Oregon Secretary of State Shemia Fagan resigned from her post Tuesday after consulting for a cannabis company that state officials were auditing.
Fagan, a Democrat, announced in a press release that she would resign, effective May 8. The resignation comes after local news outlets reported that she was receiving $10,000 a month in consulting fees from one of the state’s largest marijuana dispensaries; at the same time, the Oregon Department of Revenue and the Oregon Liquor and Cannabis Commission were auditing the franchise and the cannabis industry.
“While I am confident that the ethics investigation will show that I followed the state’s legal and ethical guidelines in trying to make ends meet for my family, it is clear that my actions have become a distraction from the important and critical work of the Secretary of State’s office,” Fagan said in a statement. “Protecting our state’s democracy and ensuring faith in our elected leaders — these are the reasons I ran for this office. They are also the reasons I will be submitting my resignation today. I want to thank the incredible staff in the Secretary of State’s office for their hard work and Oregonians for the opportunity to serve them. It has been a true honor to serve the people of Oregon.”
According to Willamette Week, Fagan confirmed that she had accepted a consulting contract with La Mota, one of the largest marijuana dispensary chains in the state. La Mota is in significant legal trouble; the Oregon Department of Revenue and the IRS have filed more than $7 million in liens against the owners for unpaid taxes. The owners, and the companies they control, have been sued more than 30 times in state court for failing to pay bills and other claims. The owners of the chain were also significant donors to her campaign, and other Democrats statewide.
Besides the audit, the cannabis industry is regulated by the Oregon Liquor and Cannabis Commission, which is overseen by Fagan. Furthermore, the state’s Audits Division, also overseen by Fagan, was expected to release a report last week auditing the OLCC’s regulation of cannabis; Fagan had recused herself from that investigation.
A separate report from Willamette Week Monday revealed that Fagan was being paid a $10,000 monthly consulting fee, with $30,000 bonuses for each license she helped La Mota secure outside Oregon. That figure, which totals about $120,000, is much more than her state salary of $77,000 a year. The contract had no end date. In a separate announcement Monday, she announced that she had terminated the contract.
Deputy Secretary Cheryl Myers will fill the post until Governor Tina Kotek appoints a replacement.
Fagan’s resignation comes just two months after several of her subordinates on the Oregon Liquor and Cannabis Commission were also found to have used their power for personal gain. According to an internal investigation, at least six members of the OLCC, including the agency’s former executive director, used their authority to divert rare and expensive bourbon whiskey so they could buy it for their personal use. The officials allegedly used their connections to push the rare spirits to a particular store where they could be kept away from the public.