Oregon Secretary of State upholds Fagan office's controversial OLCC audit

PORTLAND, Ore. (KOIN) — Oregon’s former Secretary of State Shemia Fagan was at the center of an ethics controversy when she disclosed she had entered a consulting contract with a state-regulated marijuana company.

But on Monday, current Secretary LaVonne Griffin-Valade maintained that the Fagan office’s audit of the Oregon Liquor and Cannabis Commission should be upheld despite previous concerns of a conflict of interest.

In her statement, Griffin-Valade admitted that Fagan’s actions shook the public’s confidence — but they didn’t affect the validity of the audit.

“….public interest in this case is best served by independent auditors providing evidence-supported recommendations to state government,” Griffin-Valade said. “Neither my review nor any other has uncovered a reason to think this report is anything short of that standard. For that reason, I encourage the auditee and other state leaders to treat this report with the same high regard they do any other report from the Oregon Audits Division.”

The public was first informed of Fagan’s contract with Veriede Holding, LLC, an affiliate of La Mota, through a Willamette Week article in late April.

According to previous reports, Fagan entered the contract with the cannabis company in February — after recusing herself from the OLCC audit and telling employees she believed there was no “real conflict” of interest.

When the news broke a few months later, Fagan’s office declared that the contract “explicitly incorporated” Oregon Government Ethics Commission policies, including one that prohibits public officials from using their role to obtain additional personal income from businesses.

Her office additionally said the consulting agreement solely included business dealings outside of Oregon.

At the same time, it was revealed that La Mota co-founder Aaron Mitchell had donated at least $45,000 to the former secretary’s campaign. A KOIN 6 report also revealed that the marijuana brand, one of Oregon’s largest dispensary companies, owned a “squatter house” in Portland’s Hazelwood neighborhood.

Fagan resigned from her secretary position in May due to the ethics concerns. But during a month-long review, Oregon’s newly-appointed secretary found that her predecessor’s office didn’t violate any state guidelines within the OLCC audit.

Griffin-Valade has advised the Oregon Audits Division to implement new policies to gain the public’s trust, including hiring an independent contractor to develop an audit plan risk assessment process.