By PHYLLIS ZORN

Staff writer

Peabody’s interim city clerk, who disappeared Aug. 3 and has not been found, left suspicion of wrongdoing in his wake.

Jonathan Clayton disappeared soon after the Department of Commerce, where he formerly worked, began examining COVID-19 grants given to organizations in Mullinville and Peabody with which Clayton was affiliated.

Mullinville Community Foundation received $425,398 on July 15, 2022, to repair storm damage to recreation equipment.

Peabody Main Street Association received the first half of a $1.5 million grant April 25, 2023, to restore historic downtown businesses.

Clayton has three financial felony convictions in Pennsylvania and still owes $195,712.50 in restitution there

Commerce spokesman Pat Lowry said the department was unaware of Clayton’s record when he was hired Feb. 23, 2020.

Court records show that Clayton, husband of Peabody council member Christopher King, pleaded guilty Dec. 13, 2016, in Philadelphia County, Pennsylvania, to forgery, theft, and conspiracy to commit theft.

He was sentenced March 13, 2018, to five years’ probation and placed under house arrest, permitted to go to work and religious services and to perform community service work.

He was ordered to pay $210,000 restitution at a rate of $600 a month. Since then, court records indicate, he has made 48 payments ranging from $5 to $1,000, the most recent monthly payment being made Dec. 17.

After his convictions in Pennsylvania, Clayton and King moved to Clayton’s hometown of Mullinville, then to Peabody.

During this time, Clayton worked for Commerce.

After he left that job in November, Clayton was Peabody’s animal control and health and safety officer until June 3, when council members fired city clerk Jylle Wilson and appointed him interim city clerk.

His disappearance

Clayton disappeared the same weekend as a state lawyer demanded almost immediate return of $740,000 from Main Street for a grant that Clayton had helped obtain.

Before the demand became known publicly, city officials repeatedly suggested there had been no financial wrongdoing.

Last week, Mayor Catherine Weems responded to a question from the Marion County Record by saying: “Citizens need to be reassured and confident that our city funds have not been compromised. All appears to be in order here.”

Asked Aug. 12 whether anything was amiss at grant recipient Peabody Main Street, a private group operating out of city hall, Police Chief Philip Crom said he was unaware of any problems with that group and reiterated that no city money had been reported as missing.

Peabody Main Street, for its part, sent an email to its members Aug. 12 saying only that a second installment of a $1.5 million grant might not be made because necessary paperwork had not been submitted by Clayton.

A Department of Commerce letter dated Aug. 5 indicates otherwise. The letter states that the state wants the first part of that grant back, has questioned Clayton’s stewardship of it, and set a deadline of today for reimbursement to be received.

The deadline later was extended to Sept. 4.

Commerce’s letter, addressed to Peabody Main Street at city hall, stated that Commerce notified the group July 25 that it had terminated the grant for failure to provide required financial and project reports.

Clayton was responsible for making those reports.

“Despite assurances from your organization that it would immediately remedy its noncompliance, Peabody has yet to provide substantial documentation,” the letter states.

The letter states that if repayment is not received, the letter stated, “Commerce will pursue any and all legal alternatives to collect outstanding amounts due and associated costs, including payment for legal fees and expenses.”

Main Street’s response

Reached Aug. 14, Peabody Main Street board member Morgan Marler admitted the association knew about the grant termination and should have been more forthcoming about it in its email.

She said Main Street regretted not telling people that the grant program, and thus the community, was at risk.

The email was written before board members knew the full scope of the problem, Marler said, and someone else on the board was tasked with sending it out. It was intended to reassure grant recipients that everything possible was being done to salvage the grant.

“Then we got the termination letter from the state,” she said.

She said she was sure that Commerce learning about Clayton’s felony record factored into the decision to terminate the grant.

“We’re a private organization and we are trying to rectify the situation,” Marler said. “We’re doing everything we can.”

When state troopers investigating Clayton’s disappearance called her, she told them what she could, she said.

“I was very happy to see somebody was here investigating and moving forward trying to figure out the facts,” she said.

Main Street board members are working to gather information Commerce wanted, she said.

“We are not aware of any misappropriation of funds in our grant,” she said.

Clayton merely organized files and managed paperwork for the grant, Marler said, but Commerce wants proof that he did nothing more.

“We’ve gotten confirmation in writing from the bank that we did provide to the Department of Commerce,” she said. “Everybody is trying to do due diligence.”

Marler said the situation was emotionally hard on everyone involved. Everyone has been working hard to save the downtown project.

Marler thinks the same thing could happen to any small town without a capacity to hire a grant administrator.

“We were blindsided by it,” she said. “You trust the people that you’re working with, like Jonathan Clayton, who had worked for the Department of Commerce. We would have never guessed we would be in this position.”

Lack of transparency wasn’t purposeful, she said.

“For our organization, we are going to our jobs and plugging away to try and salvage our community and the grant,” she said. “We regret doing that. I’m sure that the next time we face this, we’ll jump right out and make some press statements.

“I admit we made mistakes about not notifying our recipients earlier. None of us have ever been through something like that before. We’re doing the best we can do to move our community forward.”

Attempts were made to contact Weems and Crom, but calls were not returned.

Commence comments

The Commerce Department sent Main Street the first half of its grant money June 15, 2023.

Lowry said termination of the grant was related to alleged misconduct by Clayton after he left the department.

“The Kansas Department of Commerce has been made aware of allegations of misconduct against a former employee in connection to activity that occurred after they left state employment,” Lowry said. “We are reviewing the matter to determine what, if any, impact the alleged activity may have to the agency or community partners. We are also assisting state and federal law enforcement, as appropriate.”

In its email last week, Peabody Main Street stated that property owners had used grant money to make various improvements.

“Property owners,” the email states, “received new roofs, updated electrical work, foundation repair, repair and stabilization of limestone load-bearing walls, doors replaced, HVAC systems upgraded or installed for the first time, installation of an oil burner heating system, asbestos removal, and property purchase.”

It is unclear how money already spent could be recovered. Nor is it clear what deficiencies in financial reporting are involved.

Clayton’s rise to clerk

City council members promoted Clayton to interim city clerk June 3 after firing Jylle Wilson. His term recently was extended after a woman hired to fill the vacancy changed her mind about taking the job.

Peabody city council members conducted a special closed-door council meeting Aug. 9. Afterward, Mayor Catherine Weems told an out-of-county reporter that the city had been aware of Clayton’s criminal background and had taken steps to ensure he had no access to city money.

However, the agenda packet for the meeting indicates otherwise. Included in it was an invoice from St. Luke Hospital paid with a city credit card bearing Clayton’s name.

Separate investigation

Clayton faces a separate investigation in Kiowa County, where he and King lived before moving to Peabody in 2023 and opening a store, CK Vintage, in a building listed on appraisal records as being owned by Peabody Main Street.

Kiowa County Sheriff Kendal Lothman told the Record his department was looking into an undisclosed matter not related to Clayton’s disappearance.

“We’re working on an investigation,” Lothman said. “I can’t tell you more because it’s just an investigation.”

At the time the couple moved to Peabody, Clayton was working for Commerce. He transferred from a Dodge City office to Topeka and planned to commute after moving.

Clayton was hired Commerce as an economic development representative and later promoted to a director.

Not a typical case

From the start, law enforcement officials did not treat Clayton’s disappearance as a typical missing person case even as Peabody officials gave no indication it was anything other than that.

Although his description was placed on a Kansas Bureau of Investigation website for missing persons and a missing persons report was filed, no description of his clothing or other items typically included in such notices was provided to KBI.

Bizarre email received

The façade that Clayton was missing, and that dogs and airplanes might be brought in to search for him was punctured Aug. 7, four days after he went missing, when an email purporting to be from him was sent to townsfolk.

It stated that if he disappeared or died, the Kansas Department of Commerce and its director, Lieutenant Governor David Toland, were among people who should “be looked at.”

The email, later claimed to have been sent automatically if Clayton failed to register his presence, said his disappearance was related to his role in a “scheme” by Lieutenant Governor David Toland to steer pandemic aid toward organizations selected by Toland.

In both Mullinville and Peabody, Clayton also operated a business called Clutch Professionals, which according to its website offered “customized, unique strategies” for community economic development.

Before termination of the Peabody grant was publicly revealed, Crom told the Record that the case was being investigated by a new unit of the Kansas Highway Patrol, Troop O, which works to “gather evidence surrounding complex criminal cases in preparation for prosecution.”

City computers used by Clayton will be forensically examined by KHP, Crom said. KHP also has reviewed video from roadside cameras that read license tags but has found no sign of Clayton.

A spokesman for Troop O acknowledged the investigation but provided no details.

Lowry did not mention Troop O but said Commerce was working with Kansas Bureau of Investigation, Federal Bureau of Investigation, and the Office of Inspector General.