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It is highly unusual for Oregon statewide elected officials to moonlight, not only because doing so raises difficult ethical questions, but also because their day jobs can be all-consuming. That makes Secretary of State Shemia Fagan’s decision to take a consulting contract with the troubled cannabis company La Mota all the more perplexing.
“It’s not common for top elected officials to be moonlighting for firms, especially a firm that they have a hand in regulating,” says Chris Koski, professor of political science and environmental studies at Reed College. Koski says he’s never seen anything quite like this from a top Oregon elected. “It’s unusual.”
Since taking office in 2021, Fagan, 41, has had her hands full. As the state’s top elections official, she has presided during a time of heightened scrutiny of ballot integrity, following the hotly contested 2020 presidential contest.
She’s had to make some tough calls, such as her decision—upheld by the Oregon Supreme Court—that the journalist Nicholas Kristof did not meet Oregon’s residency requirements to run for governor last year.
Fagan has also overseen numerous state audits and her agency’s Corporation Division, which registers companies that do business in Oregon. And because Oregon is just one of five states that do not have lieutenant governors, she is a heartbeat or resignation away from being Oregon’s next governor. (Then-Secretary of State Kate Brown became governor in February 2015 due to the resignation of her predecessor, Gov. John Kitzhaber, following the succession procedure outlined in the Oregon Constitution.)
So why might she have taken on a consulting contract with La Mota, whose owners drove around in Mercedes Benzes and Ferraris and lived in a West Hills mansion where they threw political fundraisers for Fagan and other top Democrats?
Court records show that when Fagan ran for secretary of state in 2020, her personal financial situation was dire.
In a March 13, 2020, filing in Clackamas County Circuit Court related to her divorce there, Fagan disclosed income of $5,550 a month from her work as a state senator and employment lawyer.
But the mother of two was spending more than that, she reported: $5,889 a month. (She paid $1,974 a month in rent alone). At the time, she was locked in a three-way race for the Democratic nomination for secretary of state with then-Sen. Mark Hass (D-Beaverton) and the lawyer and consultant Jamie McLeod-Skinner, leaving little time to practice law.
Details of her situation suggest conditions would continue to be difficult, even when she got a slight raise in January 2021 to the secretary of state’s salary of $77,000.
Fagan wasn’t always strapped for cash. After two terms in the Oregon House, she briefly left politics after the 2016 short session and saw her income rise. A filing by her husband in the divorce case says Fagan earned $151,832 in 2016 and $226,367 in 2017.
But she soon returned to politics, toppling incumbent state Sen. Rod Monroe (D-Portland) in 2018.
And in March 2020, Fagan reported she was carrying credit card debt of $67,000; student loan debt of nearly $37,000; a personal loan of $16,000; and she owed her divorce lawyer $4,500. Payments on those loans contributed to her monthly expenses exceeding her income.
It is unclear how Fagan’s finances have changed since then, although her modest salary (only three states pay their secretaries of state less) makes it unlikely her situation has gotten much brighter.
Fagan has been unwilling to answer questions about her contract with the La Mota affiliate Veriede Holding LLC. However, in an April 28 statement, she defended her decision to moonlight for La Mota, saying she believed it met all applicable legal and ethical standards.
“I do non-legal consulting work gathering information and resources on the cannabis industry outside of Oregon,” Fagan said. “The company contracted with me and others to review the landscape for expanding their operations outside of Oregon.”
She also denied that her outside work detracted from her day job: “The time needed is minimal,” Fagan said. “And I prioritize my public service.”