Federal prosecutors investigating Fagan, La Mota owners

Federal prosecutors are seeking a wide range of records related to former Secretary of State Shemia Fagan and the marijuana moonlighting that cost Fagan her political career.

The state Department of Justice released copies of subpoenas issued late last month to five state agencies by Ethan Knight, a Portland-based assistant U.S. attorney who was the lead prosecutor in the 2017 trial over the occupation of the Malheur National Wildlife Refuge by a group of far-right extremists. The Oregonian/OregonLive first reported the subpoenas.

Subpoenas went to the Secretary of State’s Office, the Department of Administrative Services, the Oregon Liquor and Cannabis Commission, the Oregon Government Ethics Commission and the Department of Revenue. Knight and FBI Special Agent John Mandrafina are seeking a wide array of records, all related to Fagan and La Mota cannabis retailer owners Aaron Mitchell and Rosa Cazares.

Mitchell contributed $45,000 to Fagan’s political campaign, and he and Cazares have been major donors to other Democratic politicians and causes.

Fagan in February took a $10,000-per-month consulting job for Veriede Holding LLC, owned by Mitchell and Cazares, to help the cannabis company expand outside of Oregon. Her office was auditing the Oregon Liquor and Cannabis Commission, which regulates the marijuana industry, at the time. 

She ended the consulting gig on May 1 and resigned as secretary of state a few days later. 

The state Justice Department is investigating the audit, and the state ethics commission is investigating Fagan. Justice Department spokesman Roy Kaufmann declined to say how and whether the existence of a federal investigation would affect the state inquiries.

The subpoenas require the departments to send records by June 21 to a grand jury coordinator in the U.S. Attorney’s Office in Portland.

From the Secretary of State’s Office, Knight requested Fagan’s employment and personnel records, documents related to her consulting work and travel records from Jan. 1, 2020 onward. He also asked for any documents related to the agency’s audit of the Oregon Liquor and Cannabis Commission and logs of all of Fagan’s calls and texts from work telephones.

He further asked the office to turn over records associated with contributions Fagan received from Mitchell, Cazares and any of their businesses. 

The Department of Administrative Services received a similar subpoena seeking Fagan’s travel records, payroll records and phone logs dating back to Jan. 1, 2018, when Fagan was still a state senator. That subpoena further requested records of communications between Fagan and Connecticut Lieutenant Governor Susan Bysiewicz, who Fagan admitted to calling as part of her consulting for La Mota to ask about who she might contact about the cannabis industry in that state. 

A subpoena to the Oregon Liquor and Cannabis Commission seeks any complaints about Fagan, Mitchell or Cazares and any of their businesses, as well as documents related to any investigations into the three. That subpoena also requests any records, including emails, texts, Microsoft Teams chat logs and meeting notes, related to the recent audit of the commission, communication with or about Mitchell and Cazares and communication to or from Fagan related to the marijuana industry. 

Knight asked the Oregon Government Ethics Commission to turn over any complaints it received about Fagan and documents related to those complaints, as well as any internal or external communication about Mitchell, Cazares, Fagan and Fagan’s campaigns. 

He asked the state Department of Revenue to turn over Mitchell’s and Cazares’s income tax returns dating back to Jan. 1, 2018, as well as records of corporate income taxes paid by the companies they own.