Local News

Latest Sentences Mark End Of Phipps Campaign Finance Scandal

Posted October 19, 2004 5:06 a.m. EDT

— Three men charged in connection with the campaign scandal that brought down former state Agriculture Commissioner Meg Scott Phipps were fined and sentenced to probation in federal court Tuesday.

In addition, two of the three were ordered to undergo house arrest.

The sentences ended the federal investigation of the state Agriculture Department, said U.S. Attorney Frank Whitney, adding that expects no more criminal charges.

"We believe this is the most successful public corruption prosecution in North Carolina history," Whitney said.

Norman Chambliss, who pleaded guilty in April in federal court to obstructing justice in connection with the N.C. State Fair scandal that toppled Phipps, received the most severe sentence -- six months of house arrest and two years of probation, plus a $20,000 fine.

Morris Vivona Jr., general manager of Amusements of America, was sentenced to two years of probation and five months of house arrest and fined $3,000. He had pleaded guilty in June to a felony charge of obstructing justice.

Chambliss had also admitted that he convinced Vivona to lie to investigators.

Former Deputy Agriculture Commissioner Weldon Denny, who pleaded guilty to lying to the FBI, was sentenced to one year probation and fined $2,000.

The men apologized in court. "I made a terrible mistake, and I've spent many sleepless nights over this," Denny said.

"When you work as a public official, you hold the public's trust," Whitney said. "That puts an additional burden on you to make sure you are honoring the service to the public."

Assistant U.S. Attorney Dennis Duffy pointed out that in each case, the men didn't lie just once to investigators, but lied repeatedly.

In addition, U.S. District Court Judge Malcolm Howard reduced the sentence for Bobby McLamb, a former assistant agriculture commissioner.

McLamb pleaded guilty to one count of conspiracy to commit mail or wire fraud and one count of extortion and was sentenced in March to 16 months in prison.

Howard reduced his sentence to one year and one day, which means McLamb will be released in January instead of April, his attorney said. Howard reduced the sentence after a prosecutor said McLamb continued to help investigators after he was sentenced.

Phipps, a Democrat elected in 2000, is serving four years in federal prison on charges of extortion, conspiracy and mail fraud. Phipps, the daughter and granddaughter of former governors, also was convicted of state charges of perjury and obstructing justice.

Whitney said seven people, five of them high-ranking state officials were convicted of felonies. In addition, Amusements of America has entered into a corporate compliance agreement that allows the company to avoid any possible prosecution for any potential offenses for 18 months. In exchange, the company must institute an ethics program or a training program on how to solicit government contracts.

The company also will pay $25,000 to the government.

All of Phipps' convictions relate to her attempt to cover up illegal cash contributions from vendors seeking work at the North Carolina State Fair, which she oversaw.

Chambliss' role in the scam stemmed from his long-standing relationship with Amusements of America, a midway company that operated at the Chambliss-owned Rocky Mount Fair.

Chambliss admitted in court that New Jersey-based Amusements of America offered him $50,000 and an all-expenses paid cruise for two if Chambliss helped the company secure the rights to run the midway at the N.C. State Fair.

Court records showed Chambliss arranged a meeting in Ohio between Phipps and Amusements of America representatives, during which Phipps received an illegal cash payment of $6,000, one of several payments Phipps received for handing out concession contracts.

Phipps awarded the N.C. State Fair contract to Amusements of America in 2002.

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