Complete 2012 forensic audit documents - Kansas Bioscience ...

KBA’s Response:
KBA’s September 2008 Letter of Support to KSU was non-binding, and the potential investment
in the IGERT program had not been reviewed or approved by the Investment Committee or the
Board of Directors. Since 2010, KBA has amended the process of considering and providing
Letters of Support. The current practice is to provide binding Letters of Support only with the
approval of the Board. KBA also continues to provide non-binding Letters of Support for
projects and proposals it believes will benefit the state of Kansas and its citizens, with the nonbinding
nature of such letters clearly stated.
KBA Culture under Tom Thornton’s Leadership
Mr. Thornton was described by many individuals interviewed by BKD as obviously intelligent, a
strategic thinker and a gifted speaker. However, just as often comments were made regarding his
arrogance and the self-aggrandizing manner in which he took credit for the work of others.
Furthermore, his behavior was often described as erratic by some who sought funding from KBA
and some who worked for KBA.
Many individuals interviewed by BKD commented that they would talk with Mr. Thornton
regarding a funding opportunity and he would make statements or promises indicating that some
specific action would be taken by KBA. He would then “go dark” and would not communicate
with them or follow-up on the promised actions. When they would next speak with Thornton
about the issue, he would act as if the previous conversations never took place or as if he had no
recollection of them. This created confusion and distrust among some of the entities attempting
to work with KBA.
Furthermore, Mr. Thornton’s management style and work practices reportedly created a difficult
work environment for some KBA staff members. Both Thornton’s former and current Executive
Assistants commented that at times Thornton would be “missing in action.” They would not be
able to reach him on his cell phone and would have no idea where he was. They also both
commented that at times he would be evasive about his whereabouts, indicating that he was at
one location when his calendar or other information would indicate he was somewhere else.
They described him as “secretive.” These observations were shared by other current and former
KBA employees as well.
Mr. Thornton was described by some KBA staff members as intimidating. BKD was told of
several instances in which some KBA staff members were uncomfortable with Thornton’s
actions, but none were comfortable speaking with Thornton about them or with reporting any of
the actions to KBA’s BOD for fear of retaliation by Thornton. Specific allegations recounted
include a mischaracterization of expenses discussed later in this report; alleged favoritism shown
by Thornton and Jan Katterhenry, former CFO/COO, to Thornton’s then girlfriend, now wife,
Lindsay Holwick Thornton; and alleged instances of intimate encounters between Thornton and
Lindsay Holwick Thornton in Thornton’s office. These issues, whether real or perceived, had a
significant impact on the morale of some KBA employees.
BKD notes that not all KBA employees shared these observations and perceptions. KBA staff
members involved directly in dealing with the investment side of KBA’s business were generally
laudatory of Mr. Thornton’s tenure with KBA and none shared with BKD a belief that
inappropriate activities had taken place in KBA’s offices. These staff members consistently
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