Before Phipps handed in her resignation letter Friday, her right-hand man, Deputy Commissioner Mike Blanton, was handed a
by a federal grand jury. The charges include conspiracy to commit obstruction of justice, obstruction of justice, witness tampering and perjury.
Blanton faces a maximum sentence of 65 years in federal prison and a fine in excess of $2.5 million if he is found guilty of all charges. His attorney, Sam Currin, said Blanton maintains his innocence and has not decided whether or not he will resign.
The third Phipps aide to be indicted, Blanton is due back in federal court next Wednesday.
The contents of the Blanton indictment documents may be what led to Phipps' resignation.
Federal investigators believe Blanton lied when he testified to the grand jury last September. Though he didn't make any of the alleged illegal finanical deals being investigated, federal officals say he got into trouble trying to protect Phipps.
Investigators believe Blanton conspired to cover up Amusements of America's secret loan to former Phipps aide Bobby McLamb, who already has pleaded guilty to fraud and extortion regarding Phipps' campaign.
Former Phipps campaign treasurer Linda Saunders also has admitted to similar federal charges.
In addition to the obstruction-of-justice and perjury charges, Blanton is accused of witness tampering in the investigation.
Evidence against Blanton stems from statements made by both Saunders and McLamb, who stand to gain by cooperating with investigators.
The deputy commissioner did not join Phipps' staff until after her 2000 campaign. But prosecutors allege that once he arrived in 2001, he broke the law trying to hinder the investigation.
"We are gong to review this evidence and proceed according in what we believe to be in Mr. Blanton's best interest," Currin said Friday. "But at this time, he maintains his innocence. He insists he has committed no crime. And, like any citizen in this country, he's presumed innocent until proven otherwise."
Blanton did not talk publicly about the indictment on Friday.
"Mr. Blanton has worked tirelessly in that department," Currin said.
The indictments portray a scheme to cover up Phipps' knowledge that her campaign had illegally helped pay off McLamb's debt. In addition to Phipps, Rocky Mount businessman Norman Chambliss and Amusements of America are named as key players in a secret loan agreement.
Phipps eventually selected Amusements to operate the Midway at the 2002 State Fair. Investigators claim Blanton repeatedly instructed Saunders to lie to protect the commissioner or she would lose her job.
The indictments state that Blanton even used a third person to urge Saunders to stick to the story
she was indicted.
Investigators believe the coverup to protect Phipps began after Blanton started an extramarital affair with an unidentified official in the Agriculture Department.
The pressing question now: Could others named in Blanton's indictments be next?
Phipps, for one, has not been indicted for anything.
Phipps walked a fine line when she talked to WRAL's David Crabtree two weeks ago. When Crabtree asked her if she had broken any laws, Phipps replied: "Well, that's certainly left for others to decide."
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