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With extraordinary speed, the political career of Oregon Secretary of State Shemia Fagan ended Tuesday morning after a self-destructive decision to freelance for a troubled cannabis outfit.
“The secretary of state’s office functions well only when Oregonians have complete faith and trust in the actions of who they chose to hold the office,” says former Gov. Kate Brown. “To achieve this, the secretary must be beyond reproach, lead with integrity, and be as transparent as possible. Unfortunately, Secretary Fagan has failed Oregonians’ trust.”
Until last week, Fagan’s future had few limits. “She’s the only Democrat in this state who could write her own ticket,” says one Democratic political consultant. “The brightest star on our bench,” says another.
But that star burned out quickly.
“This was the correct decision,” says U.S. Sen. Ron Wyden (D-Ore.) of Fagan’s abrupt resignation. “The people we elect to represent us must be able to focus on the public service that is required of us as elected officials.”
Fagan, 41, a former legislator and employment lawyer, was next in line to follow Gov. Tina Kotek whenever Kotek leaves office. And because that might not happen for eight years, Fagan and her supporters already had a Plan B—it was a poorly kept secret that she hoped to succeed Wyden when Oregon’s 74-year-old senior U.S. senator called it quits.
In the meantime, she was in effect the state’s chief integrity officer, responsible for conducting elections, auditing state agencies and programs, and making sure that companies doing business in Oregon were legally registered here.
Last year, when she determined that journalist Nicholas Kristof didn’t meet Oregon’s residency requirements to run for governor, Fagan issued a statement that could be the credo for her office.
“The rules are the rules, and they apply equally to all candidates for office in Oregon,” Fagan said then.
But a fast-breaking scandal of Fagan’s own making pulled her under. She couldn’t convince the pillars of the Democratic Party and Oregonians that the rules didn’t apply to her.
Fagan’s trouble began March 29, when WW published a story about the second-largest cannabis dispensary chain in the state, La Mota, and how the couple who founded it and their companies faced millions of dollars in state and federal tax liens and lawsuits alleging unpaid bills. Even as La Mota’s principals, Rosa Cazares and Aaron Mitchell, failed to meet their financial obligations (the tax liens issued against them and their companies now total over $7 million), they somehow found the money to contribute more than $200,000 to the state’s top Democrats, including $45,000 to Fagan.
Politicians, including Kotek, brushed off questions about taking campaign contributions from a retail chain that had allegedly stiffed so many creditors, including the state of Oregon. But pressure mounted.
And then, last Thursday, an admission by Fagan blew the scandal wide open.
The day before, on a Wednesday morning, WW received a tip that seemed too unbelievable to be true. Acting on the tip, WW sent questions to Fagan at 1 pm on April 26.
At 1:45 pm the following day, April 27, Fagan admitted to WW that she’d signed a contract to work as a consultant for Veriede Holding LLC, whose principals are La Mota’s owners, Cazares and Mitchell.
To sign the contract, Fagan shirked one of her fundamental responsibilities: overseeing the audits of state agencies, a function she called in a 2020 campaign debate “the best tool the secretary of state has.” On Feb. 15, more than a year after the secretary of state’s Audits Division began looking at the Oregon Liquor and Cannabis Commission’s regulation of the cannabis industry, Fagan recused herself from the audit.
Fagan abdicated a primary duty of the office to which Oregonians had elected her—holding state agencies and offices to account—in order to take large monthly payments from two of her most prominent political donors who were facing a litany of legal and financial problems.
Worse still, working papers from the audit showed that a pressing concern for Fagan before the audit began and when it was halfway through was to make sure auditors heard criticisms Cazares had expressed to her about the OLCC.
In other words, Fagan directed a key tool of accountability to suit the interests of the state’s second-largest cannabis chain, then went to work for its owners while she held a full-time job as the person charged with ensuring the integrity of state government and elections.
Three former Oregon secretaries of state told WW on Tuesday morning that Fagan should resign, adding painful cuts to Fagan’s ability to recover from the scandal.
“The bad judgments, lack of due diligence and transparency, and failure to immediately cancel this ill-advised contract once millions in tax liens and unpaid bills came to light have done incalculable damage to Oregonians’ trust in the agency,” said Phil Keisling, who served as Oregon’s secretary of state from 1991 to 1999.
Bev Clarno, a Republican who served from 2019 to 2021, said there “aren’t enough hours in the day to do that job well and have time left over for other work.”
Jeanne Atkins, secretary of state from 2015 to 2017, says Fagan displayed extremely poor judgment in taking the contract: “This was a huge mistake.”
Things unraveled quickly in the 72 hours after Fagan admitted to WW that she had taken outside work.
Over the weekend, three key Democrats, Kotek, Senate President Rob Wagner (D-Lake Oswego) and House Speaker Dan Rayfield (D-Corvallis), issued statements that were anything but supportive. Kotek said she was “dismayed” by Fagan’s actions. She asked the Oregon Government Ethics Commission to investigate and requested that the Oregon Department of Justice examine the circumstances around the OLCC audit. Through a spokesman, Wagner expressed “significant concerns” about Fagan’s actions.
“These allegations are bad, it’s difficult to see them any other way,” Speaker Rayfield added. “It has obviously impacted the credibility of the secretary of state’s audits.”
And many of the politicians, including Kotek, who’d also taken La Mota money suddenly rushed to get rid of it after weeks of inaction.
Republicans, led by Senate Minority Leader Tim Knopp (R-Bend) and House Minority Leader Vikki Breese-Iverson (R-Prineville), said the quiet part out loud, demanding Fagan’s resignation.
Meanwhile, Fagan initially defended her decision to take outside work from a state-regulated business, saying she had broken no ethics laws and had gone above and beyond by recusing herself from the OLCC audit.
Here’s what she did not do: immediately make public her consulting contract.
Instead, she shared the contract the following Monday morning only after intense pressure.
“That was a huge mistake,” said a crisis communications consultant over the weekend. “She missed the chance to get it out there. Now, she looks like she’s hiding something.”
Indeed, Fagan was holding back details that made matters worse.
The contract shows she was paid substantially more for her cannabis consulting—$10,000 a month, plus $30,000 for every cannabis license obtained outside of Oregon and New Mexico—than her $77,000 state salary.
The document provided little detail about what she was getting paid for, although Fagan told reporters she was doing non-legal research on cannabis business opportunities in other states. (She said that once she was readmitted to the Oregon State Bar, she planned to perform legal work for the company.)
Meanwhile, Fagan was broke. Filings in 2020 from her divorce show she spent more than she made every month. Her credit card, tuition and personal debt totaled nearly $135,000. She admitted as much about her financial status in a May 1 press conference: “To put it bluntly, my secretary of state salary alone is not enough to make ends meet.”
Other details that WW uncovered before she shared the contract did not help Fagan, either.
Records show she pressed the Audits Division twice to speak with Cazares about the scope of the audit as early as January 2021—well before the audit had even begun. Cazares’ complaints about the OLCC in an interview with the lead auditor—that it was sexist, heavy-handed with enforcement, punitive, and unsupportive to people of color, and treated her like a “criminal”—made their way into the lead auditor’s questioning of OLCC leaders during audit interviews conducted in 2022.
Read a timeline of Fagan’s dealings with La Mota.
And records also show Fagan only recused herself from the OLCC audit a week after the yearlong probe was substantially finished.
Longtime political observers say the judgment she displayed irreparably damaged her ability to remain at the job.
“Taking a contract itself crosses a line,” says Jim Moore, director of political outreach at Pacific University. “But taking a contract with an organization which has business with the state of Oregon is a bright red line.”
People watched in shock as the career of a once-rising star of the Democratic Party took on the trajectory of a SpaceX rocket.
For most of Fagan’s career, she could do no wrong. After growing up poor—she says her mother suffered from addiction and the family was sometimes homeless—in the tiny town of Dufur and then The Dalles, she worked her way to law school and, in 2012, knocked off an incumbent Republican for an Oregon House seat in Clackamas County.
In its endorsement that year, WW called Fagan “one of the best first-time candidates we’ve ever seen.”
After two terms in the House, Fagan left politics briefly to focus on her young family (she has two children) and make some money. But as Oregon’s housing crisis worsened, progressives in 2018 searched for a candidate to challenge Sen. Rod Monroe (D-Portland), a longtime lawmaker and landlord who stood in the way of tenant protections.
Fagan stepped up, trouncing one of the Democrats’ elder statesmen 62% to 20%. She came back to Salem bolder—in 2019, she shocked propriety and her Senate colleagues by standing on the Senate floor to oppose the reelection of the longest-serving Senate president in Oregon history, Peter Courtney (D-Salem).
In 2020, with the secretary of state’s position open, public employee unions and other progressive groups landed on Fagan as the person they’d most like to see supervising the state’s elections. They helped her squeeze by former state Sen. Mark Hass (D-Beaverton) in the Democratic primary by less than a percentage point. Fagan memorialized her new position with a large tattoo reading “VOTE” on her right forearm.
Fagan took office just as President Donald Trump’s lies about the 2020 election vaulted the low-profile work of election administration onto front pages.
“My mission is simple: My job is to build trust,” Fagan said at a 2022 Democratic Party of Oregon event where La Mota was a chief sponsor. “We want to build trust between Oregonians and their state government.”
Here are all the Oregon Democrats giving political contributions from La Mota to charity.
Chris Koski, professor of political science at Reed College, says the once “sleepy office” of the secretary of state is now steeped in politics. “They’re now dealing with a policy issue—democracy—that used to be universally agreed upon.”
Fagan appealed to working-class Oregonians. She often told the story of her rocky childhood. She said her personal experience watching Oregon programs do little to help her family would make her a powerful and dogged auditor.
But her career appears to have come to a sudden end because she traded away what mattered most—the trust of the public—for $10,000 a month.
“Secretary Fagan made a tragic mistake on a journey of public service,” says U.S. Sen. Jeff Merkley (D-Ore.), “in which she has otherwise excelled in advocating for policies that would build a better state with more and improved opportunities for Oregon’s families.”
Nigel Jaquiss contributed reporting to this story.