Ethics complaint targets Spokane Councilwoman Karen Stratton’s endorsement of Pasco marijuana business

Spokane City Councilwoman Karen Stratton’s endorsement last summer of a marijuana business seeking a license in Pasco has prompted formal allegations of unethical conduct.

The complaint, made to the city’s volunteer Ethics Commission, was made in the midst of a re-election campaign for Stratton, and as she and her husband navigate a bankrupcty case complicated by her own ties to the marijuana industry. The complaint was made by Spokane resident Neil Muller, who has made political contributions to Republican lawmakers and former political foes of Stratton. He alleges a letter the councilwoman sent, on official city letterhead, violates “both in spirit and specifically” several provisions of the city’s ethical code, including prohibitions on conflicts of interest and using an official position for personal financial gain.

Stratton said her relationship with Lucky Leaf, a marijuana retailer that opened in downtown Spokane in 2015, was borne out of her official role on the council assisting a business with complaints from the public. The pot shop opened amidst many protests from a nearby church four years ago. Stratton also said the marijuana production business she operates with her husband and other family partners does not have a processing license from the state, which would be necessary to sell their product directly to a retail store.

“I wrote it as a city councilperson, to me it was a city council to city council thing,” Stratton said, adding that she did not believe her actions were violations of the city’s ethical code.

The letter urges members of the Pasco City Council to consider the economic opportunities afforded by retailers such as Lucky Leaf, drawing on the transformations along First Avenue in downtown Spokane where the shop is located.

“The area has seen a resurgence of investment in recent years, and Lucky Leaf has been an important part of that resurgence,” Stratton wrote in her letter.

The owners of Lucky Leaf opened the store in Spokane after city officials forced closure of their Pasco storefront in 2015, and were hoping lawmakers there would reconsider their ban on stores during the summer of 2018. A ban on marijuana businesses in the central Washington city remains in place.

Stratton said she was approached by David and Shilo Morgan, owners of Lucky Leaf, to write a letter on their behalf, and she conferred with the City Council’s policy advisor, Brian McClatchey, before sending her own letter.

“I know Brian and I talked about it,” Stratton said. But Stratton said the conversation did not include whether writing the letter on city letterhead was appropriate.

When Washington regulators established the legal marijuana industry in the state, they split licenses to operate in the business into three categories: producers, processors and retailers. Producers are allowed by law only to sell to other producers or to processors. Processors are allowed to sell to retail stores. Some businesses own both producer and processor licenses, but Stratton’s business does not, which means her farm cannot sell directly to Lucky Leaf.

“Had that been a processor, I probably wouldn’t have done it,” Stratton said. “We don’t sell to retailers.”

David Morgan said Monday his business has never purchased directly from Stratton.

“There’s really no business connection,” he said.

But nothing in the law would prevent product her business had sold to a processor from ultimately winding up on Lucky Leaf’s shelves.

The letter, in the upper right corner, includes the logo of the City of Spokane and Stratton’s official office. Muller, in his complaint, urges the Ethics Commission to examine whether that official statement should be considered a conflict of interest.

“Stratton could have easily chosen to write a personal and/or business letter supporting her cannabis business colleagues and forwarding her personal political beliefs,” Muller wrote. “Instead, she invoked her office and the City of Spokane in a most improper manner.”

Stratton said the letter has been shared in Republican circles online, and the councilwoman canceled her scheduled appearance at an unrelated candidate event with the local GOP because they hadn’t called her to question her motives before posting the letter on their Facebook page in August.

“If I’ve done something wrong, I’ve been very transparent about it,” Stratton said. “I just can’t believe that this would be an ethics complaint. David Condon, Andy Rathbun and Jim Hedemark will do whatever they can to make this hard for me. Period.”

Rathbun is running against Stratton for her seat in northwest Spokane, and Hedemark is a political consultant for Rathbun’s campaign. Condon, Spokane’s mayor, reposted on his personal Facebook page a link to a blog shared to a local politics group mentioning the Strattons’ bankruptcy and her letter to the Pasco City Council.

The complaint also alleges a violation of the ethics code that prohibits the acceptance of gifts or gratuity for public services if it was “intended to serve as a reward for any official action on their part.” Lucky Leaf made a $1,000 contribution to Stratton’s re-election campaign Aug. 8, according to Public Disclosure Commission filings, but Morgan said the letter was not discussed before his firm made the donation.

Rathbun said he knew Muller professionally, but was unaware the ethics complaint had been filed. He declined to say whether the letter was an appropriate use of city resources.

“She wrote the letter, so she’ll have to answer as to her motivations,” Rathbun said.

Condon said in an email over the weekend that he had not coordinated with anyone in posting the link on his personal Facebook page. The mayor and Stratton have quarreled publicly several times in the past few years over issues including pay for department heads, Condon’s push for a restructured 911 response system in the city and the handling of the ouster of former Spokane Police Chief Frank Straub.

Muller has not contributed to Rathbun’s campaign, according to records filed with the Washington Public Disclosure Commission. But he contributed to Condon’s 2011 and 2015 mayoral campaigns, as well as a $50 donation in 2015 to Evan Verduin, who was running against Stratton. Verduin earned the mayor’s endorsement in that contest.

Stratton has recused herself from some votes involving the marijuana industry in the past, including when an arcade with dubious origins attempted to block the opening of a retailer on East Sprague Avenue.

As of Monday, the city’s Ethics Commission had not scheduled a meeting to discuss the complaint.