PORTLAND, Ore. (KOIN) – Oregon Secretary of State Shemia Fagan announced she ended her paid consulting contract with Veriede Holdings LLC on Sunday after raising concerns about a potential conflict of interest and a call from the governor for an investigation of the secretary’s recusal from a state audit on the cannabis industry.
Veriede Holdings LLC is an affiliate of the cannabis company La Mota, whose owners — as Fagan points out — have made campaign contributions to the secretary.
“Today I am announcing that I have terminated my contract with Veriede Holdings, LLC,” Fagan said in a statement. “I owe the people of Oregon an apology. 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. I am sorry for harming the trust that I’ve worked so hard to build with you over the last few years, and I will spend the next two years working hard to rebuild it.”
During a press conference on Monday morning, Fagan said she spent 15 hours a week working for La Mota and also works at Willamette University Law School teaching a class for four hours a week. With a base salary of $77,000 as Secretary of State, Fagan said she could not make ends meet as a single mother of two.
WATCH: Secretary of State Shemia Fagan’s full press conference
“To put it bluntly, my Secretary of State salary alone is not enough for me to make ends meet. That doesn’t change the fact that for many Oregonians, they make less than that,” Fagan said. “This is my financial reality and that’s why I followed Oregon Government Ethics guidelines and began earning supplemental income in my free time.”
She added, “I’m deeply honored to serve as Oregon’s Secretary of State regardless of compensation.”
Fagan says in 2020, she met the owners of La Mota — Aaron Mitchell and Rosa Cazares — and says the couple later donated $45,000 to her campaign.
A recent KOIN 6 News investigation has also found that La Mota owns a squatter house in Portland and — as reported by Willamette Week — the company has millions of dollars in state and federal tax liens, lengthy litigation for numerous unpaid bills.
When asked about these concerns during her press conference, Fagan responded, “I’m here today to own my mistakes. It was poor judgment for me to engage in a contract with a company that was regulated by an agency that I was auditing. And that’s my mistake and that’s nobody’s fault but mine. And that’s what I’m here to do, is to own that mistake. The reporting that has been happening, I learned about it the same time that all of you did. I didn’t know about any of that when I took that contract.”
Before signing the consulting contract, Fagan said she met with the state ethics commission three times.
“Through our conversations, I concluded that there was no conflict for really two key reasons. Number one, any direct action taken as a result of the audit would be taken by the governor, or the legislature or the OLCC, not my agency,” Fagan said. “And two, because the class of businesses potentially affected by any regulation changes was so large that me contracting with one cannabis company did not create any conflict under the law.”
Documents signed in late February show La Mota was paying Fagan $10,000 a month with the opportunity to earn $30,000 in bonuses. That’s when Fagan recused herself from an audit on the cannabis industry that was already near completion.
During Monday’s press conference, Fagan said she will be donating her Political Action Committee funds to the Oregon Humane Society.
After the secretary voluntarily recused herself from the audit, Gov. Kotek called for an investigation into the recusal and the audit.
“It’s critical that Oregonians trust their government. That is why I am urging the Oregon Government Ethics Commission to immediately investigate this situation. Additionally, I am requesting that the Oregon Department of Justice examine the Secretary of State’s recently released audit of the Oregon Liquor and Cannabis Commission (OLCC) and its cannabis program,” Kotek said.
The Oregon Government Ethics Commission and the Department of Justice are now investigating.
While Kotek expressed her disappointment with Fagan’s relationship with the cannabis company, Kotek has also accepted $63,000 in campaign donations from the couple, their company, and their PAC’s. KOIN 6 News has reached out to Kotek asking about the contributions but has not heard back.
In a written statement, Fagan previously reiterated that she had not broken ethics laws and that she welcomes the investigation, as first reported by Willamette Week.
“I diligently followed the Oregon Government Ethics Commission’s published guidelines for private employment of public officials, the same exact ethics rules I’ve followed for a decade, since I became a legislator in 2013. I look forward to the findings of the Oregon Government Ethics Commission because they will confirm that I followed Oregon ethics rules and laws. I am also eager for the Department of Justice’s review of the OLCC audit because the review will verify that hard-working auditors in the Oregon Audits Division conducted their work with independence and integrity,” Fagan said.
In Monday’s statement, first obtained by Willamette Week, Fagan emphasized that she wants to rebuild Oregonians’ trust.
“My mission as Secretary of State continues to be to build trust. The first step to building trust is admitting that I broke it. I’ll spend the next two years rebuilding your trust in me and that starts today with releasing the contract that will be reviewed by the Government Ethics Commission.”
Fagan’s press conference can be viewed in the video player below.