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Former N.C. Agriculture Commissioner Indicted On 28 Federal Charges

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RALEIGH, N.C. — Former state Agriculture Commissioner MegScott Phipps, already facing state charges in an investigation ofher campaign's finances, was indicted Thursday on 28 federalcharges, including extortion, witness tampering and fraud.

Phipps, the daughter and granddaughter of North Carolinagovernors, was indicted on 10 counts of mail fraud, nine counts ofwire fraud, four counts of extortion, one count of conspiracy, onecount of bribery, one count of obstruction of justice and twocounts of witness tampering, federal prosecutors said.

Attorney Roger Smith broke the news to Phipps, who has always maintained her innocence.

"She was disappointed, but she's strong and stated her strength again, and we expect her to continue to be strong," he said.

Phipps resigned in June after three former aides were indictedas a result of a federal probe examining whether her campaignsolicited illegal campaign contributions from carnival companies. Amonth later, she was charged in state court with perjury andobstruction of justice.

Twenty-three of the felony counts carry a maximum prison penaltyof 20 years each. The remaining five carry prison terms of five to10 years.

Parallel state and federal investigations center on a contractawarded by Phipps to carnival operator Amusements of America to runthe midway at the N.C. State Fair and campaign donations arrangedby the company.

Two former Phipps' aides, Bobby McLamb and Linda Saunders, havepleaded guilty to federal charges including extortion. They havenot yet been sentenced and are cooperating with prosecutors.

Former Deputy Commissioner Mike Blanton has pleaded innocent tofederal charges including perjury and obstruction of justice. Histrial is set for Oct. 10.

A fair vendor, James H. "Jimmie" Drew III, has been indicted onstate charges. Drew, who was given a contract to operate a chairlift at the State Fair, is accused of lying to investigators aboutproviding illegal campaign contributions to Phipps.

"The federal and state agencies conducting this investigationhave worked tirelessly and cooperatively," U.S. Attorney FrankWhitney said in a news release. "The team is now focused onpreparing for the Michael Blanton trial, which is scheduled forOct. 6, 2003. This office and the U.S. Department of Justice remaincommitted to investigating all credible allegations of publiccorruption."

The investigation into the Phipps campaign also brought asubpoena for her father, former Gov. Bob Scott, who testifiedbefore a federal grand jury in June.

Federal indictments allege that a web of illegal transactionstoo place between Phipps' campaign, McLamb, Rocky Mount businessmanNorman Chambliss and several amusement companies.

The transactions were designed to allow Phipps to secretly payoff a $75,000 bank loan and other campaign debts for McLamb inreturn for his political support and access to his ties in the fairindustry, the indictments said.

Blanton, Phipps and Saunders also allegedly met at a Raleightown house in April 2002 to devise a cover story for thecontributions.

Because of the scandal, state agriculture officials canceled thecontract held Amusements of America to run the fair midway.Amusements of America, based in Monroe Township, N.J., sued thestate in return.

In July, Interim Agriculture Commissioner Britt Cobb awarded themidway contract to Strates Shows, which had provided the rides atthe fair for more than five decades before Amusements of Americatook over last year.

Phipps has been staying home with her family in Haw River since her resignation. She is due to surrender next week. The U.S. Attorney's Office released a statement, saying the investigation is still ongoing.

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