Oregon Secretary of State Shemia Fagan, embroiled in consultant controversy, announces resignation
(Update: Fagan resigns, says controversy became 'distraction'; statements from governor, deputy secretary of state, legislative leaders)
Deputy Secretary of State Cheryl Myers to step in pending new appointment by governor
SALEM, Ore. (KTVZ) -- Oregon Secretary of State Shemia Fagan, who quickly became embroiled in controversy in recent days over a side job she took earlier this year as a consultant to a marijuana business, announced her resignation Tuesday morning.
Here's the full statement:
Secretary of State Shemia Fagan Announces Resignation, Effective Monday May 9
SALEM, OR — Oregon Secretary of State Shemia Fagan announced her resignation today, effective Monday May 8.
The Secretary will continue in her official duties until Monday, May 8, at which point Deputy Secretary Cheryl Myers will take on oversight of the agency until a new Secretary is appointed by the Governor. The Deputy has the power to perform any act or duty of the Secretary of State pertaining to the office of the Secretary (ORS 177.040) and is well positioned to help the agency maintain stability and continuity of operations during this transition.
The Oregon Elections Division and Oregon’s 36 county elections officials are fully prepared to administer the May 16 Special Districts Election. The Elections Division will work with counties to complete the normal activities involved with administering local elections.
The following is a statement from Secretary of State Shemia Fagan:
“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. 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.
“At this time, I believe it is in the best interest of our state for me to focus on my children, my family, and personal reflection so that the Secretary of State staff can continue to offer the exemplary customer service Oregonians deserve.”
Governor Tina Kotek Issues Statement on Secretary of State Shemia Fagan’s Resignation
Governor to immediately start process to select replacement
Salem, OR — Today, in response to Secretary of State Shemia Fagan’s resignation, Governor Tina Kotek issued the following statement:
“This morning, Secretary Fagan informed me of her decision to resign. I support this decision. It is essential that Oregonians have trust in their government. I believe this is a first step in restoring that trust. During the upcoming appointment process, my office will do everything possible to support the hard-working staff in the Secretary of State’s office and ensure this will not disrupt the May 16 election.”
The Governor’s office will initiate the process to identify and appoint a replacement. Deputy Secretary Cheryl Myers will serve as acting Secretary of State in the interim.
| Deputy Secretary of State Cheryl Myers to Continue SOS Agency Oversight During Transition |
| SALEM, OR — Deputy Secretary of State Cheryl Myers issued the following statement today. “This is a resilient agency, with strong division leadership and internal systems that can withstand change. We are ready to continue the important work of the Secretary of State’s office during this transition. “My first priority is to make sure Oregonians receive the customer service they deserve. This agency does such critical work, and it’s our job to put Oregonians first during this transition. This is an unfortunate situation, but a change of leadership will allow agency staff to continue their good work with less distraction moving forward.” |
The Secretary will continue in her official duties until Monday, May 8, at which point Deputy Secretary Cheryl Myers will take on oversight of the agency until a new Secretary is appointed by the Governor. The Deputy has the power to perform any act or duty of the Secretary of State pertaining to the office of the Secretary (ORS 177.040) and is well positioned to help the agency maintain stability and continuity of operations during this transition.
All SOS divisions have consistently reported to Oregon’s Deputy Secretary of State over the last two years. In her role, Deputy Myers will continue her oversight of the agency and will collaborate with the Governor’s Office on a plan to onboard the Governor’s appointment to replace the outgoing Secretary Fagan.
Deputy Myers' professional background includes public policy, organizational leadership, economic development, public education/youth advocacy, and a history of assisting organizations to construct equitable cultures and embed collaborative practices. Her prior public service roles include Director of Economic & Business Equity in the Governor’s Office, Chief of Staff for the Higher Education Commission and as Operations & Engagement Director for Educator Advancement in the Chief Education Office and 8 years as an elected school board member. She is well positioned to help the agency maintain stability and continuity of operations during this transition. Her biography is available on the SOS website.
Legislative Leaders React to Secretary of State Shemia Fagan’s Resignation
In response to Secretary of State Shemia Fagan’s resignation from office, Speaker of the House Dan Rayfield, Senate President Rob Wagner, House Majority Leader Julie Fahey, and Senate Majority Leader Kete Lieber issue the following statement:
“As elected leaders, we know that our work depends solely on our ability to hold the trust of the people we serve and represent. Secretary of State Fagan’s severe lapses of judgment eroded trust with the people of Oregon, including legislators who depend on the work of the Audits Division for vital information on public policy. This breach of trust became too wide for her to bridge. Her decision to resign will allow the state to move on and rebuild trust.”
Republican Leaders Issue Statement in Response to Secretary Fagan’s Resignation
SALEM, Ore. – This morning, Oregon Secretary of State Shemia Fagan announced her resignation, effective May 8th, in light of recently published admissions in the Willamette Week, who laid out a series of major ethics violations.
“Secretary Fagan found herself in a web of ethical violations and it finally caught up to her thanks to exceptional investigative journalism by Willamette Week’s Sophie Peel and Nigel Jaquiss. It is critically important that statewide elected officials exercise good judgement at all times. It is clear that Fagan has broken Oregon’s trust beyond repair. It’s time to return integrity to the Secretary of State’s office,” said Senate Republican Leader Tim Knopp (R-Bend).
“Today’s resignation of Secretary Fagan reflects the level of corruption occurring in state government. Since the beginning of the year, I have said we need a transparent process. The level of abuse Secretary Fagan flaunted from her official position is just another example the extreme measures of one-party rule in Oregon,” said House Republican Leader Breese-Iverson (R-Prineville). “We encourage the Governor to use this opportunity to appoint a person who can restore trust and ethics in the Secretary of State’s office. Additionally, we suggest due diligence and thorough vetting in the consideration of potential appointees.”
On Friday, following reports of Fagan’s consulting contract, Republican leaders called for her immediate resignation.
Fagan had announced Monday she has quit her consultancy with a marijuana company and apologized to Oregonians for "harming the trust that I've worked so hard to build."
"I owe the people of Oregon an apology" Fagan said then, "I owe the diligent professionals in my agency an apology. I am truly sorry."
But she also said she followed state ethics guidelines in taking the outside position to supplement her income.
Fagan first signed the contract with Veriede Holdings LLC back in February. The side job came under fire after Fagan's office released an audit of the Oregon Liquor & Cannabis Commission last Friday.
Fagan previously said she recused herself from the audit process. "I exercised poor judgment by contracting with a company that is owned by my political donors, and is regulated by an agency that was under audit by my audit's division."
Veriede Holdings is an affiliate of La Mota, a cannabis chain whose owners have reportedly failed to pay millions of dollars in cannabis and federal income taxes, and faced workplace complaints.
Fagan's audit called for the OLCC to "reform" some rules for marijuana businesses, saying they are "burdens" when combined with federal restrictions on interstate commerce, banking and taxation.
"I don't always get it right. But I reflect, I learn, and I seek to repair. And that's what I'll be doing with Oregonians for the next two years" Fagan said during the new conference.
Former Bend mayor and NewsChannel 21 political analyst Jeff Eager said he wouldn't be surprised if Fagan has to resign.
"In Oregon, the only way for someone to leave office besides being unelected is to resign," he said. "We don't have impeachment in Oregon. So if she is going to go, she in all likelihood, is going to resign."
(Actually, Republicans have proposed a constitutional amendment to establish an impeachment procedure for statewide elected officials, but they said Monday the resolution is in the House Rules Committee and has yet to be granted a hearing by the Democrat-led body.)
Eager also said he wouldn't be surprised if Oregon voters remember this story if she runs for reelection: "It's rare in Oregon for a statewide elected official to be so roundly, kind of covered in a negative way by the media, which she is."
According to the contract that Fagan severed ties with Monday, Fagan was to be paid $10,000 per month by Veriede Holdings LLC, with bonuses of $30,000 for successfully landing a cannabis license in any state other than Oregon or New Mexico.
Fagan earns $77,000 per year as secretary of state, one of four statewide elected offices in Oregon, and the next in line to be governor, should the officeholder become unable to complete her term.
I asked Fagan, "How do you plan and what do you plan to do, to gain back the trust of Oregon voters?
She replied, "You know, I think the first step to rebuilding trust is to admit when you've broken trust in the first place. That's what I'm here to do today."
Here's her full statement, ahead of the conference, and the contract that she released to the media Monday morning; below is Monday's Associated Press story:
“Today I am announcing that I have terminated my contract with Veriede Holdings, LLC.
“I owe the people of Oregon an apology. 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.
“Earlier this year, I began working for supplemental income, both at Willamette University Law School teaching a class and as an independent contractor consulting with Veriede Holding on the cannabis industry outside of Oregon.
"I diligently followed the Oregon Government Ethics Commission’s published guidelines for private employment of public officials, the same exact ethics rules I’ve followed for a decade, since I became a legislator in 2013.
"I look forward to the findings of the Oregon Government Ethics Commission because they will confirm that I followed Oregon ethics rules and laws. I am also eager for the Department of Justice’s review of the OLCC audit because the review will verify that hard-working auditors in the Oregon Audits Division conducted their work with independence and integrity.
“I’m holding a press conference today to answer questions and to own that there is a difference between following all the rules and doing nothing wrong. I broke your trust. That was wrong. I am truly sorry.
“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.”
Oregon secretary of state is sorry for outside marijuana job
By ANDREW SELSKY
Associated Press
SALEM, Ore. (AP) — Oregon Secretary of State Shemia Fagan apologized Monday for taking a job as a consultant for a marijuana company — part of an industry that her office just audited — that paid far more than her state salary.
After previously refusing to disclose the terms of her contract, Fagan had her office email reporters a copy on Monday. It showed the consultancy paid $10,000 per month, with bonuses three times that amount if she helped the company get licensed in other states.
Fagan, a Democrat who is the state’s second-highest ranking official, indicated she aims to hold onto her elected position despite Republican calls for her to resign. Gov. Tina Kotek, a Democrat, requested investigations by the Oregon Government Ethics Commission and the Oregon Department of Justice into the matter Friday.
“I am sorry for harming the trust that I and so many others have worked so hard to build with you over the last few years,” Fagan said during a Zoom conference she held Monday. “I will begin working to build that trust back today.”
The matter came to a head after Fagan's office released an audit Friday that called for the Oregon Liquor and Cannabis Commission to “reform” some rules for marijuana businesses, saying they are “burdens” when combined with federal restrictions on interstate commerce, banking and taxation.
Fagan recused herself from the audit of Oregon’s marijuana regulatory agency because she is a paid consultant of an affiliate of marijuana retail chain La Mota, her spokesperson, Ben Morris, said at a virtual news conference timed with the audit’s release.
Fagan noted Monday that ethics guidelines allow outside employment. She said the consultancy didn't represent a conflict of interest because any action taken as a result of the audit would be by the governor, Legislature or cannabis commission; and because a wide range of businesses would be affected by any regulation changes, not just her client.
La Mota’s co-owner has hosted fundraisers for top Democratic Oregon politicians, including Fagan, while the co-owner, her partner and their business allegedly owed $1.7 million in unpaid bills and more in state and federal taxes, according to Willamette Week, a Portland newspaper.
Fagan told reporters Monday she contacted Connecticut Lt. Gov. Susan Bysiewicz as part of her consulting gig, “just to ask who would be somebody for a cannabis company to talk to if they wanted to get the lay of the land.”
Bysiewicz spokesperson Samantha Taylor said in a statement that Fagan called about three weeks ago, asking about “Connecticut’s cannabis license process for a client Fagan had as part of her consulting business.”
After learning of Fagan's outside work, minority Republicans in the Legislature called for her resignation.
“This appears to be an ethics violation, and if it isn’t, then Oregon’s ethics laws are broken,” Senate Republican leader Tim Knopp and House Republican leader Vikki Breese-Iverson said in a joint statement Friday.
The governor underscored her own concerns as she called for the probes, saying: “It’s critical that Oregonians trust their government.”
Fagan announced Monday she was terminating her contract with Veriede Holdings, the La Mota affiliate. She also provided a copy of the contract, signed Feb. 24, which paid $10,000 per month plus a bonus of $30,000 if she helped the company acquire marijuana licenses in any state other than Oregon or New Mexico. A total of 21 states and Washington, D.C., have legalized recreational use of marijuana.
Fagan's annual salary as secretary of state, a job that is responsible for running elections in Oregon and overseeing state audits, is $77,000. Fagan told reporters she is divorced with two young children and has student loans and other bills that she says her secretary of state's salary is not enough to cover.
She said her consultant job had nothing to do with her elected position. Reporters, though, were skeptical. They asked why she would be hired as a pot consultant unless La Mota wanted her to leverage her position to expand their business in other states, especially when there are numerous bona fide marijuana business experts in Oregon.
Fagan responded that she has experience advising and representing, as a lawyer, Oregon businesses and contended that her work for La Mota didn't require her to be a marijuana expert.
At Monday's news conference, Fagan fought back tears as she said she is “deeply honored to serve as Oregon Secretary of state, regardless of the compensation.”
“I owe the people of Oregon an apology," Fagan said. “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.”
Fagan said she was donating all money in her political action committee to the Oregon Humane Society.
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Associated Press reporter Susan Haigh in Hartford, Connecticut, contributed to this report.
