Oregon secretary of state resigns over side job as marijuana company consultant

PORTLAND, Ore. -- Oregon Secretary of State Shemia Fagan resigned Tuesday less than a week after it came to light that she had taken a lucrative side job consulting for an embattled cannabis company at a time when her office was auditing the state’s marijuana program.

Fagan announced that her resignation will take effect on May 8, at which point Deputy Secretary of State Cheryl Meyers will take the lead until Gov. Tina Kotek appoints a new secretary of state to serve out the remainder of Fagan’s term which runs through January 2025.

Her resignation came a day after she released details of the $10,000 a month contract with Veriede Holdings, an affiliate of pot chain La Mota, and announced she had canceled the contract and apologized to Oregonians for undermining their trust.

In a statement, Fagan referenced an ethics investigation already underway into her contract with an affiliate of the troubled cannabis dispensary chain La Mota.

“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,” Fagain said. “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.”

Fagan, who was the second highest ranking public official in Oregon, is the second top state official to resign in the last decade after former Gov. John Kitzhaber stepped down in 2015 amid a growing influence-peddling scandal involving him and his fiancée, Cylvia Hayes.

Fagan, a former state lawmaker and lawyer, was elected as secretary of state in 2020. She made $77,000 annually as secretary of state and cited her low pay and family demands Monday as painful pressure points that prompted her to take the outside gig.

Kotek said in a statement issued immediately after Fagan’s resignation announcement that she supported the secretary of state’s decision, which Fagan informed Kotek of on Tuesday morning.

“I support this decision,” Kotek said. “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.”

Hours before Fagan’s resignation was made public, political insiders were lining up her potential successors. Among those under consideration: Sen. Kate Lieber, D- Beaverton, and Rep. Janelle Bynum, D- Happy Valley.

Lieber could not be reached for comment; Bynum confirmed she had been approached but declined to elaborate.

Fagan’s position had very quickly grown tenuous, as her chief of staff resigned and former secretaries of state called for her to resign over Fagan’s decision earlier this year to quietly take the high-paid marijuana consulting contract.

“I appreciate that ( Shemia Fagan) has recognized the mistake,” said former Secretary of State Jeanne Atkins, who like Fagan is a Democrat. However, Atkins said that “the damage to the office and the public perception particularly at this moment in history is very concerning.”

Emily McLain, Fagan’s chief of staff, confirmed via text on Tuesday that she had resigned in writing on Monday, effective no later than June 30, 2023. McLain said she was reserving the right to leave her post earlier, but that she wanted to be available to support the Secretary of State’s staff during next week’s election and its aftermath, as well as through the end of the legislative session.

After Fagan announced her resignation, former Gov. Kate Brown, a Democrat who was vaulted from secretary of state to the governor’s office after Kitzhaber resigned, said that Fagan made the right decision.

“The Secretary of the State’s office functions well only when Oregonians have complete faith and trust in the actions of who they chose to hold the office,” Brown said in a statement. “To achieve this, the secretary must be beyond reproach, lead with integrity, and be as transparent as possible. Unfortunately, Secretary Fagan has failed Oregonians’ trust.”

Brown said that Kotek should pick a secretary of state appointee who will not seek election to the job in 2024 and instead focus on running Oregon’s elections smoothly during the presidential election cycle. After Brown became governor upon Kitzhaber’s resignation, she appointed Jeanne Atkins as secretary of state and Atkins pledged not to seek election. “This will be the most consequential election of modern history and any appointee must be solely focused on restoring Americans’ faith in our electoral system and not on their own election to the secretary’s office,” Brown said.

Democratic leaders in the Oregon Legislature said in a statement Tuesday that Fagan’s “decision to resign will allow the state to move on and rebuild trust.”

“As elected leaders, we know that our work depends solely on our ability to hold the trust of the people we serve and represent,” said Senate President Rob Wagner, Senate Majority Leader Kate Lieber, House Speaker Dan Rayfield and House Majority Leader Julie Fahey. “Secretary of State Fagan’s severe lapses of judgment eroded trust with the people of Oregon, including legislators who depend on the work of the Audits Division for vital information on public policy. This breach of trust became too wide for her to bridge.

Deputy Secretary of State Cheryl Meyers said in a press release Tuesday that the Secretary of State’s office “is a resilient agency, with strong division leadership and internal systems that can withstand change. We are ready to continue the important work of the Secretary of State’s office during this transition.”

“This is an unfortunate situation, but a change of leadership will allow agency staff to continue their good work with less distraction moving forward,” Meyers said.

Reporters Shane Dixon Kavanaugh, Julia Silverman and Noelle Crombie contributed to this report.