Meg Scott Phipps and the Fair Scandal: Riding the Roller Coaster To Prison

Updated July 8, 2009

A bankruptcy lawyer, daughter and granddaughter of former Governors (Bob Scott and Kerr Scott, who incidentally thrived in the days when bags of cash were common), Meg Scott Phipps left her job as an Administrative Law Judge to run for Agriculture Commissioner in 2000 upon Jim Graham’s retirement. With a family name, a female gender and a 2-1 money advantage, Scott eked out a win over Republican Steve Troxler. Her reign as the sodfather’s successor would be short lived.

Midway Mess Up
Two months into her term, Phipps shook things up, appointing a committee to design a bidding process for the contract to run the State Fair, ending the 51-show monopoly of the James E. Strates Shows. Enter Rocky Mount developer and fair operator Norman Chambliss, who sought and won an appointment to the committee. During the Democratic primary, Chambliss funneled $75,000 into the campaign of Bobby McLamb, a country comedian and one time Hee Haw star.

After Scott won the primary, Chambliss and McLamb hopped aboard the Meg Scott Phipps express, raising money for her, and McLamb later became a top aide in the Agriculture Department. According to his own testimony to the State Board of Elections, Chambliss had been promised $50,000 from New Jersey’s Amusements of America if they got the fair contract. Phipps signed off on a deal he wrote, stating that "Amusements of America will hold the only midway contract for the 2002 State Fair . . . . [and] make all final decisions relating to carnival rides and concessions operations."

Following a lawsuit by the scorned Strates Shows (which was eventually settled for $50,000 from the state) and reports of questionable fundraising, the State Board of Elections concluded that Phipps illegally repaid $64,000 in McLamb’s campaign debt.

McLamb worked with Amusements of America to solicit and send thousands of dollars in contributions to Phipps. While serving on the committee awarding the fair contract, Chambliss gave Linda Saunders, another Phipps campaign worker who landed a job in the Agriculture Department, a $6500 check at her request from Amusements of America to help Phipps pay personal campaign loans. Saunders cashed it to hide the money’s source.

In total, carnival sources gave more than a quarter million dollars for Phipps’ campaign debt.

But the Commissioner’s claims that she didn’t know about campaign money never passed the smell test. The Board of Elections fined the Phipps campaign $130,000 for violating campaign finance rules, referring the case to the Wake County District Attorney.

Indictments
The whole bonfire of scandal, fueled by news stories about heavy contributions and lies by state fair contractors, couldn’t be contained.  One by one, Phipps staffers flipped, pleading guilty and singing to prosecutors.

• Agriculture Department aide Mike Blanton pled guilty to federal charges of witness tampering and conspiracy to obstruct justice. He was sentenced to one year in the federal penitentiary.
• Linda Saunders pled guilty to federal charges of mail fraud, money laundering and extortion. She served two months in a federal prison camp.
• Bobby McLamb pled guilty to federal counts of conspiracy to commit mail fraud and extortion. He was sentenced to sixteen months in the federal pen.
• Norman Chambliss pled guilty on federal obstruction of justice charges, and was lucky to get off with probation.

With aides copping pleas and the odor of corruption growing fouler, Governor Easley, North Carolina’s reigning paragon of ethical rectitude, called on Phipps to resign.  Protesting her innocence, she refused. But just a few short weeks later, she quit.

In July 2003, the state Indicted Phipps on five counts of obstructing justice and lying to the SBI during the Board of Elections probe. In October, the federal indictments on 28 charges followed. The News & Observer wrote, "The federal indictment accuses Phipps and her campaign of taking at least $20,000 in illegal cash payments from James H. Drew III, whose family company runs the midway at the Mountain State Fair near Asheville, and promising him afterward that the Georgia company would get the contract again. It also says her campaign took $10,000 in illegal cash payments from Amusements of America, the New Jersey company to which she awarded the 2002 and 2003 N.C. State Fair contracts."

Guilty, Guilty, Guilty
On the stand, Linda Saunders’ damning testimony sank Meg Scott Phipps. "She said I had to tell them that she didn't know anything, because that's what she had told them," Saunders said. It was no big surprise that the jury came in with a guilty verdict.

Phipps refused to testify in her own defense. Yet on the way to her sentencing hearing, Phipps remarked to the press, "My side of the story has never been told."

In November 2003,Phipps pled guilty on five federal counts of conspiracy, mail fraud and extortion and received a four year sentence. Her state sentence of a year and a half ran concurrently. She served time with Martha Stewart and was released in 2007, still maintaining she never had a chance to tell her story.

Almost immediately upon her release, Meg Scott Phipps went back on the public payroll as a history teacher at Alamance Community College.

Once, in ruling against Wake County’s plan to build a landfill, then-Judge Phipps declared, "The question is who gets screwed by [the changes], and I don't think it should be the citizens,"(News & Observer, 9/2/99).

But when she sold her office, North Carolina's citizens certainly were.