Dissecting the Fagan farce

The disgraced former Sec State is poised to escape legal accountability by paying a $1,600 fine

Shemia Fagan, then Oregon Secretary of State (photo courtesy Oregon Secretary of State)

To grasp the extent to which Oregon’s ever-ruling Democrats condone bad acts by one of their own requires patience. This is how it usually goes: (1) the public becomes aware of the bad act; (2) there is a flurry of dramatic-sounding pronouncements of remediation from one or more higher-ranking Democrats who might plausibly be expected to enforce rules against bad acts; then, after a long pause, (3) the bad actor escapes from the web of potential enforcement authorities and processes with little to no punishment.

We find ourselves in step (3) in the case of former Secretary of State Shemia Fagan. Two years ago today, Fagan had announced but not yet effectuated her resignation following reporting by Willamette Week she had taken a $10,000-per-month consulting job with an affiliate of cannabis company La Mota while serving as Secretary of State while that office conducted an audit highlighting the purported excessive zeal of the Oregon Liquor and Cannabis Commission’s enforcement of cannabis industry regulations against companies like La Mota.

Fagan’s foibles earned national headlines as she first denied wrongdoing, then resisted producing a copy of the consulting contract, then tried to “solve” the problem by resigning from her job with Veriede Holding LLC, owned by La Mota’s cofounders Rosa Cazares and Aaron Mitchell, and then, finally, resigned under extreme public pressure, including from her fellow Democrats.

The U.S. Department of Justice launched a criminal investigation into La Mota and Fagan, and the company and the elected official became as close to pariahs as possible for Democrat-aligned Oregonians. Back then, it seemed possible the Fagan matter would avoid the well-worn Oregon threat-elimination three-step. Her scandal was too blatant, too well-publicized, too inviting of public scorn by fellow Democrats and too involved in a federal investigation to be swept under the rug.

And yet, here we are, one perfunctory May 9 vote by the Oregon Government Ethics Commission away from Fagan walking from each and every enforcement effort against her, having paid a grand total of $1,600 in fines, or about five days of work for La Mota under her old arrangement.

Those searching for a merciful limit to Oregon Democrats’ cynicism in refusing to police their own remain frustrated.

How did we get here? Let’s take a stroll through the various enforcement authorities that have taken a pass on holding Fagan accountable.

The Oregon Government Ethics Commission

This is the newsiest part, so let’s start here. The Oregon Government Ethics Commission (OGEC), which is supposed to enforce the state’s ethics laws, has reinitiated its work on three ethics complaints Oregonians filed against Fagan in the depths of her self-imposed public crisis.

OGEC wasted little time since restarting its work last December striking a deal with Fagan, under which Fagan would pay a $1,600 fine and update some old financial reports on which she lied about her non-government sources of income, in exchange for OGEC dismissing the complaints.

The Stipulated Final Order, beginning on page 39 of the OGEC’s May 9 meeting agenda, is something to behold. Its treatment of the Vieriede arrangement focuses on Fagan’s possible violation of two Oregon ethics laws: (1) the law governing conflicts of interest for public officials; and (2) the law prohibiting public officials from using their state position to make money for themselves from outside sources.

The Order explains Cazares first verbally offered a consulting gig to Fagan during a “personal social outing” January 12, 2023. In apparent preparation for the new job, on February 15, Fagan told staff she was recusing herself from the nearly completed audit into OLCC’s regulation of the cannabis industry.

When planning the audit back in 2021, Fagan had shared a scoping document for the audit with Cazares, and Cazares suggested edits that were incorporated into the scope of the audit.

When, two years later, Fagan recused herself from the audit the scope of which had already been modified by Cazares, she left the audit in the hands of her deputy, Cheryl Myers, who relied upon Fagan’s approval for her continued employment.

Oregon’s conflict of interest laws required Fagan, when faced with the conflict of interest presented by her job with Veriede, was required to disclose publicly the conflict of interest. She did not disclose the conflict, or her recusal from the audit until the scandal broke later in 2023. Nonetheless, the Stipulated Final Order absolves Fagan of liability on the grounds that she took no formal action on the audit after signing the consulting agreement. She did, of course, take the formal action of at least recusing herself from the audit after receiving the verbal offer from Cazares, but before Fagan herself reduced it to writing.

The Stipulated Final Order does conclude Fagan used her position as Secretary of State to obtain the consulting job with Veriede. OGEC can assess fines of up to $10,000 against a public official who does that, but its staff is willing to settle the matter for $1,600.

The Stipulated Final Order will go into effect if the OGEC votes to approve it this Friday. The OGEC is made up of nine members, five of whom are appointed by Democrats and four by Republicans.

The United States Department of Justice

The U.S. Attorney for Oregon launched a criminal investigation into the Fagan matter Spring 2023 shortly after Fagan’s resignation as Secretary of State. The probe was dropped by the Biden Administration in December 2024, the month between the election and the departure of the administration, without announcement or explanation either by US DOJ or OGEC, which had publicly announced back in 2023 it was delaying its investigation into three ethics complaints against Fagan on account of the federal probe.

It was only the reporting of Willamette Week’s Sophie Peel, who has broken most of the news about the Fagan scandal from day one, that informed the Oregon public on April 21 the feds had dropped, and OGEC had restarted, their respective investigations months earlier.

The federal criminal law at issue in the U.S. Attorney’s investigation of Fagan may have been 18 USC Sec. 666(a)(1)(B), which prohibits a state public official from accepting “anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction or series of transactions[.]” That’s the statute under which U.S. DOJ charged local officials in California recently for accepting money in exchange for granting highly lucrative cannabis retail permits.

It’s possible Veriede Holding hired Fagan for a position for which she was not particularly well qualified because she was personal friends with La Mota and Veriede co-founder Rosa Cazares. Or, it could be the hiring was part of a comprehensive and blatant attempt to influence Oregon elected Democrats to benefit La Mota’s cannabis business.

The investigation was dropped in the waning days of the Biden Administration, which had no political reason to hand an ongoing probe into Oregon Democrats, which could reach fellow La Mota allies and campaign donees Governor Tina Kotek and U.S. Representative Val Hoyle, to the incoming Trump Administration.

As I argued recently, the Trump Administration should review the dismissal to determine whether the evidence turned up so far justifies restarting it.

Oregon District Attorneys

It is a misdemeanor in Oregon (ORS 162.025) for a public official to receive money from someone when the purpose of the exchange is to inlfuence the public official’s actions in her public capacity. It strains credulity to believe the Fagan line that Veriede hired her because she was a (then unlicensed) lawyer and thus able to help Veriede’s goal of expanding into other states.

If a district attorney in Oregon believed, instead, the consulting job was but one part of Cazares and Mitchell’s wide-ranging attempt to steer cannabis regulations in a more lenient direction by literally employing an up-and-coming young Democrat, he or she could file criminal charges against Fagan, Cazares, Mitchell, Veriede and La Mota.

No such charges have been filed.

The Oregon State Bar

The Oregonian reported the Oregon State Bar has reinstated Fagan’s license to practice law, which she had allowed to lapse upon becoming Secretary of State. Fagan applied to have her license reinstated shortly days after she signed the Veriede consulting contract in February 2023. The ethics rules governing licensed attorneys require honesty and moral fitness. Nonetheless, the Bar reinstated Fagan.

The Bar is, according to The Oregonian, reviewing three pending ethics complaints against her, so may yet take action against her. But, for now, she’s a licensed Oregon attorney.

What it means

Shemia Fagan is poised to escape Oregon and federal authorities’ enforcement efforts, such as they’ve been, with paying a $1,600 fine and facing three pending bar complaints. This outcome would have been unthinkable two years ago, but that’s kind of the point.

Oregonians who believe Democrats can do anything they please and get away with it are being vindicated, yet again.