Oregon Secretary of State Shemia Fagan on Monday said she was ending outside work for a major cannabis company that paid her $10,000 per month plus potential bonuses.

“I owe the people of Oregon an apology,” Fagan said in a public statement. “I exercised poor judgment by contracting with a company that is owned by my significant political donors and is regulated by an agency that was under audit by my Audits Division. I am sorry for harming the trust that I’ve worked so hard to build with you over the last few years, and I will spend the next two years working hard to rebuild it.”

The Secretary of State registers businesses, performs audits on state agencies and funds, and holds public records. The position is also the state’s top election official and under the current version of the state constitution, replaces the governor in the event of death, resignation, or other reasons the office becomes vacant. Fagan, a former state senator from Portland, won election to a four-year term in 2020.

Fagan faced an immediate backlash when the consulting deal, first reported by Willamette Week, surfaced last week. Fagan confirmed she had signed up to consult on out-of-state marijuana licensing for Veriede Holdings, LLC, a subsidiary of the La Mota cannabis dispensary chain.

The Secretary of State’s office last week released an audit calling for streamlined state marijuana laws. Fagan said she had no active role in an audit released by her office last week that said overly strict regulations were preventing a more diverse population from roles in the industry. The report also said state regulatory demands made the legal business too expensive for entrepreneurs already wrestling with the disconnect caused by the federal prohibition of marijuana.

La Mota gave heavily to Democratic candidates in the 2022 election, including Gov. Tina Kotek, U.S. Rep. Earl Blumenauer, D-Portland, and others. Fagan and Treasurer Tobias Read has received contributions as well. The company has also been the target of complaints or reviews by the state Department of Revenue, and the Oregon Liquor and Cannabis Commission.

Building Backlash

Senate Minority Leader Tim Knopp, R-Bend, and House Minority Leader Vikki Breese-Iverson, put out a joint statement on Friday calling on Fagan to step down.

“This appears to be an ethics violation and if it isn’t then Oregon’s ethics laws are broken,” the GOP leaders said. “An elected official cannot take funds for personal use from someone they regulate.”

While speaking in far less harsh terms, Fagan’s fellow top Democrats’ reactions ranged from puzzled to directly challenging Fagan’s explanation that the outside work was not a conflict of interest.

“These allegations are bad, it’s difficult to see them any other way,” said House Speaker Dan Rayfield, D-Corvallis, told OPB. “It has obviously impacted the credibility of the secretary of state’s audits.”

Gov. Tina Kotek said she was “dismayed” by Fagan’s decision to work outside of her official role.

“I only have one job,” Kotek said.

But Kotek called discussion of whether Fagan should resign or not “premature.”

“It’s critical that Oregonians trust their government,” Kotek said Friday in a statement.

The governor called on the Oregon Government Ethics Commission to investigate Fagan and for Oregon Attorney General Ellen Rosenblum to examine the recent audit of the cannabis industry and its criticism of regulatory efforts by the OLCC.

Limited options for action against Fagan

Fagan initially said last week that she welcomed any scrutiny of her contract work. Fagan said she had talked with state ethics officials prior to signing the deal. She promised her outside role and official role would not conflict.

But over the weekend, Fagan reversed course, quit her side job, and called a press conference to issue a statement that acknowledged she had missed or ignored warning signs about her moonlighting with La Mota.

Republicans continued to call for Fagan to resign on Monday, but barring a change of mind, Fagan and every other major state executive officer in Oregon is extremely difficult to remove from office because of an omission in the Oregon Constitution.

Oregon is the only state in the nation that does not have a legal mechanism for legislators to vote to censure and remove a top-elected state official. Other than resignation or losing re-election, Fagan could only be removed from office by a long, laborious recall petition and election.

Under the Oregon Constitution, the only way to remove the state’s elected officials is through a long, laborious recall.

It’s the same legal pothole lawmakers hit in 2015 when Gov. John Kitzhaber flirted with the idea of staying in office despite influence-peddling allegations. 

In 2015, in the the wake of Kitzhaber’s possible non-resignation, lawmakers promised to revise the state constitution to include impeachment.

But in 2023, impeachment is still absent from the Oregon Constitution.

Only hard ways out

Under current Oregon law, the only way to remove a governor, secretary of state, or treasurer is through recall, a process that requires the gathering and verification of signatures followed by a recall vote at the next general election. That would be November 2024.

A current effort to amend the Oregon constitution to allow impeachment, House Joint Resolution 16, was introduced by Republican lawmakers on the first day of the session, Jan. 17. It’s chief co-sponsors are Rep. Bobby Levy, R-Echo, and Rep. Jami Cate, R-Lebanon.

The resolution is currently assigned it to the House Rules Committee on Jan. 20. It is not scheduled for any additional activity.

On Monday, Rep. Shelly Boshart Davis, R-Albany, called on the Legislature to send the issue to voters next year.

“Recent events illustrate, yet again, the importance of having an impeachment procedure on the books as a check against negligence and abuse of power by public officials,” Boshart Davis said.

The resolution proposes an amendment to the Oregon Constitution to create a power of impeachment of executive branch officials similar to that used by Congress when impeaching a President. The House would vote for an impeachment resolution — essentially an indictment of alleged abuses. It would require a three-fifths “supermajority” vote of the 60 Oregon House members to send the resolution to the Senate.

The Senate would then act as the jury of a trial. Under HJR 16, it would take 20 votes — a two-thirds majority of the 30 senators — for conviction. The resolution limits punishment to immediate removal from office and disqualification from holding other offices in the state.

But before it can become law, the constitutional change would have to be approved by voters at the next general election. Nov. 5, 2024 again. Only if the referral was approved by voters could lawmakers begin the impeachment process.

Neither a recall or a referall of to add impeachment to the Oregon Constitution would come to voters prior to Fagan simply running for re-election in 2024.

The earliest likely time that Oregon voters could get a chance to weigh in on Fagan would be the May 21, 2024 primary – if Fagan runs for re-election.

If a Democratic challenger did not defeat Fagan, then all state voters would cast ballots on whether she should receive another four years on the job in November.