Disgraced former Oregon secretary of state faces federal investigation for corruption

"I am sorry for harming the trust that I and so many others have worked so hard to build with you over the last few years,” Fagan said.

Hannah Nightingale Washington DC

A grand jury has reportedly been convened by federal law enforcement agencies to investigate former Oregon Secretary of State Shemia Fagan and her side consulting gig with cannabis company La Mota. 

A source briefed on the matter told The Oregonian that the grand jury will meet later in June, and appears to be focused on Fagan as well as La Mota owners Rosa Cazares and Aaron Mitchell.

Authorities are seeking records related to Fagan in multiple state agencies, including the Oregon Department of Revenue, the Oregon Liquor and Cannabis Commission (OLCC), and the Oregon Government Ethics Commission.

Governor Tina Kovek had previously asked the Ethics Commission to investigate Fagan’s deal with Cazares and Mitchel, and the Oregon Department of Justice to examine an audit from Fagan’s office of the OLCC’s marijuana regulation program.

On May 2, Fagan resigned from her position after it was revealed that she had accepted a $10,000 per month side job working as a consultant for Cazares and Mitchell, owners of La Mota. Fagan said she was compelled to take the job to supplement her $77,000 state salary. The job also gave her the opportunity for a $30,000 bonus each time she was successful in helping the company get licensed in other states.

"I am sorry for harming the trust that I and so many others have worked so hard to build with you over the last few years,” Fagan said during a press conference. "I will begin working to build that trust back today."

According to The Oregonian, Fagan met with Cazares and Mitchell in the fall of 2020, when she was running for secretary of state. Since 2020, Mitchell has contributed $45,000 to Fagan’s political action committee.

Since 2017, there have been 30 lawsuits filed against La Mota in Oregon circuit courts, totaling more than $1.7 million in unpaid bills from "cannabis vendors, handymen, testing labs, and even the accounting firm hired to complete 2021 tax returns for all of the LLCs."

Fagan's office released an audit indicating that they would be "cracking down" on the cannabis industry through significant audits. The office called on the Oregon Liquor and Cannabis Commission to "reform" rules for marijuana businesses. Ben Morris, a spokesman for Fagan's office, said that Fagan had recused herself from the audit because she is a paid consultant for La Mota. 

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