Murmurs: Kotek Knew of Fagan’s La Mota Work

KOTEK KNEW OF FAGAN’S LA MOTA WORK: In the wake of Shemia Fagan’s resignation as Oregon secretary of state due to a moonlighting scandal, one question in Salem has become: Who knew—and when? Records obtained by WW and first reported at wweek.com provide some answers. They show Fagan told staff about her contract with the embattled cannabis chain La Mota as early as Feb. 2. The topic came up again in a March 24 meeting, just five days before WW published its initial story on La Mota. Notes taken by Fagan’s deputy, Cheryl Myers, don’t describe the content of those conversations, but Myers wrote in the March 24 meeting notes: “La Mota/WW upcoming story re tax lien status.” Myers, who became interim secretary of state after Fagan’s May 9 departure, says she and other subordinates urged Fagan to cancel the contract in both meetings: “Our advice was ignored.” Gov. Tina Kotek’s office tells WW that Fagan told her April 19 that she’d accepted a contract with La Mota. “Secretary Fagan said she had a consulting contract with La Mota and assured the governor that she had done everything appropriately,” says Kotek spokeswoman Elisabeth Shepard. It’s not clear if Kotek offered any advice to Fagan at the time.

WASHINGTON CENTER FENTANYL MARKET BOARDED UP: Washington Center, the vacant building complex that was host to an open-air fentanyl market on one of downtown Portland’s most prominent blocks, has been boarded up completely. The eaves around the former KeyBank at the corner of Southwest 5th Avenue and Washington Street survived previous efforts to surround the building in 10-foot wooden walls—to the frustration of city officials and nearby businesses, which have long complained about the buying, selling and consumption of fentanyl that had come to define that stretch of downtown Portland. As of May 22, that corner too had been boarded up. Mayor Ted Wheeler hailed the recent development. “I’m grateful that the property owners are continuing to secure the site which is a commitment they made during the initial board-up of the Washington Center building,” Wheeler said in a statement to WW. “My expectation is for efforts to continue in the weeks ahead, which includes working to address loitering. I look forward to the demolition or resale of this property to allow downtown to move forward.” Unmentioned were agreements by the mayor’s staff last year to pay for the board-up, which went unfulfilled to the frustration of the buildings’ owners, the Menashes, one of Portland’s top real estate families.

LATE BLITZ BOOSTS ELECTION TURNOUT: Through May 15, the day before the May 16 election, the percentage of ballots returned stood at just 16.38%, an anemic total. It’s normal for the final day to see a flurry of ballots, but this year saw a far greater last-minute rush: 10.41% of voters turned in a ballot on election day. That’s about twice the percentage of voters who waited until the last day in the past two May off-year elections. (Ballots were mailed to voters nearly a week late, thanks to a printing error by the Multnomah County Elections Division.) And 2023 marked the first May off-year election in which ballots postmarked by, rather than received on, election day would be counted. So another 2.47% of ballots came in during the week after the election, bringing the final turnout to 29.26%, which is far larger than either of the past two May elections. “We were expecting 25% turnout and planning for 30%, so we had the resources in place to handle the late surge,” says county elections director Tim Scott. “It was still a bit surprising, though, since we hadn’t seen a 10% election day turnout increase in a special district election since May of 2017.” Voters elected Julia Brim-Edwards to the Multnomah County Board of Commissioners and Patte Sullivan to the Portland School Board, renewed the Portland Children’s Levy, and rejected a capital gains tax (see page 6).

PONZI SCHEME CHARGES LEAD TO CLASS ACTION LAWSUIT AGAINST BIG BANKS: A lawsuit filed May 15 in U.S. District Court in Portland is seeking to hold banks liable for their alleged participation in a $44 million crypto Ponzi scheme. Two men, including Portland-based Sam Ikkurty, were charged last year with soliciting investments on YouTube and, rather than investing the cash, using it to pay back other investors. Now, one of those investors, Amit Fatnani, has filed a class action lawsuit in federal court, alleging that six banks and financial companies, including JPMorgan Chase, were complicit for not recognizing obvious “red flags.” Fatnani lost $350,000 in the scheme. One of those red flags was a series of transactions in “large, round number, and often-repeated dollar amounts, a transfer pattern indicative of money-laundering activities,” the lawsuit alleges. “I look forward to presenting this case to a local jury late next summer,” Fatnani’s attorney Michael Fuller tells WW. Ikkurty has denied the allegations of misappropriating funds in legal filings. His attorney did not immediately respond to a request for comment.