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Disgraced former Secretary of State Shemia Fagan took a big step May 9 in getting out from under the scandal that flattened her promising political career in May 2023.
Fagan agreed to settle three cases with the Oregon Government Ethics Commission, which determined she had violated a number of state ethics rules stemming from her time in office, including using her public position for private gain by signing a $10,000-a-month consulting contract with the troubled cannabis company La Mota.
Though Fagan denied the commission’s most serious finding—that she had used her position as a top elected official to gain private employment—Fagan settled with the commission, saying in documents that she no longer wished to pay steep legal fees to fight the allegations.
Around a conference table in a Salem government building, Fagan and her attorney, David Elkanich, sat with commissioners and their staff. Fagan was nearly expressionless the entire meeting, offering no smiles, no greetings to reporters, and no comments other than a brief statement at the top of the meeting, in which she apologized for her actions.
“For most of 2023, I have imagined the chance to sit here and defend myself,” Fagan said from the end of the conference table. “And then I spent the last two years in bittersweet reflection on my time in politics, and now I’m sitting here and I know that my actions were indefensible. Embarrassing mistakes, bad judgment, and I’m sorry. Whatever fine you decide to impose on me today, I will accept it.”
After brief remarks by commissioners about staff’s proposed penalty of $1,600 for the three ethics violations combined—with some commissioners voicing that the amount felt inadequate—the commission voted unanimously to reject the settlement.
Fagan, Elkanich and commission staff left the room to negotiate a new dollar figure. No more than 10 minutes later, they reentered the room and commission executive director Susan Myers offered a new penalty for consideration: a $3,600 fine, $2,500 of which was for the violation of using a public position for private gain stemming from the consulting contract.
Commissioners, after little discussion, approved the settlement by a 7–1 vote. Even after the increase, Fagan’s penalty was less than half what she would have received for a month’s work for her political donors.
Commission chair David Fiskum thanked Fagan for showing up and taking responsibility. With a nod, Fagan, her attorney, and two friends who had accompanied her to the proceeding walked quickly out of the building and into the parking lot. They shook off a reporter who attempted to ask questions.
And with little fanfare, Fagan had by Friday afternoon settled one of the last remaining inquiries about her conduct while in office. The U.S. Department of Justice closed its criminal investigation of Fagan late last year without filing charges. The Oregon State Bar has reinstated Fagan’s law license, allowing her to practice law again in Oregon. The three complaints with the Oregon Government Ethics Commission are now settled.
To WW‘s knowledge, two inquiries into Fagan’s behavior remain. The Oregon State Bar’s Disciplinary Counsel’s Office is investigating complaints about Fagan, an investigation that bar spokeswoman Kateri Walsh says will likely take a few months to complete. The Oregon Department of Justice is actively investigating a campaign finance complaint lodged against Fagan.
The one commissioner who voted against the $3,600 settlement, Dan Mason, says the fine was inadequate.
“I don’t think any reasonable Oregonian would look at that number and, on the face of it, believe it was adequate,” Mason says. “At the same time, this has cost her a political career which, by all accounts, was pretty bright. She was probably on track to be the next governor of Oregon.”
Vice chair of the ethics commission Shenoa Payne defended Fagan at the May 9 meeting, saying commission staff had not proven that Fagan got the contract because of her official position. And Commissioner Jonathan Thompson said he didn’t feel the body needed to “pile on” with a much steeper penalty: “I’m happy with the work the staff and Elkanich have done.”
The settlement Friday marks, almost to the day, the second anniversary of Fagan’s resignation in the wake of WW‘s reporting on her moonlighting as a contractor for two of her top political donors, troubled cannabis moguls Rosa Cazares and Aaron Mitchell. Fagan had taken the contract as her office was conducting an audit of the Oregon Liquor and Cannabis Commission, the state agency that regulates cannabis. And, records showed, Cazares had offered edits to the scope of the audit and shared those with Fagan, and had spoken to state auditors at the behest of the secretary.
As WW reported in early 2023, the couple had become top Democratic campaign donors beginning in 2022, and had quickly developed a financial relationship with Fagan by throwing her lavish fundraisers at the mansion they rented in the Northwest Hills, sending her campaign contributions in cash stashed in paper bags. They also started a personal friendship with Fagan through their kids’ participation in youth sports.
But as WW reported in March 2023, a little over a month before the consulting contract came to light, Mitchell and Cazares had in two years left a trail of millions of dollars in unpaid taxes to federal, state and local tax authorities, and were mired in legal battles with former business partners, suppliers and landlords.
Five days after WW reported on the contract, Fagan resigned under pressure from prominent Democrats and Republicans alike. Her bright political career—onlookers said she was in line to become the next governor—imploded.
Following her resignation, Fagan disappeared from the public eye. She quietly took a job at the Seattle law firm where she’d worked as a lawyer prior to entering Oregon politics. She and her attorney, David Elkanich, quietly complied with investigations launched into her dealings. It wasn’t until last Friday that Fagan appeared in public again—for the first time in two years.
To be sure, Fagan has paid for her actions in something far greater than money—in damage to her reputation, in the loss of a political career, and in public embarrassment.
Fagan has given little indication what she’ll do from here.
One small clue: In March, Fagan registered a new business with the state Corporation Division she once ran: a nonprofit called Beyond 13 Hoops, which does not yet appear to have received tax-exempt status from the IRS. It’s registered to her home address in Happy Valley.
While it’s not clear what the nonprofit aims to do, Fagan has always been an avid sports fan and played basketball in college. Throughout her career in Oregon politics, she still managed to coach youth basketball on the side.
One loose end remains: Despite pledging two years ago to donate all remaining money in her campaign coffers to the Oregon Humane Society (“I believe the right thing for me to do is redirect as much of their political donations as I have left in my PAC as I’m able,” she said at the time), Fagan has to date still not done so. Her campaign committee remains active, and she’s made $3,000 in payments to C&E Systems, which provides management services for Democratic candidates, since her resignation.
Neither Elkanich nor Fagan responded to a request for comment.