Secretary of State Shemia Fagan resigns amid moonlighting scandal

By PETER WONG and GARY A. WARNER
Oregon Capital Bureau

Oregon Secretary of State Shemia Fagan has resigned effective May 8, a major turn in a moonlighting scandal that broke out just last week.

Fagan issued an announcement that she will leave office next week, with her staff reporting to deputy Cheryl Myers on an interim basis.

“There will be no immediate changes,” said Ben Morris, the communications director for the Secretary of State.

Fagan swiftly moved from assertions late last week that she didn’t believe a $10,000-per month consulting contract with cannabis dispensary company La Mota would affect her ability to do her job to an apology on Monday and resignation on Tuesday.

The move came amid additional fallout directed at her over an audit by her office last week of regulatory issues of the legal cannabis business that called for looser rules. 

She has served slightly more than two years of a four-year term.

Willamette Week broke the story last week that Fagan has been moonlighting for a company run by Democratic donors. On Friday, Gov. Tina Kotek, House Speaker Dan Rayfield and Senate President Rob Wagner all issued statements expressing concern about Fagan’s work with the cannabis company. Republican leaders called for Fagan to resign.

On Saturday, Kotek called for an ethics investigation.

And on Monday, Fagan apologized. “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,” Fagan said in a statement.

Gov. Tina Kotek will appoint a successor, who will serve through the 2024 election. Deputy Secretary of State Cheryl Myers will fill in until Kotek makes an appointment.

While Fagan was the next in line to succeed Kotek, should she leave office before her term is out, her replacement will not. That duty now falls to state Treasurer Tobias Read, whose second term ends in 2024.

Kotek was quick to react to the news.

“This morning, Secretary Fagan informed me of her decision to resign,” Kotek wrote in a press release. “I support this decision. 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.”

By noon Tuesday, Speaker of the House Dan Rayfield, Senate President Rob Wagner, House Majority Leader Julie Fahey, and Senate Majority Leader Kete Lieber issue the following statement:

“As elected leaders, we know that our work depends solely on our ability to hold the trust of the people we serve and represent,” they wrote. “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. Her decision to resign will allow the state to move on and rebuild trust.”

Senate Minority Leader Tim Knopp, R-Bend, said in a text message:

“The right thing to do.

“Treasurer Tobias Read and former State Senator Mark Hass would be good appointments that could return integrity to the SOS office.”

What happens next

Under state law, Kotek must name a Democrat as an interim successor. Oregon does not conduct special elections to fill state vacancies.

The secretary of state is Oregon’s chief elections officer — though elections are conducted by officials in Oregon’s 36 counties — and oversees audits, archives and public records, and business registration and small-business assistance.

Also, of 10 predecessors excluding two short-term appointees, four secretaries became governor later, and four others sought that job.

Fagan, now 41, was a lawyer when she was elected in 2012 to the first of two terms in the Oregon House from a district straddling Multnomah and Clackamas counties. She left in 2016, but returned two years later, when she unseated Democratic Sen. Rod Monroe, an opponent of rent control legislation. The Legislature approved a cap on annual rent increases in 2019.

Fagan jumped into the race for the open secretary of state position in 2020 after Jennifer Williamson, a former majority leader of the Oregon House backed by public employee unions, bowed out before the primary. Fagan won the nomination narrowly over state Sen. Mark Hass of Beaverton and Jamie McLeod-Skinner, who had been the party nominee for the 2nd District congressional seat in 2018.

Since Kate Brown became governor after the 2015 resignation of John Kitzhaber, who was 38 days into a fourth term, Oregon has had four secretaries of state.

Brown named Democrat Jeanne Atkins, who pledged not to seek a full term in 2016. Republican Dennis Richardson, a former state representative from Central Point and the party’s 2014 against Kitzhaber, was elected. Richardson died of cancer in February 2019. Brown then appointed Republican Bev Clarno of Redmond, a former House speaker and Senate Republican leader, who chose not to seek a full term in 2020. Fagan then won an open contest.