SALEM — Oregon Secretary of State Shemia Fagan has resigned effective May 8, a major turn in a moonlighting scandal that broke out just last week.

“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 released through her office shorty after 11 a.m. Tuesday, May 2. “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.”

Fagan, 41, said she believed any investigations would “show that I followed the state’s legal and ethical guidelines in trying to make ends meet for my family.”

Fagan issued an announcement that she will leave office next week, with her staff reporting to deputy Cheryl Myers on an interim basis.

“There will be no immediate changes,” said Ben Morris, the communications director for the Secretary of State.

Gov. Tina Kotek issued a statement saying Fagan had contacted her to say she was resigning. Kotek supported the decision.

“It is essential that Oregonians have trust in their government,” Kotek said. “I believe this is a first step in restoring that trust.

Under the state constitution, Gov. Tina Kotek would appoint a Democrat to fill out the rest of Fagan’s term, which runs until early January 2025. The office is up for election in 2024.

Legislators weigh in

The House and Senate were in session when word spread of Fagan’s decision to step down.

Senate Minority Leader Tim Knopp, R-Bend, who had called on Fagan to resigned called the decision “the right thing to do.”

“Treasurer Tobias Read and former State Senator Mark Hass would be good appointments that could return integrity to the SOS office,” Knopp said in a text from the Senate floor. Hass narrowly lost to Fagan in the 2024 Democratic primary. Read cannot run for a new term in 2024 because of term limits. 

As the elected treasurer, Read also replaced Fagan as the next in line for succession to governor in case of the death, resignation or other event that leaves the governorship vacant.

Under state law, Kotek would name a replacement from the same party as the departing office holder — Fagan is a Democrat. The substitute would served the rest of Fagan’s four-year term, which ends in January 2025. The office is on the ballot in 2024.

Kotek said she would work to minimize administrative turbulence of Fagan’s resignation so close to local elections next month.

“During the upcoming appointment process, my office will do everything possible to support the hard-working staff in the Secretary of State’s office and ensure this will not disrupt the May 16 election,” Kotek said.

Stark turn of events

Reports of Fagan’s outside work were first reported in Willamette Week early last week that Fagan was doing outside contract work for La Mota, a cannabis dispensary company run by major Democratic donors that had problems with back taxes to the state Department of Revenue and had been the focus of regulatory questions from the Oregon Liquor and Cannabis Commission.

Fagan confirmed the relationship, but asserted that she didn’t believe a $10,000-per month consulting contract with cannabis dispensary company La Mota would affect her ability to do her job.

On April 28, Gov. Tina Kotek, House Speaker Dan Rayfield and Senate President Rob Wagner all issued statements expressing concern about Fagan’s work with the cannabis company. Republican leaders called for Fagan to resign. On Saturday, Kotek called for an ethics investigation.

Her defense extend to fallout over an audit released by her office last week of regulatory issues of the legal cannabis business that called for looser rules. Fagan said she had little to do with the report, but reports circulated that while Fagan had recused herself from her office’s probe, she had suggested earlier that auditors talk to the owners of La Mota and the audit’s investigations was essentially completed before Fagan issued the directive that she was recused from involvement. OPB also reported Fagan had reached out to at least one fellow public official, Connecticut Lt. Gov. Susan Bysiewicz, to ask about licensing protocols for their state.

The past weekend showed a shift in Fagan’s approach to the gathering backlash.

On May 1, Fagan announced she had terminated the contract with La Mota, would do no more outside work and apologized to Oregon voters

“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,” Fagan said in a statement.

Fagan said she would use the remainder of her term to rebuild confidence in her and the office of Secretary of State.

On May 2, she resigned.

Soon after, Speaker of the House Dan Rayfield, Senate President Rob Wagner, House Majority Leader Julie Fahey and Senate Majority Leader Kete Lieber issue the following statement:

“As elected leaders, we know that our work depends solely on our ability to hold the trust of the people we serve and represent,” they wrote. “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. 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.”

What happens next

Under state law, Kotek must name a Democrat as an interim successor. Oregon does not conduct special elections to fill state vacancies.

The secretary of state is Oregon’s chief elections officer — though elections are conducted by officials in Oregon’s 36 counties — and oversees audits, archives and public records, and business registration and small-business assistance.

Also, of 10 predecessors excluding two short-term appointees, four secretaries became governor later, and four others sought that job.

Fagan was a lawyer when she was elected in 2012 to the first of two terms in the Oregon House from a district straddling Multnomah and Clackamas counties. She left in 2016, but returned two years later, when she unseated Democratic Sen. Rod Monroe, an opponent of rent control legislation. The Legislature approved a cap on annual rent increases in 2019.

Fagan jumped into the race for the open secretary of state position in 2020 after Jennifer Williamson, a former majority leader of the Oregon House backed by public employee unions, bowed out before the primary. Fagan won the nomination narrowly over state Sen. Mark Hass of Beaverton and Jamie McLeod-Skinner, who had been the party nominee for the 2nd District congressional seat in 2018.

Since Kate Brown became governor after the 2015 resignation of John Kitzhaber, who was 38 days into a fourth term, Oregon has had four secretaries of state.

Brown named Democrat Jeanne Atkins, who pledged not to seek a full term in 2016. Republican Dennis Richardson, a former state representative from Central Point and the party’s 2014 against Kitzhaber, was elected. Richardson died of cancer in February 2019. Brown then appointed Republican Bev Clarno of Redmond, a former House speaker and Senate Republican leader, who chose not to seek a full term in 2020. Fagan then won an open contest.