KOIN.com

Lawyers: Ethical questions swirl as Fagan emails reveal possible public records violations

PORTLAND, Ore. (KOIN) — Yet another twist in the controversy surrounding Oregon Secretary of State Shemia Fagan and cannabis company La Mota has come to light.

The Oregon Secretary of State’s office confirms that based on emails between Fagan and the La Mota CEO Rosa Cazares, it appears as though Fagan shared her draft of the audit plan on the cannabis industry with Cazares for feedback in January 2021 — but not through her government email account.

However, emails KOIN 6 News requested between Cazares and Fagan’s government email account do show several recommended changes Cazares made about the audit plan.

Emails between Secretary of State Shemia Fagan and La Mota CEO Rosa Cazares. (Courtesy of Oregon Secretary of State’s Office)

To be clear, the audit plan isn’t the audit — but rather the instructions from the secretary to the auditors about the title and scope of the audit they will perform. After the secretary approves her audit plan, the Oregon Audits Division independently conducts the actual audit.

The audit documents show the secretary included an updated summary and title of the Oregon Liquor and Cannabis Commission audit on her audit plan, which included Cazares’ recommended language.

The secretary’s office tells KOIN 6 no agency staff or officials were aware that Fagan had reached out for input from Cazares. 

The final title of the audit, however, is much different than what Cazares recommended and Fagan suggested to her staff. The SOS’s office says that’s because they did their own independent interviews and research.

The office states even though they didn’t know about Fagan’s behind-the-scenes conversations with the cannabis company, they stand by their findings. 

“The Audits Division conducted their work with high standards and professionalism,” said Ben Morris of the Secretary of State’s Office. “Every conclusion, finding and recommendation in the audit is backed by evidence.”

In a press release on Friday, Oregon Audits Division Director Kip Memmott echoed that sentiment — encouraging Oregonians to read the full audit and see for themselves.

“Regrettably, Secretary Fagan’s actions may have harmed your trust in Oregon’s Audits Division. But the truth is that from the origin of the idea to audit cannabis up until its release last week, there was nothing improper by the division with how this audit was conducted. We followed auditing standards and procedures every step of the way, as we always do,” Memmott said. “Our hope is that by doing more to highlight and clarify how we do our audit work, the people of Oregon will see the professionalism, independence and integrity their auditors bring to this work every single day.”

KOIN 6 reached out to lawyers at Tonkin Torp for a legal perspective on this development. They tell us that in their opinion, it appears to be a public records violation by supplying a draft of the audit plan outside of official state communication channels. 

The lawyers added it’s not necessarily inappropriate for secretaries to seek input from members of the industry — as long as they disclose it to their staff. But again, according to the SOS’s office, Fagan failed to do so.

Therefore, the lawyers we spoke to believe there are ethical questions for Fagan.

Those questions revolve around her failure to disclose that she was making recommendations for the audit plan after contacting Cazares.

KOIN will continue to follow the ethics investigation into Fagan and will provide any new developments.