At last month's state Board of Elections hearings, board members fined the Phipps campaign $130,000 for violating state election laws.
"The Meg Scott Phipps campaign was grossly negligent," board Chairman Larry Leake said.
Shortly after the hearings, the State Bureau of Investigation and the Wake County district attorney launched an investigation into possible wrongdoing. Federal agents have now contacted the Elections Board and various people with knowledge of the campaign and fair industry.
"We'll take it in stride and we'll cooperate fully with whatever investigation might be forthcoming," said Phipps spokesman Mike Blanton.
Blanton said he knows of no one from the Agriculture Department who has been contacted yet by federal or state investigators.
In a letter, state Sen. Eric Reeves, D-Wake County, asks the state attorney general to join the investigation. He questioned Phipps' decision to break from 50 years of traditon and choose a new state fair midway operator. In his letter, he wrote,
"There is an appearance that the decision to enter into the contract may have been influenced by campaign contributions."
"It has become a very major challenge politically trying to deal with some of these issues when you have some of these people taking pot shots at you day in and day out," Blanton said.
Blanton admits the Phipps campaign made mistakes, but he still contends Phipps had no knowledge that any laws were broken. The difference between the federal and state investigations is that federal officals have more jurisdiction.
The U.S. attorney general could empanel a federal grand jury and could pursue interstate charges like federal mail or wire fraud.