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Shemia Fagan to resign as Oregon secretary of state

The secretary of state's resignation is effective May 8. Her announcement comes a day after she ended her consulting side job with a cannabis company.

PORTLAND, Ore. — Oregon Secretary of State Shemia Fagan announced Tuesday morning that she will resign on May 8 amid ethical concerns.

Her announcement comes after state Republican lawmakers called for her to step down over her work as a paid consultant for the owners of a marijuana dispensary chain while overseeing a state audit on cannabis regulation.

Fagan will continue her duties until May 8, at which point Deputy Secretary Cheryl Myers will oversee the agency on an interim basis until Gov. Tina Kotek appoints a new secretary of state.

Related: Here's how Oregon's replacement process works if the secretary of state leaves office early

"While I am confident that the ethics investigation will show that I followed the state's legal and ethical guidelines in trying to make ends meet for my family, it is clear that my actions have become a distraction from the important and critical work of the Secretary of State's office," Fagan said in a statement. "Protecting our state's democracy and ensuring faith in our elected leaders – these are the reasons I ran for this office. They are also the reasons I will be submitting my resignation today."

On Monday, Fagan apologized for "poor judgment" and said she was ending her contract with Veriede Holdings, LLC., an affiliate of the marijuana dispensary chain La Mota. 

Fagan provided a copy of her contract, which paid $10,000 per month and included a bonus of $30,000 if she helped the company obtain marijuana licenses outside of Oregon and New Mexico.

She told reporters during a news conference on Monday that as a divorced mother with two young children and student loans, her secretary of state's salary was not enough. Fagan said she also began teaching a class at Willamette University Law School for supplemental income.

The secretary of state is responsible for running elections in Oregon and overseeing state audits. Fagan's annual salary in the position was $77,000.

The resignation response

Gov. Kotek released a statement on Tuesday in response to Fagan's resignation.

"I support this decision. It is essential that Oregonians have trust in their government. I believe this is a first step in restoring that trust," Gov. Kotek said. 

Last week, Gov. Kotek called for the Oregon Government Commission to investigate Fagan's actions and for the Oregon Department of Justice to look into a recent audit of cannabis industry regulations.

Democratic leaders in the state legislature, where Fagan had served before being elected in 2020 to the state's second-highest office, issued a joint statement after Fagan announced her resignation.

"Secretary of State Fagan’s severe lapses of judgment eroded trust with the people of Oregon, including legislators who depend on the work of the Audits Division for vital information on public policy," said House Speaker Dan Rayfield, Senate President Rob Wagner, House Majority Leader Julie Fahey and Senate Majority Leader Kate Lieber.

"This breach of trust became too wide for her to bridge. Her decision to resign will allow the state to move on and rebuild trust," they said.

Republican leaders also chimed in with a statement, praising the work of journalists at the Willamette Week who first broke the story on Fagan's moonlighting and gesturing vaguely to corruption in Oregon's state government.

"Secretary Fagan found herself in a web of ethical violations and it finally caught up to her thanks to exceptional investigative journalism by Willamette Week’s Sophie Peel and Nigel Jaquiss," said Senate Republican Leader Tim Knopp. "It is critically important that statewide elected officials exercise good judgment at all times. It is clear that Fagan has broken Oregon's trust beyond repair. It’s time to return integrity to the Secretary of State's office."

"Today’s resignation of Secretary Fagan reflects the level of corruption occurring in state government. Since the beginning of the year, I have said we need a transparent process. The level of abuse Secretary Fagan flaunted from her official position is just another example (of) the extreme measures of one-party rule in Oregon," said House Republican Leader Vikki Breese-Iverson. "We encourage the Governor to use this opportunity to appoint a person who can restore trust and ethics in the Secretary of State's office. Additionally, we suggest due diligence and thorough vetting in the consideration of potential appointees."

The secretary of state's chief of staff, Emily McLain, has also resigned. McLain sent a letter to Fagan Monday afternoon, stating that she planned to resign no later than June 30. McLain didn't provide a reason for her resignation.

"Because the circumstances are developing rapidly, I reserve the right to resign without further notice at any time," McLain said in her resignation letter to Fagan, which KGW has obtained.

Are salaries an issue?

Alongside her problematic contract with Veriede Holdings, Fagan maintained a job teaching part-time at Willamette University. While that may sound unusual, elected officials maintaining other work certainly isn't unheard of. In Oregon, salaries for these elected positions are low even in comparison to other states.

Late last month, the Oregonian compiled a report listing the base pay of all 49,000 Oregon state employees — not including pensions or other benefits. More than 7,000 state employees receive a base pay of at least six figures each year. Thirty-one of them make more than $300,000 and two make more than $400,000.

However, none of those high-earners are elected officials like the governor, attorney general or secretary of state. Instead, the big bucks go to top unelected employees at agencies like the Oregon State Treasury or Oregon Health Authority.

The highest paid state employee is Rex Kim, chief investment officer for the state treasury. He makes more than a half-million dollars each year in base pay alone.

The lowest paid full-time state worker was a human services specialist in the Department of Human Services, making under $34,000 a year — just over $16 an hour.

Fagan, as Oregon secretary of state, made $77,000 a year in base pay. In her position, she was auditor of all public accounts, chief elections officer, public records administrator, chair of the Oregon Sustainability Board and aide to the governor and treasurer in supervising and managing state-owned lands.

And, because Oregon does not have a lieutenant governor position, the secretary of state is next in line for the governor's office if something were to happen to the chief executive.

Fagan's own deputy, Cheryl Myers — soon-to-be interim secretary of state — makes over $230,000 per year.

The salaries for all of Oregon's top elected positions, including governor, are set by state law that was last updated in 2014. Treasurer Tobias Read receives the same compensation as the secretary of state — less than a sixth of what his top investor Rex Kim makes — while the attorney general makes $82,200 and the governor makes $98,600.

According to the Book of the States, an annual report by the Council of State Governments, Oregon falls near or at the bottom in compensation for these positions.

For governor base pay, Oregon is 47th in the nation, ahead of only Arizona, Colorado and Maine. For secretary of state, Oregon ranks 45th in the nation, ahead of only Wisconsin and Arizona — three states do not have a comparable elected position. Oregon is dead last in pay for attorneys general.

The Associated Press contributed to this report.

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