With Roger Sollenberger, Political Reporter

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This week’s Big Dig . . .  How New Documents Reveal an Oregon Dem’s Support for a Shady Cannabis Grant 

It’s not often that a member of Congress faces backlash for a drug deal gone bad. 

In this case, the alleged deal doesn’t involve illicit substances changing hands. Rather, it concerns an alleged exchange of money and sway between now-Rep. Val Hoyle (D-OR) and the cofounders of a cannabis company called La Mota, one of the largest dispensary chains in Oregon.

Pack a BOLI

Those co-founders, Rosa Cazares and Aaron Mitchell, have been mired in the scandal for a year now, after local outlet Willamette Week unearthed evidence that La Mota had an improper private financial arrangement with Oregon Secretary of State Shemia Fagan, prompting the spectacular implosion of a new grant program. Fagan resigned within weeks, but the investigation has only expanded since then, with a Justice Department subpoena in January signaling that the feds are starting to eye Hoyle.

A Hoyle campaign spokesperson told The Daily Beast on Wednesday that the DOJ has not contacted the congresswoman. But documents from a public records request filed with Hoyle’s former state office, obtained by The Daily Beast, offer a glimpse of what the DOJ may have collected from that subpoena.

The request was placed with Hoyle’s former agency—the Oregon Bureau of Labor and Industries (BOLI)—months before the DOJ subpoena, asking for documents related to the La Mota investigation. It was fulfilled on Feb. 14, two days after the subpoena was first reported, and BOLI’s reply didn’t indicate that any responsive documents had been withheld due to the investigation. Those documents include details about La Mota’s state grant, meeting minutes, and a previously unreported email that shows Hoyle expressing personal interest in securing the since-revoked $554,990 grant.

“I’m still the chair of the Apprenticeship Council and will be until January,” Hoyle wrote in that email, which she sent to her deputy. “I’d like to feel like I have some involvement in setting the agenda or at least have the option to weigh in before we move forward.”

Green New Deal

Hoyle was first elected BOLI commissioner in 2018, and she held that post until she joined Congress in January 2023. She first met Cazares in early 2021 at a skyline-view restaurant, Willamette Week reported, where the two discussed the possibility of a state-sponsored La Mota apprenticeship for people of color. Over the ensuing months, employees at the bureau stayed in touch about the possibility, and the La Mota project soon took the form of a minority outreach nonprofit, a consortium of players in the Oregon cannabis industry called “ENDVR.”

During the push for the apprenticeship grant, Cazares and Mitchell doled out major donations to some of the state’s most prominent Democrats. One of the couple’s biggest beneficiaries was Hoyle, who received a $20,000 cash donation months after meeting Cazares, in support of her anticipated BOLI re-election bid. (At the time, Oregon permitted unlimited cash contributions in state elections, but the La Mota scandal has led to a $100 cap on cash gifts, along with other reforms.)

But Hoyle had other plans. When the longtime Democratic incumbent in Oregon’s 4th District, then-Rep. Peter DeFazio, announced he would not seek re-election, Hoyle jumped in the race. Oregon campaign finance records show that her state campaign refunded Mitchell’s $20,000 in December 2021, with Federal Election Commission records showing that Mitchell and Cazares both contributed $2,800 for Hoyle’s congressional primary election about four months later, in multiple donations of varying denominations on April 30—days before ENDVR submitted its grant proposal. 

Cazares also threw another $200 in for Hoyle’s general election account that same day, an amount that, if split between the two donors, would have put them both at the exact primary election maximum of $2,900.

It’s unclear whether those original contributions came in the form of cash, the default payment method for many cannabis industry operators in the state. The various payments were not made through ActBlue’s online system, raising the possibility of multiple same-day checks or wire transfers.  While legal at the time in Oregon state elections, cash donations above $100 are impermissible for federal campaigns and committees.

Cashed

Asked about the La Mota funds when the scandal broke last year, Hoyle released a statement saying, “I’ve returned all campaign contributions from La Mota owners and won’t be taking any additional funds from them.”

But she hadn’t returned the money. In fact, Hoyle’s campaign didn’t issue the refunds until last November. Additionally, Hoyle is also still holding on to money from a third La Mota associate made around the same time—a $1,000 gift from Laura Vega, who co-founded ENDVR with Cazares. Unlike Cazares and Mitchell’s contributions, Vega’s funds were earmarked through an ActBlue online donation portal. Additionally, several other Hoyle donors are affiliated with other groups that signed up for the ENDVR program.

In response to an inquiry for this article, Hoyle provided a statement claiming that all of The Daily Beast’s questions had already been addressed.

“All these questions have been asked and answered. Knowing what we know today, I would not have accepted political support or interacted with anyone associated with La Mota,” the statement said.

A Hoyle spokesperson claimed in an email to The Daily Beast that the La Mota donations were not made in cash. The campaign did not reply to follow-ups explaining the unusual same-day increments and requesting documentation to confirm that the funds were not cash.

The color of money

It didn’t take long for the whole thing to unravel. A March 2023 Willamette Week investigation revealed that La Mota and its founders were secretly facing millions of dollars in tax liens along with dozens of lawsuits for unpaid bills. The grant itself, intended to fund a handful of apprenticeship opportunities for communities of color, also eventually proved legally nonviable. Oregon’s new labor commissioner immediately recalled the grant money—but not before ENDVR had already paid Vega $97,000.

The scandal soon claimed another scalp, in the form of Fagan’s resignation. The Secretary of State—whom Cazares and Mitchell had also raised money to support—had been consulting for La Mota to the tune of $10,000 a month while her office was reviewing state cannabis regulations. The DOJ also got involved, subpoenaing five state agencies to probe the matter.

(The Daily Beast asked the Hoyle campaign when the congresswoman “first heard” about Fagan’s side deal; the spokesperson replied that Hoyle had “first learned” about the arrangement from news reports.)

Burner phone

The scrutiny on Hoyle has only increased. Last summer, Willamette Weekly broke another development—Hoyle still hadn’t given BOLI communications from her personal devices, which BOLI had inquired about in emails ahead of her departure as part of its standard record-keeping obligations for the state. That dispute dragged on for months, with Hoyle only partially conceding in November.

Despite the district’s Democratic bent, Republicans see Hoyle’s seat as one of their top pick-up opportunities for 2024. Her top GOP opponent, Air Force veteran and attorney Monique DeSpain, has made much political hay of the scandal as it has unfolded, and will square off against a small field in the Republican primary next month.

The House GOP’s official campaign arm targeted the race as part of a five-figure ad blitz last month. That buy also took aim at Hoyle’s fellow Beaver State Democrat, Rep. Andrea Salinas. 

In February, news broke that the Salinas campaign had also received a donation from La Mota.

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From Roger’s Notebook...

RAGA Against the Machine. For more than a year, the once-active super PAC for the Republican Attorneys General Association, called “RAGA Action Fund,” has been dead quiet. No money in. No money out. No money in the bank. But this week RAGA Action broke its silence in a strange way, reporting exactly two transactions: a $5,000 transfer in and a $5,000 transfer out, on the same day. The circumstances raise questions of whether these transfers add up to an illegal “straw donation,” a contribution made in the name of another person or entity.

The $5,000 that came in to the super PAC on March 19 was a transfer from the Republican Attorneys General Association itself, an outside advocacy group organized as a “section 527” group under the IRS code. The $5,000 that the super PAC sent out later that day was transferred to the state campaign committee for Indiana’s GOP Attorney General Todd Rokita—a member of RAGA’s executive committee who is also up for re-election this year.

In other words, it looks like RAGA made a $5,000 contribution to Rokita’s campaign, but first passed the money through the RAGA Action super PAC. Given the fact that RAGA Action reported no activity for more than a year—and had no cash on hand at all—there appears to be no other plausible explanation for the same-day transfers.

Saurav Ghosh, director of federal reform at nonprofit watchdog Campaign Legal Center, told The Daily Beast that the fact pattern demonstrates a straw donation. But, he said, it’s hard to understand why RAGA would have moved the money this way, rather than making a direct contribution to Rokita—especially considering the amount was just $5,000, the maximum that RAGA could have given directly under Indiana law.

“It’s unlawful under Indiana law to make a contribution in the name of another, so if indeed this money went from RAGA to the super PAC for the purpose of this contribution to Rokita, that appears to be a violation,” Ghosh said. “It does appear like a straw donation scheme. The problem is that it just doesn’t make any sense, we can’t see the motivation behind it.”

RAGA Action’s inaction is also unusual. Super PACs like RAGA Action Fund may raise unlimited amounts of money, including from corporations and individuals. But they are generally forbidden from donating directly to federal candidates, though that’s permissible in many states—including Indiana, where RAGA Action gave hundreds of thousands of dollars to Rokita’s 2020 campaign.

The super PAC is also historically a heavy hitter, pouring millions into state AG elections in the 2022 midterms. (RAGA also steered $8.5 million into state elections that year, according to the Center for Responsive Politics.) But that was something of a down year, when the group was still catching backlash for scandalous robocalls to drum up support for the Jan. 6 rally. RAGA Action stopped all political activity after those elections—until the transfers last month.

The RAGA organization has quietly become one of the leading players in many of today’s major right-wing legal movements, advocating for stricter abortion laws, deporting undocumented immigrants, and overturning the 2020 election results.

This wouldn’t be RAGA’s first time running afoul of campaign finance law. As Popular Information reported in 2022, the association previously accepted an illegal $50,000 contribution from Children's Health Defense, the anti-vaccine charity chaired by presidential longshot Robert F. Kennedy Jr.

NO COLLUSION! One of the many mysteries of Donald Trump’s legal bills—a case of international intrigue—might have been resolved this week.

The most recent filing from Trump’s “Save America” leadership PAC, which Trump has turned into his legal slush fund, showed a roughly $52,000 payout to a London law firm, called William Sturges LLP. No federal committee had ever paid Sturges, including Trump’s committees, and it’s unclear what the expense was for. A Trump spokesperson has not returned our questions.

Trump, however, has been pursuing a lawsuit in the United Kingdom. That would be his ludicrous defamation case against former British spy Christopher Steele, who authored the explosive 2016 dossier which, while never fully verified, has proved accurate in a number of ways, including its description of the arc of Russia’s influence in the 2016 election and collusion with members of the Trump campaign.

The dossier has been a thorn in Trump’s side ever since. Trump eventually sued Steele in the U.K. last September, but a judge scrapped the case, ordering Trump to shower gold on Steele, in the form of £300,000 (~$380,000) to cover legal costs for Steele’s private intelligence firm, Orbis. (That’s about what Trump’s donors paid to fund his losing arguments.)

Trump appealed, but that was tossed out last week. If the firm that handled the initial lawsuit passed on arguing the appeal, and William Sturges took it up, mystery solved. And it didn’t take a British spy to figure it out.

Coming out in the wash. A legalized money laundering loophole for national political parties saw some early action this week.

The Alabama Republican Party just reported a $79,000 transfer from the National Republican Senatorial Committee Victory joint fundraising committee, which came in on March 26. The filing shows that the money in that lump included $40,000 from GOP megadonor Steve Wynn and his wife.

The next day, the Alabama GOP sent $75,000 back to the NRSC. The Wynns, however, had already maxed out to the NRSC with their initial donations, in February, so the pass-through would have put them over the limit if not for a remarkable loophole in campaign finance law.

Federal joint fundraising committees that include a national party and state parties can disperse earmarked donations to the state parties within contribution limits. But because state parties are allowed to transfer unlimited amounts of money back to the national party, the national party—in this case the NRSC—can essentially claw back all of that money at any point, without attribution to the original donors.

Both Trump and Joe Biden have engaged massive joint agreements with their national parties and state committees. Expect a lot more of this. And as this cycle demonstrates, when it comes to the cash-strapped GOP, expect it soon.

More From The Beast’s Politics Desk

In his new insane bid for Congress, disgraced former Rep. George Santos left his old turf to target the one member of the New York delegation he’s said he personally dislikes: Nick LaLota. William Bredderman waxes eloquent on the long-running feud. 

When the RNC said last summer that it was launching the “Bank Your Vote” program to promote early and mail-in voting, the announcement displayed total ignorance of the reason that such an argument was necessary at all: Trump spent years persuading GOP voters that those forms of voting are inherently illegitimate. Riley Rogerson and Sam Brodey take you through the looking glass to reveal how the GOP’s cognitive dissonance has been working out for them.

When the name of one of the biggest investors behind Trump’s new social media venture was revealed last week, it leapt off the page: GOP megadonor Jeffrey Yass. But the Yass-Trump connection itself is far more nuanced and tenuous than is broadly assumed. And, as our newest Beast reporter Mini Racker and I explained on Monday, that has a lot to do with who Jeffrey Yass is. Get all the paradox you can handle in our report—and welcome Mini to the Pay Dirt team!

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