Oregon: Resignation of Secretary of State and Chief of Staff bring ethics and incompatibilities to discussion

Shemia Fagan, Secretary of State for Oregon, announced today that she is stepping down, along with her chief of staff, following the scandal uncovered by journalist Sophie Peel, of the local weekly Willamette Week. At the basis of the dismissal is a potential conflict of interest and controversial funding, as Fagan would be accumulating functions in a public office with those of a consultant for a cannabis company that will have financed his political campaign. 

In Oregon, tempers are running high over the recent controversy surrounding Secretary of State Shemia Fagan, who allegedly doubles as a consultant for a local cannabis company. After a week of many declarations, denials and “reflection”, Fagan firedhimself, claiming that he was unable to continue in office. The turning point that triggered his decision was the confirmation given to journalist Sophie Peel, from the local newspaper Willamette Week, that he actually has a service contract with a company that financed his campaign.

After months of covering the case of financing political figures by the cannabis company La Mota; the American journalist ended up discovering the relationship between the Secretary of State and that chain of dispensaries, discovering that she was providing consulting services to a company affiliated with that renowned chain of dispensaries. And Fagan's confirmation, in response to Sophie Peel's queries, was a veritable tornado that led to the resignation of the Secretary of State and her chief of staff, Emily McClain. The case is bringing up for discussion the incompatibilities and ethics of the former Secretary of State and the way in which the new LOBBY of the cannabis industry.

Emily McClain, Secretary of State Shemia Fagan's chief of staff, resigns. #orpol pic.twitter.com/FHVwWduX86

— Noelle Crombie (@noellecrombie) May 2, 2023

controversial funding 

The various articles in the journalistic publication show that, last February, the former Secretary of State signed an agreement for the provision of consultancy services with an affiliate of the controversial La Mota. At issue are, as reported by Willamette Week, the large donations made by the owners of that company, both for Fagan's electoral campaign and for various other groups and political figures, linked above all to the Democratic party.

With the crackling of the varnish, the various beneficiaries of the donations quickly rushed to ensure that they donated the amounts received to non-governmental associations and/or for other philanthropic purposes, thus seeking to distance themselves from the couple Cazares and Mitchell (founders of the cannabis La Mota).

Rosa Cazares, 34, and her partner Aaron Mitchell, 45, are both recognized figures in both the state of Oregon and the industry. His company, La Mota, is the second most important in the state, with its own cannabis cultivation, production of extracts and vaporizers, and 32 branded dispensaries spread across the state.

Revealed incompatibilities

Oregon ethics laws allow government officials to accept outside contracts, provided they do not use their position, public resources, or insider knowledge gained on the job to assist in their outside work. However, as Secretary of State, Fagan has corporate and election oversight responsibilities. While the contract states that their consulting work will take place outside their state, Mitchell and Cazares hold more than 50 licenses assigned by the Oregon Marijuana and Alcohol Control Panel (OLCC).

Speaking to Sophie Peel, policy spokesman Ben Morris stated that “Secretary Fagan declined to participate in the OLCC audit on Feb. 15 because she had plans to enter into a limited consulting contract with Veriede Holding LLC ( an affiliate of La Mota)”. Despite saying that the “contract with [Veriede] started on February 20, 2023 and that it is for projects outside of Oregon”, the spokesperson did not provide a copy of the contract or the amount that will be paid to the former. Secretary. Sophie Peel also writes that Fagan did not immediately respond to questions sent by email in which he questioned her about that contract. But the journalist's insistence finally resulted in the public statement that led to her resignation.

In an email sent to his subordinates on the 15th of February, Fagan informed that “I would soon be consulting for a company involved in the cannabis industry in several states”, adding: “I do not believe that there is a real conflict, since any necessary action would be taken by the Legislature or the OLCC and any benefit could flow to all cannabis companies in Oregon, not just this specific company.”

Huge support, lawsuits and debts to finance

In recent years, the Oregon Department of Revenue, the body responsible for receiving taxes on income that revert directly to that state's coffers, has issued liens in excess of $1,5 million against the couple Cazares and Mitchell, as well as companies that they control, for non-payment of fees, including over half a million direct taxes on cannabis sales dating back to 2016.

However, the couple accumulates lawsuits in court. As Willamette Week reports, “In all, Cazares, Mitchell and various La Mota entities have faced 30 lawsuits filed in Oregon circuit courts since 2017, which in total claim more than $1,7 million in unpaid utility bills. of cannabis, employees, labs and even an accounting firm hired to complete the filing of 2021 tax returns for all [La Mota] branches.”

Despite the threat of a lawsuit against the newspaper by a lawyer representing La Mota, the newspaper did not stop investigate the case. The lawyer accused the media of asking “inflammatory” questions that were already having a negative impact on her clients and that “Ms Cazares, a first generation woman of color born in America, felt attacked, this being the second story published [in WW] about La Mota since the beginning of 2023”.

Taking into account the irregularities pointed out to the company founded by Cazares and Mitchel, the case promises to be talked about, setting a precedent for the analysis of relations between the cannabis industry and political powers.