EXCLUSIVE: OR Sec State Fagan's crypto donation probe team scrambled to placate Democratic Party of Oregon

Internal documents obtained exclusively by the Oregon Roundup cap off a no good, very bad week for Fagan.

Oregon Secretary of State Shemia Fagan’s (Dem) office last week produced to Oregon Roundup a trove of documents related to that office’s investigation into a $500,000 donation made to the Democratic Party of Oregon (DPO) in the name of former FTX executive Nishad Singh. This article is the second in a three-part series focusing on new information contained in the produced documents. Part I, “Fagan’s stalled, conflicted investigation into record-breaking Democrat donation,” revealed not-previously-public documents showing the Secretary of State’s office believed the investigation would conclude in January 2023.

Fagan’s investigation into potential criminal charges against Singh or DPO began November 1, 2022. Nearly six months later, the Oregon public knows little about the status of the investigation.

It’s been a tough week for Oregon Secretary of State Shemia Fagan.

“DPO is very concerned.”

The afternoon of January 4, the Portland, Oregon weekly Willamette Week broke the story that Oregon Secretary of State Shemia Fagan, a Democrat, intended to fine the Democratic Party of Oregon $35,000 for a late campaign finance filing related to the largest donation ever received by the DPO, $500,000 received in October 2022 from Nishad Singh, at the time an executive for now-bankrupt cryptocurrency firm FTX.

The proposed fine was not a surprise to those familiar with Oregon’s campaign finance laws. Political action committees are required to report all donations and expenditures to the Secretary of State’s ORESTAR online system within a set period of time. In the days leading up to the election, the reporting deadline is seven days after the donation is received or the expenditure made.

If a PAC incorrectly reports, say, the source of a donation prior to the deadline, and amends the filing to show the actual source of the donation after the deadline, that counts as a late filing. The result is a fine assessed by the Secretary of State against the PAC, with the amount of the fine determined by the size of the donation that was not timely reported and how late the filing was. Such fines are not uncommon, particularly in the waning weeks of a campaign when even fastidious PACs can find it difficult to keep up with reporting requirements.

It was imminently foreseeable that Fagan’s office would fine the DPO for its late amendment of the source of the $500,000 donation. The DPO’s original filing claimed the donation came from Prime Trust LLC, a Nevada company that provides financial services to crypto currency firms. When the DPO amended its filing, nearly a month after it received the donation and under pressure from Oregon media outlets, to show then-FTX executive Nishad Singh as the donor, the DPO admitted its initial filing was inaccurate. (The DPO contests the fine, claiming it was deceived by the donor).

Yet as news broke of the proposed fine on January 4, the DPO let the Secretary of State’s leadership know it was not happy with the development. Online internal chat records of that day received exclusively by the Oregon Roundup show the Secretary of State staff, including the investigator personally conducting the office’s ongoing investigation into potential criminal charges related to the donation, her supervisor (and former DPO employee), the office spokesman, and Fagan’s legal counsel, scrambling to reassure the subject of their investigation.

Source for this and all following images: Oregon Secretary of State public records production

P.K. Runkles is Chief Legal and Risk Counsel for the Oregon Secretary of State. Molly Woon is the director of the Secretary of State’s Elections Division, and former deputy director of the DPO. Woon’s division is responsible for assessing the civil fine against the DPO, as well as the ongoing investigation into potential criminal charges related to the donation. In the excerpt above, Runkles and Woon engage in an urgent (“Important!”) late night (11:23 pm) airing of DPO’s displeasure at the news of the fine, which displeasure had somehow been communicated to Runkles.

The blacked out portions were redacted by the Fagan’s office prior to production to the Oregon Roundup.

At 6:31 am January 5, Alma Whalen, the investigator in the Secretary of State’s office responsible for the DPO investigation, chimed in to clarify that the fine related to the civil proceeding against the DPO, not the ongoing criminal investigation:

Runkles, Woon and Whalen made plans to discuss the DPO concerns later that morning:

Woon asked Whalen whether the DPO had been given advance notice of the proposed fine. The following messages, perhaps Whalen’s response, were redacted:

Ben Morris, the office’s spokesman, told the chat group that Willamette Week had edited its story to clarify that the fine was separate from the criminal inquiry. Runkles reminded the group of the pressing matter that initiated the chat:

Much of the remainder of the exchange is redacted. Whether the DPO received notice is unclear. The entirety of the chat produced to the Oregon Roundup can be found here.

The chat exchange between Runkles, Woon, Whalen and Morris, shows an investigative team receiving what appears to have been back channel communications from the entity it purports to investigate. The investigation team scrambled to respond to the DPO’s concerns about media coverage of the proposed fine and whether it received advance notice of the fine. It advocated for and received changes to the media coverage in response to the DPO’s concerns.

The chat exchange puts in black and white the reality of the Oregon Secretary of State’s conflict of interest investigating the Democratic Party of Oregon. Fagan has received over $400,000 in campaign donations from the DPO in her prior campaigns. She has announced that she is running for re-election, and would benefit from additional funding from the DPO in that effort.

Fagan’s decision to appoint Molly Woon, who less than two years ago was the deputy director of the DPO, to oversee the investigation into her former employer, magnified Fagan’s conflict and brought it into the inner workings of the investigation itself. And now we know that those inner workings are influenced directly and immediately by the concerns of the DPO.

The Oregon Secretary of State’s investigation into possible criminality associated with the DPO misreporting the largest donation it has ever received is nothing short of a sham. That investigation should be referred from the Secretary of State’s office and the Department of Justice (which suffers from similar conflicts) to Marion County District Attorney Paige Clarkson.

I argue in more detail here why that is the best lawful way to salvage a fair investigation from the wreckage wrought by the Shemia Fagan and her office.

Fagan’s other conflict of interest

Willamette Week’s Sophie Peel yesterday dropped the bombshell story that Oregon Secretary of State Shemia Fagan took on private consulting work for alleged tax-evading cannabis business La Mota. La Mota and its owners have been big campaign donors to Fagan, Oregon Governor Tina Kotek and other Democrat powers-that-be. Fagan says she recused herself from her office’s audit of the Oregon Liquor and Cannabis Commission’s regulation of cannabis in the state on account of the conflict of interest posed by the consulting job.

Given the DPO donation saga, it is not surprising that Fagan would enter into personal and political financial arrangements that call into question her ability to do her full-time job of Secretary of State fairly. What is surprising, in that context, is that she chose to recuse herself from the cannabis audit, in recognition of that conflict.

A similar conflict applies to Fagan’s office in relation to its DPO investigation. That she and her office continue to pretend they are neutrals in that investigation, in light of everything we now know, is an outrage.

Oregonians should not stand for it.