Former Oregon secretary of state faces second ethics investigation

The Oregon Ethics Commission is launching a full investigation into former secretary of state Shemia Fagan and her potential ethics violations using state resources for personal benefit and reimbursement of personal expenses.

On Friday, the commission unanimously voted 7-0 to move ahead after a preliminary review determined a “substantial, objective basis” for believing Fagan used taxpayer and donor money to pay for hotel pet fees and expenses related to her family joining her on trips.

The review was conducted following a written complaint submitted June 13 by former Republican lawmaker Julie Parrish drawing on reporting from an Oregonian article.

The ethics commission investigation into Fagan’s trips will be the second it is conducting on the former secretary.

Fagan still faces an ethics investigation stemming from her acceptance of a $10,000-a-month consulting contract with cannabis company La Mota as her office oversaw an audit of the marijuana industry.

Fagan resigned in May amid controversy over her connections to La Mota.

Complaint questions 5 trips

According to the Oregonian, Fagan spent thousands of dollars in “questionable reimbursements for state travel expenses” and possibly double-dipped by seeking compensation from both the state and her campaign funds.

The complaint submitted to the ethics commission focused on five trips where Fagan may have used state resources to pay for hotels and other travel expenses for relatives and her romantic partner in 2022 and in April of 2023:

  • A 2022 trip to Washington D.C to attend the National Lieutenant Governors Association conference where Fagan was accompanied by her son. Fagan was reimbursed for the hotel stay, which she paid using her own credit card. The complaint asks for an investigation into whether Fagan earned personal reward points by using her personal card.
  • A May 2022 trip to eastern Oregon meant for Fagan to visit county clerks and prisons in the area. Fagan was joined by her children, sister, dog and a staffer. Two rental cars were required because Fagan’s family filled the first. Fagan scheduled two state prison visits on Monday after state-related visits the prior Wednesday, Thursday and Friday. The extra two nights cost the state $425, according to the complaint and Oregonian.
  • A July 18-23 trip in 2022 to Chicago where Fagan was joined by her children and partner. Fagan sought reimbursement for travel to and from the airport and used $878 in state funds for lodging at a hotel in Chicago.
  • An August 2022 trip to the Oregon Coast beginning along the southern Oregon Coast and ending in Sunriver. Fagan was meant to visit county clerks, survey a state research forest, tour a state prison and attend a state land board meeting but the complaint alleges Fagan spent more hours at recreational sites than on official business. The complaint also alleges the use of state funds to pay for several nights of stays at hotels where she required a double-queen hotel room for two adults, two children, and one dog. Fagan’s family once again filled one rental car, requiring her senior advisor to rent a separate car for the trip.
  • An April 2023 trip to Washington, D.C with her children and romantic partner where her children attended the White House Easter Egg Roll. Fagan used $1,169 in state funds for the trip in addition to funds from the National Lieutenant Governors Association and her campaign to pay for four nights at a four-star hotel near the White House.

The complaint also questioned a $128 reimbursement for a COVID-19 test Fagan purchased during a July 2022 trip to Salt Lake City Fagan took to attend the Oregon Track and Field Games at the request of former Gov. Kate Brown.

Fagan investigated by state auditors

Fagan is being represented by David Elkanich in the investigation. According to the ethics commission review, he responded by letter on Aug. 4, writing that during her tenure as secretary of state, Fagan’s travel was already investigated by the Oregon Audits Division following a different complaint from a state employee.

The Audits Division conducted its review of travel from April to September 2022 independently and without the knowledge of Fagan, according to Elkanich, and issued a report Oct. 13.

That report found that controls within the Secretary of State’s Office were effective and minor issues with reimbursement claims were addressed in real time, the ethics commission review stated.

“Fagan was careful to comply with all regulations and policies regarding expenditures reimbursed by the state or her Political Action Committee,” Elkanich wrote in his response.

Fagan also self-reported a potential ethical violation based on the Audit Division’s finding of a potential violation. That self-report was submitted to the ethics commission Nov. 14, 2022.

Fagan wrote of her trip in mid-2022 to the Oregon Trial Lawyers Association Convention at Sunriver Resort. Fagan reported that she requested a rental vehicle from Aug. 7-15, instructing her assistant to reduce her travel reimbursement by two days to “ensure the official vehicle rental expenditure properly reflected only my official travel.”

The assistant was notified afterward that reimbursing the state for two days of non-state use of a rental vehicle following her return was technically not proper under reimbursement policy, Fagan wrote in her self-complaint. Fagan requested general guidance for future events when state and non-state business are consecutive and asked the ethics commission to determine if an ethical violation had occurred.

Elkanich notes that commissioner Director Ron Bersin responded to her self-complaint on Nov. 28 and, according to Elkanich, dismissed the complaint. Elkanich requested the ethics commission “stand by its earlier determination on similar allegations and facts and dismiss the Parrish complaint for lack of an ethical violation.”

Commissioner Shenoa Payne voted in favor of further investigation but commented about her concerns with the commission declining to investigate the report then and choosing to do so from a separate complaint months later.

“It seems that she made an effort to bring those issues before this commission previously and asked for guidance and this commission declined to investigate,” she said.

Investigator Myers acknowledged Fagan’s self-complaint in 2022. At the time, the commission did not open a case because the information provided appeared to indicate no violation of government, she said during a commission meeting Friday.

“However it appears from the current complaint and the additional documentation provided by the Secretary of State’s Office that there may have been more information relating to that trip than was initially provided to us,” Myers said.

She added that she wasn’t suggesting the self-report in November was “disingenuous” but wanted to note that investigators were walking through all of the new information and more information than was available previously.

For example, the ethics commission review suggests Fagan did not disclose a 60-mile excursion off course from her official work trip during the self-reported complaint.

Further investigation required

For the ethics commission’s preliminary review, the Secretary of State’s Office provided the ethics commission with more than 500 pages of documentation related to Fagan’s travel and reimbursement requests, which require further investigation to review, investigator Susan Myers wrote. However, the preliminary report determined Fagan included her children, sister, partner and family dog on her business trips on a number of occasions both in and outside of Oregon.

Myers told the commission that it appeared that on some occasions Fagan requested hotel rooms with double queen beds for two adults, two children, and one dog and while Fagan did not seek reimbursement for pet fees, the cost of the double-queen rooms was greater than the cost would have been for a single-occupancy room. This could be a violation of the conflict of interest and use of office provisions, Myers wrote.

Myers also wrote that a rental car used in August 2022 was a full-sized SUV instead of a compact or economy car that would have been normally rented by state personnel according to policy.

“Use of a larger vehicle for her personal benefit, or that of her family, in order to fit her family may be a violation of the conflict of interest and use of office provisions,” Myers wrote.

Additionally, she noted that the SUV rental could be prohibited use of the office if it allowed Fagan to avoid a financial expense, either by preventing wear and tear on her family vehicle or by using the discounted state rental contract.

Dianne Lugo covers the Oregon Legislature and equity issues. Reach her or on Twitter @DianneLugo.

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