Oregon Secretary of State Resigns Amid Cannabis Consulting Scandal

Oregon Secretary of State Shemia Fagan announced her resignation this week, effective May 8, after controversial revelations of her lucrative side work as a consultant for a cannabis firm — while her office was auditing the state agency in charge of regulating the industry.

The resignation brought a swift and surprising end to a mounting scandal over her decision to accept a $10,000-per-month contract with the owners of an Oregon cannabis chain, La Mota, at the same time her office audited state regulations on cannabis businesses.

The cannabis entrepreneurs are also high-profile Democratic donors, including to her own campaign for secretary of state in 2020. Investigative reporting by Willamette Week broke the story late last month, followed by calls for her to resign from Republican House and Senate leaders.

Fagan on Monday, May 1, announced she had terminated the contract and held a media availability in which she repeatedly apologized while defending her actions as within legal and ethical bounds.

But she abruptly changed course the following day, admitting that the scandal had become a “distraction” that was negatively impacting her office and its work regulating state businesses as well as overseeing the upcoming special district elections in all 36 counties.

The resignation marked a stunning fall from grace for the 41-year-old former legislator who appeared to be a rising star in the Oregon Democratic Party.

“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,” Fagan said in a press release.

As of 1 p.m. Monday, Deputy Secretary Cheryl Myers will take on oversight of the agency until a new secretary is appointed by Governor Tina Kotek. Under Oregon law, she must appoint a Democrat, like Fagan.

In her own release Monday, Kotek noted that she supported the decision.

“It is essential that Oregonians have trust in their government,” she said. “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.”

Myers called Fagan’s resignation an “unfortunate situation” that “put this agency in a difficult position.” She said she also agreed Fagan’s resignation was the right call.

“This is a resilient agency, with strong division leadership and internal systems that can withstand change,” she said. “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.”

She said she does not expect any service interruptions during the transition Monday.

Elections Director Molly Woon said Fagan’s resignation would have “no bearing” on the office’s ability to support county clerks and election divisions on May 16.

Unlike in presidential and midterm election years, the secretary of state is not the filing officer for the May 2023 contests and will not be called upon to certify the election.

Audits Director Kip Memmott said Monday that he stands behind his work and that of his staff in preparing the audit of the Oregon Liquor and Cannabis Commission. As requested by Kotek, an independent, third party will soon review their work to ensure it was done in compliance with government and industry standards.

“I look forward to that validation as we begin to restore the trust that is necessary to the work we do as auditors,” Memmott said. “From the origin of the idea to audit OLCC up until the report release last week, the Oregon Audits Division followed government auditing standards and procedures every step of the way, as we always do.”

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