He knew he would never have another chance. He defiantly told Jason that everyone knows he is the killer now. Jason can kill him, but he can't kill the truth. So Jason killed Clarence. John apologizes to Clarence, saying he got there as quickly as possible.
Clarence asks to be let go.
John asks if there is anything he can do for Clarence. He says he doesn't have anyone to send a message to. They agree that this is when things are going to go bad. John asks Lionel to let Clarence go. He bids Clarence goodbye and assures him that for that moment he was a hero.