Williamette Week recently revealed that Oregon Secretary of State Shemia Fagan had a lucrative side gig as a paid consultant for Veriede Holdings, an affiliate of cannabis chain La Mota. Fagan’s annual salary as secretary of state is $77,000. La Mota paid her $10,000 a month or $120,000 a year, which means that technically she’s a cannabis consultant who moonlights as Oregon’s secretary of state.
La Mota is the second-largest cannabis dispensary in Oregon, and Willamette Week’s Sophie Peel has some excellent reporting on how its sketchy AF co-founders Rosa Cazares, 34, and her partner Aaron Mitchell, 45, have bankrolled top Democrats while carrying outstanding tax and business debts. “The story of La Mota isn’t simply one of a company’s struggles,” Peel wrote. “It points to serious lapses of oversight by the Oregon Liquor and Cannabis Commission.”
The La Mota chain and its owners have been issued more than $7 million in state and federal tax liens in recent years and have been sued in Oregon circuit courts 30 times. Many of the complaints allege nonpayment of bills. As Cazares and Mitchell’s troubles accumulated, they and their companies contributed more than $200,000 to top Democratic politicians, including Gov. Tina Kotek, Fagan and Senate President Rob Wagner (D-Lake Oswego).
Peel had followed up with Fagan and Gov. Tina Kotek about donations Cazares and Mitchell made to their political campaigns. That’s when it was revealed that Fagan was on La Mota’s payroll. This seemed like an obvious conflict of interest, as her office doesn’t just oversee the state’s elections but audits the state’s marijuana program.
Fagan had claimed the time she spent on her La Mota contract was “minimal,” but that only raised more questions when, under pressure, she released her big-money contract. The contract didn’t provide many details about Fagan’s actual consulting work, but the contract was indefinite with no explicit ending date. That’s peculiar. It’s unclear what services Fagan would provide for the company. She’d previously worked as an employment lawyer but her bar license is inactive so she can’t provide any legal advice. She has no prior (professional) experience in the cannabis industry.
Court records show that Fagan needed the money. When she ran for secretary of state in 2020, the recently divorced mother of two disclosed income of $5,500 a month, but she was spending $5,889 a month ($1,974 of that was in rent). Her total credit card debt was $67,000, and her student loan debt was almost $37,000. She also had a personal loan of $16,000 and owed her divorce lawyer $4,500 for apparently getting her the “poverty special” settlement.
These disclosures are public record and easily available to anyone, particularly those who might see it as potential leverage.
According to Willamette Week, Fagan didn’t discuss her side gig with the Oregon Government Ethics Commission, which is standard protocol when a state employee has a possible conflict. Fagan started working for La Mota in February, and the company was her first and only consulting client. The $10,000 a month she received was just her base salary. Fagan could also pull in $30,000 bonuses for each license she helped Veriede Holdings obtain outside the states of Oregon and New Mexico.
Fagan valiantly recused herself in February from an audit of the OLCC’s cannabis regulations, but Willamette Week reports she did so only after the audit was completed. (Damn reporters and their access to calendars!) Willamette Week obtained documents showing “that more than a year ago, Fagan told staff in the Audits Division to interview Cazares, the La Mota co-founder. Emails show Cazares advised Fagan in January 2021 what to examine — mostly regulations Cazares considered unfair.” Yikes.
State Republicans had called for her resignation, and the situation quickly started to unravel for Fagan on Friday, when the Oregon Government Ethics Commission announced it was launching an investigation into Fagan’s contract with Gov. Kotek’s support. The governor also asked the Oregon Department of Justice to conduct a full review of the cannabis audit. Further distancing herself from the shit show, Kotek said she would give $75,000 in campaign contributions she’d received from Cazares, Mitchell, and La Mota to the Oregon Food Bank.
Monday, Fagan was suitably contrite but seemed to believe she could weather the escalating scandal.
“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,” Fagan said. “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.”
By Tuesday, Fagan appeared to have come down from her denial high. She released a statement announcing her resignation, effective next Monday:
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.
Yeah, no, politicians rarely resign when they are truly “confident” that an ethics investigation will exonerate them. Fagan’s chief of staff, Emily McLain, also submitted her resignation. Under state law, Kotek will name a replacement, who’ll have to settle for weekend shifts at Burgerville if they need extra cash.
That’s how fast an ethics scandal is resolved when you’re not a Supreme Court justice.
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