Oregon’s Secretary of State Shemia Fagan Resigns after Cannabis Consulting Scandal

Oregon Secretary of State Shemia Fagan is under fire for moonlighting as a cannabis consultant for a company run by Democratic donors while her office was auditing the industry. (Oregon Secretary of State’s office)

Oregon Secretary of State Shemia Fagan will resign next week and officially step down on May 8, the secretary announced on Tuesday.

The resignation comes after it was revealed that Fagan had accepted a lucrative side job as a consultant to a cannabis company.

Her deputy, Cheryl Myers, will step into the position until Gov. Tina Kotek appoints a successor.

“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,” Fagan said in a statement on Tuesday. “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. I want to thank the incredible staff in the Secretary of State’s Office for their hard work and Oregonians for the opportunity to serve them. It has been a true honor to serve the people of Oregon.”

Tina Kotek speaks during Day 1 of the Democratic National Convention at the Wells Fargo Center in Philadelphia, Penn., on July 25, 2016. Kotek said Tuesday she supports the decision by Oregon Secretary of State Shemia Fagan to resign over ethics allegations. (Robyn Beck/AFP via Getty Images)

Kotek supports Fagan’s decision to resign.

“I support this decision,” Kotek said in a statement. “It is essential that Oregonians have trust in their government. 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.”

Fagan, a Democrat, apologized on Monday for working for the marijuana company but indicated that she intended to serve out the remaining 20 months of her term. Making matters worse, Fagan worked for two months as a paid consultant for a marijuana business, which has a sketchy financial record, while her office was wrapping up an audit of the Oregon Liquor and Cannabis Commission.

Oregon ethics laws allow public officials to have private jobs and many lawmakers, who are part-time paid government employees, do so in order to make ends meet.

Fagan’s consulting job for Variede Holding, LLC, an affiliate of the cannabis chain La Mota, was first reported on April 27 by Willamette Week. The contract with Variede stipulated that she would be paid $10,000 per month, with bonuses three times that amount if she helped the company get licensed in other states. The secretary of state’s salary is $77,000 annually—established almost a decade ago.

Senate Republican Leader Tim Knopp (R-Bend) praised the news outlet for exposing Fagan’s side job indiscretions.

“Secretary Fagan found herself in a web of ethical violations and it finally caught up to her thanks to exceptional investigative journalism by Willamette Week’s Sophie Peel and Nigel Jaquiss. It is critically important that statewide elected officials exercise good judgment at all times. It is clear that Fagan has broken Oregon’s trust beyond repair. It’s time to return integrity to the Secretary of State’s office,” Knopp said in a statement (pdf).

The audit, released Friday, called for Oregon’s marijuana regulatory agency to “reform” some rules for marijuana businesses, saying they’re “burdens,” combined with federal restrictions.

Fagan apologized for taking the outside job, attributing it to “poor judgment” and quit the moonlighting job.

“I am not here today to defend my rule-following,” Fagan said during the virtual press conference Monday. “I’m here today to own that there’s a difference between following all the rules and doing nothing wrong.”

“I owe the people of Oregon an apology,” Fagan added. “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.”

House Republican Leader Vikki Breese-Iverson (R-Prineville) called on the governor to “exercise due diligence and thorough vetting” as she appoints a new secretary of state.

“Today’s resignation of Secretary Fagan reflects the level of corruption occurring in state government. Since the beginning of the year, I have said we need a transparent process. The level of abuse Secretary Fagan flaunted from her official position is just another example of the extreme measures of one-party rule in Oregon,” Breese-Iverson said in a statement (pdf). “We encourage the Governor to use this opportunity to appoint a person who can restore trust and ethics in the Secretary of State’s office.”

Oregon doesn’t have a lieutenant governor so the secretary of state is next in line if the governor’s office becomes vacant.

Deputy Secretary of State Cheryl Myers said she is ready to take over in Fagan’s place and will continue to lead while overcoming what she called an “unfortunate situation.”

“This is a resilient agency, with strong division leadership and internal systems that can withstand change,” Myers said in a statement. She added that the leadership change “will allow agency staff to continue their good work with less distraction moving forward.”

The Associated Press contributed to this report