Hearings starting for ag commissioner

Board to review campaign finance

Staff WriterJune 5, 2002 

The next three days could be very important for state Agriculture Commissioner Meg Scott Phipps.

The State Board of Elections has set aside those days for hearings into allegations of campaign-finance violations by Phipps and one of her former rivals.

Phipps, some of her top aides and others are expected to testify under oath about issues such as contributions from the carnival industry and questions about whether Phipps has helped retire the debt of one of her opponents.

For Phipps, 46, the latest member of an influential political family to hold office in North Carolina, it could be the final scene in a run of incidents that have scarred her initial months in office. Or it could lead to a criminal investigation that would keep her problems alive for months.

"This is a hugely significant event for her," said Michael Crowell, an attorney representing Phipps. "It's going to determine what people think about her and what her campaign did."

Crowell made those statements during a conference call Tuesday with the Board of Elections. Crowell was seeking a delay in the hearings. He said that one of Phipps' attorneys, Roger Smith Sr., has been unable to prepare for the hearings because of family health matters. He also said that Phipps' father, former Gov. Bob Scott, is in the hospital and will not be able to testify about his role in his daughter's campaign.

Scott, 72, is in Duke Hospital's intensive care unit, with congestive heart failure and possibly pneumonia, a spokesman said Tuesday. At his family's request, the hospital would not release information on his condition.

"I think we're going to be at a serious disadvantage if this goes ahead," Crowell said.

But the board, with one member absent, voted unanimously to hold the hearings as scheduled, beginning today.

Larry Leake, an Asheville lawyer who is chairman of the elections board, told Crowell that the board will conduct a fair and impartial investigation.

When she took office in January 2001, Phipps extended a tradition for the Scotts, a farming clan from Haw River that made politics a family vocation. Her father, Bob Scott, and grandfather, Kerr Scott, both served as governor of North Carolina. Her great-uncle, Ralph Scott, was a longtime power in the legislature.

But Phipps' victory was a costly one. To pay for her campaign, she and her husband, Robert E. Phipps Jr., went into debt by more than $500,000. Phipps also relied heavily on contributions from the carnival industry.

The agricul-ture commissioner is charged with selecting the midway operator at the State Fair.

Since taking office, those contributions have led to questions about her selection of a new midway operator and her association with Bobby McLamb, a former political rival who helped her navigate the carnival industry after he joined her campaign. She also has been accused of shortchanging the state for almost $10,000 for the use of a state vehicle and criticized for her choice of a company to build and operate a cable lift ride at the fair.

So many questions have been raised about Phipps' dealings with the carnival industry that it's not clear exactly what direction the elections board hearings will take.

The elections board has not elaborated on specific violations it is investigating but has said that possible violations include contributions in excess of the legal limit of $4,000 per election and failure to report certain contributions and expenditures.

"There are, as you know, lots of people who are saying lots of things," Crowell said Tuesday about the difficulty of preparing for the hearing.

But it is Phipps' dealings with McLamb that are likely to be at the center of the hearings.

McLamb joined the Phipps campaign after losing to her in the 2000 Democratic primary. He raised more than $100,000 for her from the carnival industry.

Phipps then hired McLamb as an assistant commissioner, only to fire him a year later amid questions about their campaign finances.

The central question revolves around a claim by a political consultant who worked for the Phipps campaign that Phipps has helped to retire McLamb's campaign debt. If she did so, neither she nor McLamb disclosed it in campaign finance reports, as required by state election law.

If the hearings produce evidence of possible criminal violations, the board can refer them to state or federal authorities. Violations of election laws are misdemeanors.

But the legal issues are not Phipps' only concern. Although she declined to be interviewed for this report, Phipps has said repeatedly that she is eager to put the questions about the State Fair behind her so that she can deal with agricultural issues.

Some in the agricultural community, already having to adjust to a new commissioner, have worried that Phipps has been too distracted to address their concerns.

"They are concerned about that because they want to see her out there uninhibited so she could do her job freely," said state Sen. Charlie Albertson, a Duplin County Democrat who is chairman of the Senate Agriculture Committee.

Staff writer Bill Krueger can be reached at 829-4522 or bkrueger@newsobserver.com.

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