Kotek Has Broad Discretion in Appointing Fagan’s Successor
Embattled Secretary of State Shemia Fagan will resign effective May 8 following a cascading controversy over her side gig for a troubled cannabis company and just before May 16 elections her office oversees.
Following revelations reported by Willamette Week, Fagan admitted she worked as a consultant for a cannabis company in arrears for taxes and to vendors. She defended her side job as within state ethics limits, even though Fagan was overseeing an audit of state cannabis regulations. She recused herself from the audit, but only after its near completion.
In a press conference earlier this week, Fagan said she resigned her $10,000 per month side job that started in February, apologized for breaking public trust and complained her day job only pays $77,000 per year.
Defending her decision to accept outside work, Fagan said she made $105,000 as a starting attorney. “Fourteen years later, I’m starting over financially after a divorce,” Fagan explained. “I have two young kids. I have student loans and other bills. I’m a renter in the expensive Portland metro area, and I’m a sole income earner in my household. So to put it bluntly, my Secretary of State salary alone is not enough for me to make ends meet.”
Fagan’s breach of trust became too wide for her to bridge.
Fagan’s decision to resign came after she talked with Governor Kotek, who called for an ethics investigation. The Oregon Government Ethics Commission already has two complaints relating to Fagan. The legislature’s four top Democrats — House Speaker Dan Rayfield, House Majority Leader Julie Fahey, Senate President Rob Wagner and Senate Majority Leader Kate Lieber — also said in a joint statement Fagan’s breach of trust “became too wide for her to bridge.”
Deputy Secretary of State Cheryl Myers will oversee the agency until Kotek selects a replacement. Kotek, who spoke with Fagan last week, agreed with her decision to resign. “It is essential that Oregonians have trust in their government,” Kotek said. “I believe this is a first step in restoring that trust.”
Fagan’s resignation caps a whirlwind political rise, backed by her support from three large public employee unions that enabled her to win the secretary of state job. Her successful campaign also was aided by Rosa Cazares and Aaron Mitchell, owners of the La Mota chain of cannabis dispensaries. The pair donated $45,000 to her 2020 campaign, despite owing vendors and back taxes.
Fagan’s consultancy was to assist LaMota gain operating licenses in other states. Her work for La Mota made her aware of regulations cannabis companies would like revised or dropped. Fagan admitted discussing marijuana regulation with at least one high-level out-of-state official.
Before agreeing to work for La Mota, Fagan took a part-time teaching job at the Willamette University Law School.
The sudden resignation by Fagan leaves an open field for Kotek to consider as her replacement. She has wide discretion on who to appoint. Whoever is appointed will fill the office until voters choose a secretary of state in the 2024 general election. The appointed secretary of state won’t be next in line to succeed as governor. That role falls to the next in line, Treasurer Tobias Read.
Read could be a contender for the appointment, even though he ran unsuccessfully against Kotek in the 2022 Democratic gubernatorial primary. Read is serving his second term as Treasurer and cannot seek re-election because of term limits. He has expressed interest in the appointment. Another potential candidate could be former state Senator Mark Hass, who was Fagan’s most serious Democratic primary opponent. However, Hass was linked to Betsy Johnson’s unsuccessful gubernatorial bid as an independent. Retired long-time Senate President Peter Courtney volunteered to serve as an interim secretary of state.
Political insiders ruled out sitting Democratic state senators who have a thin 16-member majority after Senator Chris Gorsek has been sidelined most of the session following emergency heart surgery. There could be options in the Democratically controlled House with members Kotek worked with and trusted during her decade-long tenure as Speaker. Other names that popped up include Jessica Vega Pederson, Deborah Kafoury and Susheela Jaypal.
Secretary of State Appointments
Former Governor John Kitzhaber resigned in 2015 amid a scandal involving consulting work accepted by his fiancée, who also worked as an unpaid adviser in the governor’s office. Kate Brown was then secretary of state and succeeded Kitzhaber under Oregon’s constitutional succession law.
Brown appointed Jeanne Atkins to replace her as secretary of state, in what was viewed as a caretaker role. Dennis Richardson won the seat in the 2016 election, the first Republican to win statewide office in Oregon since Vic Atiyeh in 2002. Richardson died in office in 2019 of a rare form of brain cancer. Brown appointed former GOP lawmaker Bev Clarno to replace Richardson, again as a caretaker. Fagan captured the seat in the 2020 general election.