the agency denies. The Kansas Bureau of Investigation in late August said it had found no evidence of foul play, but the investigation was continuing. In April 2022, Commerce approved a Building a Stronger Economy, or BASE, grant of $425,398 for the Mullinville Community Foundation. The group focused on improvements in Mullinville, a town of roughly 200 in western Kansas where Clayton grew up. The grant agreement listed Clayton as the official point of contact at Commerce. The document directed the foundation to send all notices, requests, reports and other communications to him.
But Clayton, 42, was also on the Mullinville Community Foundation board of directors at the time, serving as secretary-treasurer. The position gave him entrée into the group’s finances, access he is now suspected of abusing, while the state official tasked with keeping an eye on the grant was him. At least some portion of those funds are missing. “It was just all in Jonathan’s hands,” Rob Roberts, a foundation board member, said in an interview. “And he said he was getting this money, and we got this money, and I had no dealings with the money or anything like that.”