Phipps tied to carnival deal (8/03/2002)

Company paid despite state veto

Staff WritersAugust 3, 2002 

The state Department of Agriculture tried this year to give a three-year, $198,600 consulting contract to a carnival consulting company whose president made illegal cash contributions last year to the campaign of Agriculture Commissioner Meg Scott Phipps.

After a state purchasing official vetoed the sole-source contract with Fair Management Inc. of Rockledge, Fla., the department allowed the company and its president, Robin Turner, to work without a contract and without permission from the governor, both required by state law.

Before finally dropping the plan, the department made the first payment of $5,300 to Turner's company. North Carolina law holds that state employees who authorize illegal expenditures shall be personally liable for repayment.

The payment is the latest in a string of problems for Phipps. After a three-day hearing in June, the State Board of Elections ordered Phipps to pay $130,123.10 in fines for illegal campaign contributions. Her campaign is the subject of state and federal investigations.

Interviews with state officials and a review of hearing transcripts, e-mail messages, memos and other documents reveal another case where campaign finance and the State Fair intersect to create political problems for Phipps.

State agriculture officials put the blame for Turner's troubled consulting job on Bobby McLamb, one of Phipps' top aides and political supporters until she fired him in January.

"Bobby put him to work," Deputy Commissioner Weldon Denny said in an interview this week. "It was his man, his deal."

But the deal had the full support of Phipps. She requested the sole- source contract in a Jan. 16 letter. After it was rejected, and after Phipps fired McLamb, she met with Turner, state fair manager Wesley Wyatt and spokesman Mike Blanton in February. At that meeting, Phipps repeated her support for Turner and said she wanted to keep working with him, Wyatt and Blanton said.

McLamb and Turner did not return phone calls this week. Phipps, as she has since the hearing, declined to speak with The News & Observer.

Talent broker

Turner was brought into the State Fair picture through McLamb, a country comedian and talent broker who lost to Phipps in the Democratic primary. In February 2000, Turner held a fund-raiser for McLamb in Florida.

After losing the primary, McLamb joined Phipps' campaign and raised well over $100,000 for her through his carnival connections. Phipps rewarded McLamb with an $80,000 job.

To win the campaign, Phipps and her family borrowed $518,000. Paying the debt became a big priority for Phipps and her campaign manager, Linda Saunders, who works as a special assistant to Phipps with a salary of $68,111.

Talks about Turner began as early as June 2001 when Turner dined in New York with McLamb and Saunders, who both traveled at state expense to visit a Long Island fair.

Turner testified that Saunders offered him the plum job of independent midway manager for the 2002 fair. Turner, who owns no rides or equipment, would act as a broker, bringing in a variety of ride owners and concessionaires.

Turner testified that he planned to use the job to retire Phipps' campaign debt: "The way I had planned is just like Strates did and say, 'OK; we're the concessionaires. We've got to support the commissioner. If you're going to play this fair, you need to support the commissioner.' But it would be limited to, you know, $4,000 checks or money orders or whatever at the time."

Turner was referring to E. James Strates, the head of Strates Shows, who helped raise more than $150,000 for Phipps in 2001 from his family and his concessionaires. Strates Shows held the midway contract for 53 years.

Two months after the New York dinner, Turner attended a fund-raiser for Phipps in Hickory. Testifying under immunity at the hearing, Turner said he gave Saunders $8,000 in cash at the event.

Saunders later testified that Turner had perjured himself about the size of the contribution. She said Turner and his wife gave her a box with $22,000 in cash.

Saunders testified that she gave the cash to McLamb to pay debt from his campaign.

In November, Phipps decided not to hire Turner as an independent midway contractor, opting to contract with a New Jersey company. Instead, Phipps announced she would hire Turner as a consultant.

Turner then drafted a contract for $4,000 a month plus $1,300 per day spent in Raleigh. Wyatt, the fair manager, in turn, asked for "accelerated" approval of the contract.

On Jan. 16, Phipps wrote a letter to the state Division of Purchase and Contract asking that Turner be hired without a competitive bid. "We know of no other consulting firms with the appropriate abilities nor anyone within state government," she wrote.

That was promptly turned down by Mildred Christmas, a state purchasing officer. "There were too many vendors across the nation," Christmas said in an interview. "I did not feel Fair Management was the only vendor that could provide it."

Started work

This setback did not stop Turner from starting work. Turner flew up from Florida and toured the fairgrounds Feb. 1 and 2.

This was two days after Phipps sacked McLamb. But the firing did not derail the department's bid to hire Turner.

Phipps met with Turner and reiterated her commitment to hire him, according to Phipps' fair manager and spokesman.

Turner billed the State Fair $5,300 for this trip: $1,300 for going to Raleigh, the rest for work he planned to do in March or April.

Meanwhile, the department put the job up for competitive bid. On April 3, the day the bids were opened, the department paid Turner, despite no contract or approval from the governor.

Wyatt said he paid Turner after consulting with Denny. The deputy commissioner confirms that account.

"He asked me, 'Should I pay him or not pay him?' " Denny said. "And I said, 'Wesley, the best thing as I know to do is pay him for what he's done and stop.' And that's what he did."

For $5,300, Turner produced two pages of rental rates at other fairgrounds and three drawings on tracing paper roughing out his ideas for the fairgrounds. The department did not keep the drawings or copies.

When the bids were opened, Turner was the only bidder. Wyatt recommended that the contract be awarded, but Denny and other agriculture officials eventually scotched it, citing the state budget crisis and the possible perception of a spendthrift department.

Ultimate responsibility

The contract would have been paid from fair receipts, not the state's general fund. Still, it needed approval of state budget officer David McCoy, who had earlier ordered all state agencies to confine spending to mandatory items such as salaries, utilities, food and drugs.

McCoy could not say whether he would have approved it without seeing the file. But he was certain who must enforce the law requiring the governor's approval of consulting contracts and the law holding state employees liable for unlawful disbursements.

"The people of North Carolina elected in this particular instance Meg to the office, and they said that 'We're putting you in charge of the Department of Agriculture,' " McCoy said. "As the agency head, she is responsible for seeing to it that all of the employees in that agency comply with the law -- it's her responsibility."

Staff writer Joseph Neff can be reached at 829-4516 or jneff@newsobserver.com.

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