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Mediation underway in probe of misconduct charges against well known Portland businessman

More than a year after the state first accused prominent Portland businessman Roy Jay of financial improprieties with the nonprofits he headed, the case may finally be nearing resolution.

The two sides have entered into mediation to try to settle out of court, according to a legal filing by the Oregon Department of Justice. Mediation is a closed-door process that both sides agree not to speak about publicly.

In the past, Jay has repeatedly denied wrongdoing, and through a spokesman has suggested the Justice Department is misinterpreting financial records of the nonprofits.

In January 2016, state Justice Department lawyers first disclosed details of the probe into Jay, citing transfers of funds for what appeared to be items for personal benefit, including condos, travel, vehicles and fine clothes. The money came from the the well-known Project Clean Slate program, the African American Chamber of Commerce of Oregon and the Independent Development Enterprise Alliance, according to the state.

In October, the state put a dollar figure on the allegedly misspent funds: $1.4 million. The state cited the figure in a Clackamas County probate case to settle the estate of Jay's late partner, Juanita Head Walton. Walton died in April after battling cancer. The state's filing put a claim on her estate while accusing her and Jay of "misconduct" and "unjust enrichment" using the nonprofits.

If the talks do not lead to a figure the state is comfortable with, the Justice Department can file a separate lawsuit against Jay, according to the filing.

The state's case has come as a shock to supporters of Jay, who's long been known for his charisma, political connections and civic activities. The Clean Slate program has been hailed for helping to give ex-felons assistance in expunging records, getting jobs and reintegrating after their release. Over the years, some had speculated he'd run for Portland mayor. Last fall an ad ran in the Portland Observer newspaper with a photo of Jay, saying "Thank you Roy Jay for everything you have done for our community."

In December, Jay announced that he was moving to New York City but would maintain a residence in Portland. His spokesman indicated that while Jay is retiring, he may continue to pursue business ventures, saying "Jay is being courted by East Coast concerns on a variety of private sector projects involving barter, hospitality and lodging."

His announcement made on Facebook drew dozens of comments applauding him, including from prominent Oregonians such as former City Commissioner Steve Novick and former Gov. John Kitzhaber, with the latter citing Jay's "amazing legacy of community service."

"Thanks John," Jay replied, then dropped a zinger suggesting he could have joined the new administration. "Was contacted by the Trump team but turned them down and never had nothing more than an initial conversation with some head hunter. Was not interested."

For reasons that are unclear, the exchange has since disappeared from Jay's Facebook page.

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