Phipps Released Without Bond Following Indictment

Phipps arrived with her husband and lawyers at the Wake County magistrate's office around 12:30 p.m.

Phipps was indicted by a state grand jury Tuesday on charges thatshe doctored evidence and then lied under oath to the State Boardof Elections about paying off an assistant's debts.

Phipps was photographed, fingerprinted and processed by the magistrate. The former commissioner was then freed without bond.

Phipps declined to comment, but her attorneys expressed the sadness and embarrassment she feels.

"Yes, she feels very badly that her hopes and dreams came to this," said Roger Smith, Phipps' attorney.

"Meg realizes that things got out of control," said Wade Smith, Phipps' attorney.

Wake County District Attorney Colon Willoughby is in charge ofthe case and will personally prosecute Phipps in state court.

Willoughby said the stategrand jury would continue receiving information on the case whilethe joint state-federal investigation proceeds.

Smith said Tuesday that he hoped federal prosecutors wouldnot seek an indictment against his client.

"We don't know what impact the state indictment will have, ifany, on the ongoing federal investigation. We had hoped that shewouldn't be indicted in state court and we continue to hope thatshe won't be indicted in federal court," Smith said.

The five-count indictment says Phipps alsoencouraged and helped her close friend and campaign treasurer LindaSaunders to lie to the elections board, which was investigating thepayments.

Saunders and Bobby McLamb havealready pleaded guilty in federal court to extortion charges. Theyhave not yet been sentenced. Former Deputy Commissioner MikeBlanton has been charged with perjury and other federal charges.

Phipps resigned June 6, the same day a federal grand juryindicted Blanton.

The perjury charges against Phipps could lead to a prison termranging from 2 1/2 years to seven years. But with no prior recordand under the state's structure sentencing rules, the charges wouldprobably bring no active prison term.

The indictments allege that Phipps lied when she testifiedduring an elections hearing last June that she was unaware ofpayments her campaign made to pay off the debt of McLamb, a formerelection rival as well as an aide.

The obstruction of justice charges relate to allegations thatPhipps altered campaign donation checks to conceal illegal paymentsto McLamb's campaign.

Last week, interim Agriculture Commissioner Britt Cobb voidedthe contract Phipps signed with Amusements of America. Stateattorneys recommended the action to "remove any doubt about themidway contract being procured by favoritism," according to anadvisory letter to Cobb.