The State Board of Elections probe into alleged campaign-law violations by Agriculture Commissioner Meg Scott Phipps and a one-time political rival she later hired continued into a second day Thursday.
Among the revelations: Phipps' campaign created a fictitious organization dubbed "Republican Women for Meg" and mailed out a campaign flier under that group's name. Not only were there no Republican women, the flier didn't disclose who had paid for it, as required by law.
Phipps is a Democrat.
Rocky Mount businessman and county fair manager Norman Chambliss III --a major Phipps supporter and a Republican --testified that he and campaign treasurer Linda Saunders dreamed up the idea. Chambliss put his wife's name on the flier.
Sign Up and Save
Get six months of free digital access to The News & Observer
Elections board member Charles Winfree of Greensboro asked whether Chambliss knew of any other dirty tricks by the campaign. Chambliss, who was testifying under a grant of immunity by the board, replied that he didn't regard the flier as a dirty trick, since the original idea hadn't been to deceive anyone, but to actually put together such a group.
"An undisclosed letter from a non-existent organization?" Winfree said. "Doesn't that strike you as a little beyond the gray area?"
Chambliss detailed how he had borrowed $75,000 from a New Jersey-based carnival company, Amusements of America, and then loaned it to candidate Bobby McLamb to help McLamb pay for a last-minute blitz of campaign ads. McLamb had a personal loan being processed for that amount, but it was moving too slowly for the money to arrive in time.
Along with Phipps, McLamb is the other subject of the hearing.
After losing in the primary, McLamb joined Phipps' campaign, and after she won the general election, she hired him as an assistant commissioner. A one-time owner of a talent management company, McLamb had extensive ties in the fair industry and introduced Phipps to potential contributors in the business.
Chambliss, through McLamb, became close to Phipps, who eventually appointed him to a panel she had created to advise her which carnival companies to consider for the state fair.
Chambliss testified that he was close friends with the Vivona family, which owns Amusements of America. Phipps eventually awarded the contract to the Vivonas, but Chambliss said he thought that her decision was based on merit, rather than anything he might have done.
According to testimony by several witnesses, McLamb got the personal loan and paid Chambliss back. Phipps' campaign, in an apparent violation of state law, later helped pay off McLamb's loan. Chambliss also said that he had helped pay some of McLamb's debts.
Among those taking the stand Thursday was McLamb. He said when he received the loan from Chambliss -- written on Chambliss' company check --he didn't view it as a campaign contribution. He said he now understood the laws involved, including the law against accepting donations from companies. He said he wasn't originally sure that the Vivonas were behind the loan, but guessed they might be involved.
None of the witnesses so far has directly contradicted Phipps' assertion that she wasn't aware until recently that her campaign had helped pay off McLamb's debt. Phipps said she deliberately kept herself in the dark about her campaign's finances because she didn't want to feel that she owed favors to any donors.
Chambliss and McLamb reinforced testimony by other witnesses, who had said Phipps' close friend, assistant and campaign treasurer Linda Saunders had control of the campaign checkbook and campaign finance reports and was apparently responsible for many of the campaign violations. Phipps said Wednesday that she didn't think Saunders had intentionally done anything wrong.
Other problems that have come to light during the hearing include apparent violations by both campaigns of laws against: taking contributions from companies, accepting cash contributions of greater than $100, and taking contributions totalling more than $4,000 from any donor in an election cycle.
The hearing is scheduled to resume today and is expected to include testimony from Saunders. She declined to comment Thursday other than to say that she was looking forward to airing her side of the story.