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The Oregon Department of Justice released a report last week by an independent investigator that recommended pulling down an audit of the Oregon Liquor and Cannabis Commission implicated in former Secretary of State Shemia Fagan’s moonlighting scandal.
The investigator, California-based Sjoberg Evashenk Consulting, said state auditors had not adequately addressed the threat to its independence posed by Fagan’s moonlighting and should remove the audit.
But the audit remains online. Current Secretary of State LaVonne Griffin-Valade tells WW she will conduct her own review of the audit before taking further action. Gov. Tina Kotek handpicked Griffin-Valade to serve out the remainder of Fagan’s term after her May 2 resignation.
“I will personally oversee a reevaluation of the evidence presented in the OLCC audit,” Griffin-Valade says. “With 16 years of experience as a government auditor...I am well equipped to ensure that every action is taken to restore the public trust in this report.”
Her staff added that Griffin-Valade would consider the investigator’s recommendation, “along with other information she is gathering,” to “draw her own conclusions.” But staff declined to answer questions about a timeline for her review or what it would entail.
Attorney General Ellen Rosenblum supported the investigator’s recommendation to take down the audit.
Investigators did not determine that the audit itself was corrupted, but they did fault state auditors—who remain in their jobs and now report to Griffin-Valade—for not heeding multiple warnings that Fagan’s conduct could compromise the independence of the audit. Fagan recused herself from the audit this spring after agreeing to work for two of her top campaign donors: embattled cannabis business owners Rosa Cazares and Aaron Mitchell. Her recusal came after the audit was substantially finished.
The secretary of state’s Audits Division “did not take sufficient steps to identify and assess threats to independence (either ‘of mind’ or ‘of appearance’) at all levels,” the investigators wrote. “Nor did it adequately reassess those threats as new facts became known.”
Kip Memmott, current head of the Audits Division, also served in that capacity before Fagan resigned. He maintained that his staff followed best practices throughout the audit process, saying of Fagan shortly before her recusal, “I sincerely appreciate her transparency.”
As soon as she resigned, though, Memmott changed his tune.
“By taking a contract with a cannabis business, Secretary Fagan made a mistake that tarnished her credibility and put the Audits Division into a difficult situation,” Memmott wrote in a May 5 statement. “Her actions have cast a shadow over the good work of the audits team, and I join Deputy Secretary Myers in agreeing with the Secretary’s decision to resign.”
In 2022, Memmott made $216,000.
By keeping the audit online, Griffin-Valade may have averted rancor in her own office. But she is risking blowback from Kotek, who asked for the independent review, and Rosenblum, who oversaw it. (Disclosure: Rosenblum is married to the co-owner of WW’s parent company.)
Kotek did not respond to a request for comment on Griffin-Valade’s decision.
But Oregon House Speaker Dan Rayfield (D-Corvallis), who declared his candidacy for Oregon attorney general earlier this week, says he supports the investigator’s recommendations.
“It’s imperative that the state strengthens and improves Oregonians’ full trust in our audit process,” Rayfield said. “While I trust the secretary’s ability to thoroughly conduct the additional work recommended, I see no reason for the report to remain posted while that work is done.”