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Former Ag Commissioner Phipps Makes Deal With Prosecutors, Avoids Federal Trial

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GREENVILLE, N.C. — Former state Agriculture Commissioner Meg Scott Phipps pleaded guilty Monday to five of the 30 federal charges against her in connection with a campaign finance scandal.

Phipps pleaded guilty to two counts of extortion, two counts ofmail fraud and one count of conspiracy. Her sentencing for the federal case is scheduled for March 1. By pleading guilty, she avoids a federal trial.

In her pleas, Phipps confirms she accepted illegal cash and sent in false campaign finance reports to cover her tracks. She also said she extorted money from carnival operators in exchange for lucrative contracts at the North Carolina State Fair.

"She accepts responsibility for the events that occurred," said Wade Smith, one of Phipps' attorneys.

The plea agreement calls for a recommendation of a five-yearprison term, but the judge does not have to accept therecommendation.

"Ms. Phipps' plea of guilty concludes a sad chapter in North Carolina history. Whenever a public officials violates the trust of the people, serious consequences must follow. A core mission of the United States Attorney's Office is to investigate and prosecute corrupt public officials," U.S. attorney Frank Whitney. "We take this mission seriously, and the public can rest assured that we will leave no stone unturned investigating credible allegations of corruption."

Phipps is due back in state court Wednesday for sentencing on state charges. On Oct. 30, a Wake County jury found Phipps guilty of perjury and obstruction of justice.

The state's case detailed how Phipps lied under oath before the State Board of Elections. It was looking into illegal campaign contributions and how that money was spent to pay off the campaign debts of a former political rival whom Phipps later hired.

Phipps denied knowing anything about where money was coming from or where it was going. But witnesses in the state case convinced the jury otherwise.

Judge Donald Stevens sent Phipps directly to the Wake County Jail to await sentencing. On Thursday, Phipps was moved to the Pitt County Detention Center in Greenville, located next to the Federal Courthouse, where she had been arraigned on federal charges.

Three of Phipps' former aides have already pleaded guilty to their involvement in the scandal.

Former deputy Ag Commissioner Mike Blanton pleaded guilty to two federal charges. He already turned evidence in Phipps' state trial. Blanton faces up to five years in prison and a $250,000 fine.

Former Phipps campaign treasurer Linda Saunders testified against her former boss after pleading guilty to three counts, including money laundering. Saunders faces 90 years in prison and a possible $2 million fine. Bobby McLamb, a former political rival to Phipps who later became a member of her staff, pleaded guilty to extortion and conspiracy. He faces 25 years in prison.

Phipps' attorneys said the outcome of the state trial influenced Monday's decision to plead guilty to federal charges.

"There was not anything in particular," Roger Smith said. "But that (the state trial) was a major event, and it had an impact like other things did."

Phipps faced 30 federal charges, including fraud, conspiracy and witness tampering.

Prosecutors warn the campaign finance investigation does not end with Phipps. Rocky Mount businessman Norman Chambliss has been linked to an illegal loan. Carnival operator Morris Vivona Jr. and retired Deputy Ag Commissioner Weldon Denny have also been named as potential targets.

Robert Phipps, Meg Scott Phipps' husband, and her father, former Gov. Bob Scott have also been implicated. They have not been charged.

Gov. Mike Easley, who called for Meg Scott Phipps to step down months ago, said Monday's plea "closes a sad chapter in North Carolina history." He also said the Department of Agriculture will continue to serve the people of North Carolina.