Assistant Ag Commissioner Mike Blanton admits the Phipps campaign made mistakes, specifically when it comes to the debt of former opponent Bobby McLamb.
"I think some people have let her down during her first year in office," Blanton said. There is some early indication that some of that debt may have been paid off by the Phipps campaign."
The payment of that debt would be a violation of state election law, a misdemeanor. Norman Chambliss of Rocky Mount, who is subpoenaed to testify at next week's hearings, confirmed the payment.
Chambliss, a McLamb supporter, told WRAL he co-signed a $75,000 loan for McLamb's campaign, which is itself a violation. He said the Phipps campaign has paid off the note in installments at Centura Bank.
Blanton said Phipps is not trying to cover up the situation.
"She's not trying to hide anything and nothing was done intentionally wrong. This is a result of complicated campaign-finance laws," Blanton said. "She stands ready, willing and able to take whatever corrective action is necessary."
The Phipps campaign also faces allegations it took in more money than was reported, but, Blanton contends Phipps had few dealings with the finances. From her choice to change vendors for the Midway at the State Fair to possible problems with campaign reporting, the commissioner has taken heat since taking office.
However, Blanton points out Phipps is not a shrinking violet in the face of criticism.
"She's like, 'Bring it on. Everybody keeps coming after me and she's not about to give up.' I know that for a fact," Blanton said.
Blanton said he believes Phipps has become the target of criticism because she is a woman and because she broke a 50-year tradition by choosing a new state fair midway operator.
Phipps also must pay the state nearly $10,000 for personal use of a state vehicle. She had already paid out calculated mileage for commuting the 106-mile round-trip from Haw River, but the state auditor said she was required to pay more than $700 a month whether she made the commute or not.
Paying off an opponent's campaign debt is legal, but it can only be done with a contribution of $4,000 or less or with a separate fund-raiser held for the sole purpose of relieving the debt.
There is no evidence that happened in this case. This type of campaign-reporting violation typically results in fines or provisions to pay back the money.
Phipps turned in her state-issued SUV earlier this year, saying it cost the department too much to operate.
Phipps declined to talk to WRAL before the hearings.