KKK controlled Oregonian politics in the 1920s? How did that happen?
Oregon was pretty white supremacist before civil rights hit the mainstream. Southern Democrats got second in the state in 1860, which is pretty remarkable considering they were representing a different region of the country. Even though Oregon was admitted as a free state, that had to do with maintaining a balance of free and slave states more than anything else. Had 'popular sovereignty' been applied in the state, it probably would've voted in favor of slavery. Confederate sympathy was actually somewhat popular, especially in the Southwest part of the state. Oregon also had restrictive laws about even allowing minorities to be in communities: it was illegal for blacks to stay overnight in most towns. I don't have any objective proof of this, but I've always suspected that many migrants who moved out west to Oregon during western expansion were Southerners, more so than most other western states. So when the KKK hit its peak in the 1920's, it was only natural that Oregon was one of its most successful states outside the South, although given that there were (and still are) so few minorities here (although Hispanics are changing that), they were more focused on anti-Catholicism than persecution of African-Americans.
Even today, Eastern Oregon is
extremely conservative.
Oregon's conservatives are considered more conservative than any other state, and the reason that the state has a liberal reputation despite that is according to the same study, Oregon's liberals are more liberal than any other state. If you drive around rural Eastern Oregon (Burns, Pendleton, Baker City, etc.) you will probably see endless amounts Impeach Obama bumper stickers and at least one confederate flag.
EDIT: Also, the hypothetical state of Jefferson, including Southwest Oregon and Northern California, is named after Jefferson Davis.