Oregon Secretary of State Shemia Fagan on May 1 released details about the compensation she received and was promised for a consulting contract she took with a troubled cannabis company.
Under the contract, Fagan was paid $10,000 a month to help an affiliate of pot chain La Mota expand into other states.
That compensation was far more than the $77,000 annual salary, or about $6,420 per month, she receives as the Secretary of State.
Still, Fagan described her time spent moonlighting as “minimal.”
Fagan was further promised a $30,000 bonus for each license she helped the chain’s owners, Rosa Cazares and Aaron Mitchell, obtain in states outside of Oregon and New Mexico, according to a statement released by her office on Monday.
Mitchell has also donated $45,000 to Fagan’s political action committee.
Apology for a Scandal
A Democrat who ran on a platform of rebuilding trust in government, Fagan has been under fire since news broke on April 27 that she had been moonlighting as a cannabis industry consultant while her office was conducting an audit that proved favorable to that industry.
The results of the audit essentially call to loosen regulation of the cannabis industry and encourage the state to provide financial assistance to help it grow.
But the state was apparently already going easy on La Mota, which was expanding despite owing millions in federal income and state cannabis taxes and facing numerous lawsuits and workplace complaints.
Fagan apologized in a written statement on Monday morning, explaining that she had terminated the lucrative contract.
“I owe the people of Oregon an apology,” Fagan said in the emailed statement. “I exercised poor judgment by contracting with a company that is owned by my significant political donors and is regulated by an agency that was under audit by my Audits Division. I am sorry for harming the trust that I’ve worked so hard to build with you over the last few years, and I will spend the next two years working hard to rebuild it.”
Hours after the written statement, Fagan held a 30-minute news conference during which she said she “faithfully followed Oregon’s ethics rules and laws,” though she admits showing poor judgment in the process.
“I am not here today to defend my rule following,” Fagan said during the Zoom session. “I’m here today to own that there’s a difference between following all the rules and doing nothing wrong.”
She claimed that financial challenges following a divorce led her to seek supplemental income by teaching a class at Willamette University Law School and working as an independent consultant with Veriede Holding, an affiliate of La Mota.
Though she is an attorney, Fagan is not currently practicing, and has no experience in the cannabis industry.
As secretary of state, Fagan is responsible for ensuring the state’s election integrity as well as auditing state agencies.
Republicans Say Fagan Must Go
Upon learning of Fagan’s contract with La Mota late last week, state Republican leaders on April 28 accused the secretary of ethics violations and called on her to resign.
On May 1, those same legislators advanced a Constitutional amendment to establish an impeachment procedure for statewide elected officials.
Oregon is currently the only state in the nation without such a procedure.
“Recent events illustrate, yet again, the importance of having an impeachment procedure on the books as a check against negligence and abuse of power by public officials,” wrote State Rep. Shelly Boshart Davis, a Republican.
“While I recognize that investigations need time to play out, members of both parties have already expressed their dismay and concern over the emerging situation with Secretary of State Shemia Fagan and the impact this is having on public trust. The Legislature must have the ability to remove a statewide elected official when necessary.”
“Regardless of how ongoing events play out, it’s clear that Oregon should join the other 49 states by establishing an impeachment procedure,” Boshart Davis added.
Previous attempts to establish such a procedure received bipartisan support, with now Gov. Tina Kotek and U.S. Congresswoman Val Hoyle, both Democrats, voting in favor.
Governor Calls for Investigation
On Friday, Kotek called for the Oregon Government Commission to investigate Fagan’s actions and for the Oregon Department of Justice to look into a recent audit of cannabis industry regulations.
“I look forward to the findings of the Oregon Government Ethics Commission because they will confirm that I followed Oregon ethics rules and laws,” Fagan responded. “I am also eager for the Department of Justice’s review of the OLCC (Oregon Liquor and Cannabis Commission) audit because the review will verify that hard-working auditors in the Oregon Audits Division conducted their work with independence and integrity.
“My mission as Secretary of State continues to be to build trust. The first step to building trust is admitting that I broke it. I’ll spend the next two years rebuilding your trust in me and that starts today with releasing the contract that will be reviewed by the Government Ethics Commission.”
