This appears to be a violation of ethics and if not, then Oregon’s ethical laws are violated. A public official can’t take money from someone they supervise .” for their own use.
Ben Botkin, Oregon Capital Chronicle
Oregon Secretary of State’s Office released an audit on Friday of the state regulation of the cannabis sector. This follows revelations that Shemia Fagan accepted a job as a consultant for a cannabis firm in February.
Willamette Week was the first to report on Fagan’s consulting with Veriede Holding LLC – an affiliate of La Mota Cannabis dispensary chain – on Thursday. Willamette Week reported on Thursday that Fagan was working as a private consultant for a troubled cannabis couple.
Public records reveal that Fagan resigned from the audit on February 15, after contacting the Oregon Government Ethics Commission regarding the consulting work. Fagan had contacted ethics officials by February when the audit would be released in a few months and much work had already been done. Her work for the company began soon after her resignation.
Fagan is not accused of breaking any law. Her secretary of state staffers claim that Fagan’s decision to recuse herself from any further action was beyond what is legally required. This is because any actions resulting from her office auditing the Oregon Liquor and Cannabis Commission which regulates marijuana would be taken by the Legislature or commission and not her office.
In a press release about the audit, Deputy Secretary Cheryl Myers stated that “Secretary Fagan has recused herself due to a limited contract she holds in her personal life with a company regulated by OLCC.” While a conflict technically does not exist, Secretary Fagan voluntarily imposed a most restrictive restriction on herself, because she respected ethics rules as a minimum, and not a maximum.
Fagan was urged to resign by the Republican leaders of the legislature.
Meanwhile, Gov. Tina Kotek, a Democrat, called for an investigation to be conducted into the matter.
Fagan did not attend the press conference and was not available to be interviewed.
State audits director stresses independence
Kip Memmott is the director of audits at the office. He stressed the importance of the professional auditing staff.
He said that the audit team was responsible for all audit work. “All conclusions, methodologies or recommendations were generated by our professional audit team,” Mr. Ayers explained. “I am the final decision maker on all our audit reports… I make all decisions about what goes into our final audit report and they are all approved under my issuance.”
Fagan, in a meeting with the audit staff held in December 2021, asked if they had interviewed Rosa Cazares as the CEO of La Mota. , Willamette Week , reported . Audit staff interviewed her and others the following year.
Ben Morris, the spokesman for the secretary of state, said to the Capital Chronicle that the report was based on the results of the two dozen interviews done by auditors as part of the audit scoping process. Auditors made the final decision on the scope of the audit report. “No decision can ever be based solely on one source.”
Memmott stated that the secretary of State can tell him the audit plan, while the auditing staff will map it out and present it Fagan.
Memmott stated, “She doesn’t approve of that plan.” “She doesn’t weigh in on this plan,” Memmott said. “It is our internal management approval but she knows.”
Memmott stated that Fagan participated in two meetings regarding the audit prior to her recusal.
Memmott stated that the secretary did not participate in the reporting, review, or feedback process. She also said she had no input on any conclusions.
Fagan’s salary of $77,0000 per year is an anomaly in the state government. Early afternoon, the communications staff of the Oregon Health Authority and Departments of Human Services and Treasury, Business Oregon and Oregon Parks and Recreation as well as the Attorney General’s Office, Department of Consumer and Business Affairs and Department of Transportation said that their interim or permanent directors had no paid side jobs.
Marc Siegel, the spokesman for Colt Gill, the departing director of the Department of Education has confirmed that Colt Gill taught classes at the University of Oregon in 2018/2019 and 2020 on his own time. He does not have any other jobs.
The staff of other agencies did not respond by early afternoon to an information request.
Morris, Fagan’s spokesperson, stated that she does not have any other clients except for this one. She is paid as a freelancer. Morris, Fagan’s spokesperson, said that she also teaches at Willamette University.
Morris stated that “Secretary Fagan prioritises her public service, and she completes all work for her private contract during her spare time.”
He refused to answer the question of how much she was paid as a consulting, saying that it was not within his scope. Fagan also did not answer a question regarding her salary.
On Friday, Republican legislators released a statement calling for Fagan’s resignation.
In a joint press release, Senate Republican Leader Tim Knopp said that she must resign. House Republican Leader Vikki Briese Iverson agreed. If this is not an ethics violation, then Oregon’s ethical laws have been broken. A public official can’t take money for their own use from a person they are responsible for.
Results of audit
The audit concluded that the Oregon Liquor and Cannabis Commission (which oversees the cannabis business) should make changes in order to better serve Oregon and prepare the federal government for approval of marijuana. Marijuana is currently classified as Schedule I substance. Federal authorities view marijuana as having no medical value, and a high potential for abuse.
It is only illegal in three states.
The audit revealed that the federal status of the company poses a number of challenges. The federal government has imposed restrictions on interstate trade and a moratorium on the issuance of new licenses. Many banks have barred companies from doing business.
This impacts Oregon. Auditors found that Business Oregon, Oregon’s economic development agency for cannabis businesses, will not work with cannabis companies because they are worried about losing federal funding.
Auditors are also concerned that the licensing system of the commission cannot track demographic information, making it hard to track efforts to assist communities of color who have been disproportionately affected by the War on Drugs
Auditors’ recommendations include:
- Consider re-examining the regulations that require cannabis businesses to have steel doors and video surveillance 24 hours a day.
- When the licensing system is replaced by the commission, start collecting demographic data. Auditors determined that more data was needed to ensure that diverse communities have access and are included in state efforts.
- Assess the impact of the moratorium on the new licensees in the state.
Some members of Oregon’s congressional delegaion have been worried about the barriers facing the cannabis industry for a long time, particularly Democratic Rep. Earl Blumenauer who is a member the Congressional Cannabis Caucus. The U.S. House of Representatives passed a bill last year that removed marijuana from the list of controlled substances. The bill was killed in the U.S. Senate.
The current Congress has proposed additional reforms. The Oregon Capital Insider reported that Lori Chavez DeRemer, a Republican who represents Oregon’s Fifth District and is a member of the Republican Party, has broken ranks with her party members to co-sponsor the federal cannabis reform.
Lynne Terry, Editor-in Chief of the website, contributed to this report.
The original publication of this story was by Oregon Capital Chronicle.
The post Oregon’s Secretary of State’s Marijuana Consultancy Raises Questions about New Audit on Preparing for Federal Legalization first appeared on Marijuana Moment.
