Officials Question Phipps' State Fair Contract

The new leader of the department,

interim Commissioner Britt Cobb,

started Monday. Meanwhile, questions abound as to what might be in store for former Commissioner Meg Scott Phipps and the carnival company she did business with.

Phipps stepped down Friday. Deputy Agriculture Commissioner Mike Blanton, charged with obstruction of justice, resigned Sunday. Monday offered more indication that Phipps' resignation can't make her problems go away.

Plus, the political scandal could impact this year's North Carolina State Fair.

"There's nowhere for her to run and hide," said former federal prosecutor Kieran Shanahan.

Shanahan said he sees real trouble for Phipps in the text of Blanton's indictment.

"The fact that they've no used her name in the indictment makes it undisputed that she is the ultimate target of this investigation," he said, adding that it is unusual for prosecutors to identify potential co-conspirators unless they are targets.

In addition to Phipps, Rocky Mount businessman Norman Chambliss and Amusements of America are labeled as important parts of a scheme to funnel an illegal loan to former Phipps aide Bobby McLamb.

McLamb, along with fellow former aide Linda Saunders, pleaded guilty to extortion and fraud related to the state fair.

Phipps awarded the 2002 and 2003 fair Midway contracts to Amusements of America.

With just months before the next fair, some people believe the Amusements deal should be torn up.

Dan Finch, who sat on the fair selection committee, wants Amusements disqualified.

Sen. Eric Reeves, who questioned the contract last summer, also wants it scrapped.

"I think there should be a new process in place, if there's time," Reeves told WRAL. "It is clear that the existing contract was supported by fraud, and that's terrible."

U.S. Attorney Frank Whitney said the corruption revolves around the auctioning of the state fair to the highest bidder.

Phipps has not been indicted. But observers see her name and influence all over the allegations against her aides.

"The government has set the hook," Shanahan said. "They are very close to indicting Meg Scott Phipps."

Attorney General Roy Cooper said his office will review the current fair Midway contract. He said he will then offer legal advice to Cobb.