Here's why: Phipps is collecting campaign contributions at a furious clip from the carnival companies and concessionaires who work--or want to work--at the fair. The money flows through Phipps' political committee and a lot of it winds up in her husband's accounts. Robert Phipps then uses it to repay a mortgage the couple took out to finance her campaign. It's legal, but it looks terrible, especially for a reformer and small-farm advocate who professes to believe in campaign finance reform.
So when Phipps recently dumped Strates Shows as the fair's midway operator--the company that controls the concessions and the rides--and picked a different midway company instead, she wanted it to be seen as reform. But that view was obscured by the blizzard of cash floating down to her from addresses in Florida, New Jersey, New York and across the land.
In 2001, her first year in office, Phipps raised about $288,000, and $154,500 came from contributors identified in her campaign finance reports as "food vendors," "concessionaires" and "carnival owners." Almost all her carny money came from out-of-state addresses, mainly in Florida, and every out-of-state check was for a round number: $1,000, $2,000, $3,000 or $4,000.
Also in 2001, the Phipps committee made loan repayments to Robert Phipps totaling $108,200, reducing a debt owed to him at the end of the 2000 campaign of $507,000, according to the reports.
"This is normal campaign practice," Phipps, daughter of former Gov. Bob Scott, said in a brief telephone interview last week. "Lots of candidates" lend themselves money and get it back from contributors if they win, she added.
She said her political consultants told her she needed to spend $1 million to win the commissioner's job. But she could only raise half that amount before November 2000. So she and her husband mortgaged their farm and loaned the campaign the other half.
It's not clear that Phipps actually needed the $1.1 million she spent. Her Republican opponent, Steve Troxler, spent only $22,400, according to his reports. She defeated him with 51 percent of the vote. In a four-way Democratic primary, Phipps was an easy winner over runner-up Graham Boyd, who spent $71,600.
What's most troubling, though, is Phipps' practice of paying for the campaign after the fact by soliciting folks who want "joints" (booths) at the fair and know that the route now goes through her. She insists that she's "not rich" and, even if it looks bad, she can't afford to pay off the mortgage loan without hitting up concessionaires. But what if she'd lost?
Or, what if campaign finance reform were enacted, and state officials were barred from taking money from people who gain or lose by the decisions they make? How would she pay the mortgage then?
"I would love to have campaign finance reform," she says with some exasperation. "It would suit me just fine."
Mike Blanton, Phipps' spokesperson, says that because of "the messiness and the appearance of impropriety involved," Phipps is willing to stop taking concessionaires' money just as soon as the state enacts a law that would bar all candidates for the ag commissioner's job from taking it. Either that, he says, or she'll stop when the state enacts a comprehensive campaign reform law like the proposed Voter-Owned Elections Act and public funding is available to candidates who decline other money.
Phipps is not willing, however, to set the example, even though she's the incumbent ag commissioner and thus the only candidate with an active campaign committee right now. She won't, Blanton says, not out of any principle, but because her family needs their money back.
Other officials do much the same thing, Blanton argues. Look at the insurance commissioner (Jim Long), whose contributions come mainly from the insurance companies he regulates. Or the attorney general (Roy Cooper), whose money comes from lawyers.
"It's unfortunate," Blanton says, "but because of the refusal of our officials to enact campaign finance reform, you're almost forced as a candidate to accept contributions from anyone who's willing to give them."
Phipps' posture pains some of her friends in farm circles who do indeed regard her as a reformer--someone willing to take the side of the small growers against the forces of big agribusiness. "She's done an excellent job for small farmers and farmers seeking fairness in the marketplace," says Betty Bailey, executive director of the Pittsboro-based Rural Advancement Foundation International (RAFI). "She's a fresh breath of air for that department."
Bailey credits Phipps for backing legislation to enhance the bargaining power of contract growers, which puts her squarely at odds with powerful poultry and hog industry "intergrators" like Perdue and Smithfield Farms. Her predecessor for 36 years, Jim ("the Sodfather") Graham, was on the intergrators' side.
Phipps got North Carolina out in front of other states on emergency preparedness, starting with the threat of hoof-in-mouth disease, Bailey says. And despite the state's fiscal crisis, which resulted in cuts to her department, she's found money--mainly federal funds--to follow through on her campaign promises: counselors to advise farmers in financial straits, and "incubator programs" for growers, including tobacco farmers, to try out new cash crops.
Even with the state fair, Phipps opened up the process of picking the midway company after 53 consecutive years that Strates Shows had the assignment. Graham liked Strates and never considered anyone else.
Phipps put an advisory committee together, took applications from 11 carnival companies, and after the committee winnowed the field to three, picked Amusements of America, a New Jersey-based company, over Strates, which is based in Florida, and Farrow Amusements out of Jackson, Miss.
The three were practically indistinguishable, judging from the materials they submitted. All do multiple, major fairs around the country--Amusements does the Ohio State Fair, for example, Farrow the Indiana and Kansas fairs, Strates the New York State Fair--and all were required by Phipps to give the state 40 percent of their revenues, up from the 35 percent Strates paid for most of its run here. Recently, Strates had been paying 38 percent, according to Blanton, but 40 percent is the industry standard.
Blanton says Phipps picked Amusements because it will supply more rides than Strates, expand "Kiddieland," and in numerous small ways bring new ideas to what during the Graham-Strates era became "a stagnant fair."
Phipps knew, of course, that if she meant to replace Strates, she needed to be seen as doing it for the right reasons, and not as a way of stoking up her campaign contributions.
If she didn't know that before the election, she got the message loud and clear right afterward: Somebody not well-disposed toward her leaked the information that she'd traveled during the campaign to the Ohio State Fair, courtesy of a Rocky Mount friend of the Vivona family, which owns and operates Amusements of America. (Amusements runs the midway at the Pitt County Fair, the biggest one in eastern North Carolina.)
The News & Observer reported that the Vivonas treated her to dinner in Ohio, "honored" her with a reception and gave her $10,500 in contributions. Phipps had failed to report her travel expenses as a campaign contribution, as required, the newspaper said.
If that wasn't enough, The N&O added, Phipps had found an assistant commissioner's job for Bobby McLamb, a carnival comic and talent agent who ran last in the Democratic primary but thereafter joined her general election campaign, getting Phipps in solid with the carny crowd. "Bobby raised over $100,000 and connected me with the fair industry who became field workers," Phipps had written in an e-mail to another, anonymous campaign aide who, clearly, had not been as well-rewarded. Phipps forced McLamb to resign last week, the final act in the sideshow over whether Phipps, as commissioner, or the state Board of Agriculture has the final say about who runs the state fair. Phipps does, according to the attorney general's office. But McLamb had to go because he was "not a good fit," Blanton said.Blanton would like it to be known that, since Phipps accepted far more money from Strates and related, Florida-based vendors, than from Amusements, "No one can say that the state fair was for sale." He said Strates, including concessionaires closely allied with it, contributed about $90,000, while Amusements contributed only $14,000.
Phipps' campaign reports don't identify the contributors as linked to one midway company or another, so it's possible those figures are low, Blanton concedes.