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Oregon Secretary of State LaVonne Griffin-Valade earlier this month announced her office’s audits schedule for the coming year. Inside that document are changes the Audits Division pledges to make due to WW’s reporting on how former Secretary of State Shemia Fagan sought to influence an audit that affected her patrons.
Fagan resigned in May 2023, following WW’s reporting that she had signed a $10,000-a-month consulting contract with an embattled cannabis company, La Mota. Records obtained by WW last spring showed that Fagan helped tailor the scope of an audit of the Oregon Liquor and Cannabis Commission to the wishes of La Mota CEO Rosa Cazares.
Gov. Tina Kotek chose Griffin-Valade to replace Fagan. “I knew my top priority had to be rebuilding public trust in our agency,” Griffin-Valade said in a statement announcing this year’s audit schedule. “The [Audits] Division has long enjoyed a well-deserved reputation for objectivity and integrity, so it was disappointing to see how the actions of one individual stirred public doubt about the credibility of their work.”
Though Griffin-Valade did not name names, what she alluded to was clear: The Audits Division’s work on the OLCC audit was subjected to intense scrutiny after records revealed that Fagan had instructed auditors on multiple occasions between 2021 and 2023 to speak with Cazares to help inform the scope of the audit. (Griffin-Valade in her own review determined the Audits Division did nothing improper during the course of the OLCC audit, although an outside investigator for the Oregon Department of Justice said it should have been taken off of state websites.)
Griffin-Valade made changes to the audits process this year to prevent another scandal. She’s also auditing another state agency where WW first reported La Mota had made inroads. Here’s what those changes are, and the reporting that led to them.
What WW reported on the cannabis audit:
On April 27, 2023, WW reported that Fagan was working as a consultant to La Mota with a contract paying her $10,000 a month. La Mota’s CEO, Cazares, had long complained that OLCC inspectors treated her unfairly as a woman of color, even as she made cash contributions to political candidates, including Fagan.
On April 28, in response to a public records request by WW, the Secretary of State’s Office produced records showing that Fagan pressed auditors repeatedly in 2021 and 2022 to speak with Cazares as they formed the scope of an audit of OLCC cannabis regulation. Fagan even asked Cazares to edit the description of the audit, and then included that edit in the audit’s plan.
It was not until after the OLCC audit was finished, in early 2023, that Fagan declared a conflict of interest and recused herself from the audit in preparation for her contract work with La Mota.
Fagan signed the contract despite repeated warnings from her staff not to do so, WW reported in the weeks following Fagan’s May 2 resignation.
What the rules are now:
First, the Audits Division will fully disclose the “origin” of each audit and why the division decided to pursue it, Griffin-Valade said in this year’s audit plan.
Second, her office will recruit a third-party consultant to help the Audits Division develop a process that ensures all conflicts of interest are identified before and throughout any given audit.
What WW reported on an internship program:
In August 2022, then-Commissioner Val Hoyle of the Oregon Bureau of Labor & Industries helped shepherd a $500,000 apprenticeship grant to a nonprofit closely affiliated with La Mota, WW reported last year, despite the nonprofit having no prior history of such work.
Records showed that Hoyle interrupted the agency’s standard process to help ensure the nonprofit, called Endeavor, would receive the grant, despite concerns the bureau’s apprenticeship committee had about the proposal. La Mota’s co-founders were prominent campaign donors to Hoyle, who is now a member of Congress.
What Griffin-Valade’s audit plan will look into this year:
The first audit listed on Griffin-Valade’s schedule is an examination of BOLI, which will include “oversight of its apprenticeship program,” as well as the agency’s “governance model.”
Current BOLI Commissioner Christina Stephenson, whose administration in the spring of 2023 clawed back the unspent remainder of the Endeavor grant in light of WW’s reporting on La Mota, requested the review of her own agency’s program. Auditors also requested that the apprenticeship program be audited.