RALEIGH, N.C. — State Agriculture Commissioner Meg Scott Phipps submitted her letter of resignation Friday. Plus, Mike Blanton, North Carolina's deputy commissioner of agriculture, has been indicted on 10 federal counts ranging from perjury to witness tampering.
Blanton is the third aide to state agriculture commissioner Meg Scott Phipps to face federal charges. He faces 65 years in federal prison if he is found guilty of all charges.
The charges include one count of conspiracy to commit obstuction of justice and tampering with a witness, one count of obstruction of justice, two counts of witness tampering, two counts of making a false statement to a federal agency, specifically the FBI, and four counts of perjury in testimony before the federal grand jury.
After learning that Blanton would be indicted, Phipps, who is embroiled in a two-year scandal involving State Fair contracts awarded to campaign donors, said she would resign Friday.
Her attorney, Wade Smith, told WRAL Friday morning that a resignation letter was being drafted and would be delivered to Gov. Mike Easley, who earlier had called for her resignation.
According to the indictment against Blanton, he was involved in an effort to cover up the involvement of Amusements of America in funding a $75,000 loan to Bobby McLamb, then a candidate for Commissioner of Agriculture, as well as Phipps' campaign payments on the amount due on McLamb's indebtedness.
Frank D. Whitney, United States Attorney for the Eastern District of North Carolina, said an indictment is only a charge and is not evidence of guilt. Blanton is entitled to a trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
A trial date has not been scheduled.
Blanton, 44, was hired as Public Affairs Manager for the Department of Agriculture in May 2001. He was promoted to Assistant Commissioner in approximately February 2002, and he was promoted to Deputy Commissioner of Agriculture in early 2003.
"It is now clear that it is in the best interests of my family, my friends, colleagues at the Department of Agriculture and the entire North Carolina farming community that I resign my post," Phipps said in a statement released by her lawyer.
"I am humbled to have served the people of North Carolina, and proud of what we have accomplished. I am sorry that we come to this moment. ... I hope that after a time of quiet reflection and prayer with my family, I may be able to find a way to serve again."
Smith said he was unsure when the resignation letter would be delivered, but said the governor told them "in very gracious and kind words" Thursday night that he would accept.
The state constitution calls for Easley to appoint a successor. Phipps, elected in 2000, has about a year and a half left on her term.
Thursday, attorney Sam Currin called Blanton a tireless worker for the department.
"I've been in discussions with federal prosecutors for some time, and I do expect them to seek an indictment," he said. "I do expect Mike to be indicted by the grand jury. It's unfortunate, but I do expect it to happen."
Also Thursday, Phipps' father, former North Carolina Gov. Bob Scott, was called to testify before the federal grand jury.
The grand jury is investigating Phipps' campaign finances and State Fair contracts awarded since she took office in 2001.
Phipps, whose grandfather, Kerr Scott, also served as governor, has been embroiled in a two-year scandal involving State Fair contracts awarded to campaign donors.
Last year, the state Board of Elections found that her campaign violated state law by taking $84,202 in cash from donors it could not identify and more than $14,000 in illegal corporate contributions. The board fined the campaign $130,000.
Since then, former Phipps aides
have both pleaded guilty to federal charges, including extortion. They are cooperating in the investigation and have not yet been sentenced.
Following Saunders' guilty plea, Gov. Mike Easley publicly urged Phipps to resign. She refused.
Blanton said Thursday that U.S. prosecutors had subpoenaed more Department of Agriculture documents and called department lawyer David McLeod to testify on Wednesday.
Prosecutors are investigating donations made to the Phipps campaign and the awarding of State Fair contracts.
Blanton said that a subpoena issued last week by the federal grand jury calls for the department to turn over a range of records, including personnel files for himself, Phipps and former Deputy Commissioner Weldon Denny.
Time sheets, travel records -- including those covering two trips by Phipps to Cuba -- and even documents related to a December 2001 Christmas party were also requested, Blanton said.
In May, the grand jury subpoenaed a six-page list of other documents. The latest subpoena included some items already requested, Blanton said.
Blanton, McLeod and fair manager Wesley Wyatt were called to testify before the grand jury last month. But they never did because the grand jury was hearing other evidence.
The delay was forced by Saunders' testimony, which continued over two days, two sources familiar with the investigation said.
Blanton said he and Wyatt have not been called back to testify before the grand jury, but said he was aware that he could be indicted.
"I certainly think that it could be a possibility," he said. "I don't know anything for sure at this point. The investigation is underway."
Blanton said he had not received any letters from prosecutors indicating that he is a target of the investigation and that he was unaware of any received by Phipps.
Federal prosecutors sometimes send out a "target letter" notifying people they could be indicted.
Bob Scott did not immediately return a call seeking comment on his grand jury appearance.
Phipps' lawyer, Roger Smith, also did not return a telephone call seeking comment.
Phipps has not been indicted.