STOLEN MARIJUANA INCIDENT ADDED TO EX-DEPUTY'S LAWSUIT

PITTSBORO - A Chatham County judge granted motions Monday morning to amend
a year-old lawsuit filed by a former deputy who says the sheriff fired him
for alerting the FBI that 5,000 pounds of marijuana evidence had been
stolen in September 2000.

In his original lawsuit, former Sgt. Dan Phillips said that Sheriff Ike
Gray fired him for making a tape of a former high school principal making
racial slurs. Judge Wade Barber expanded the case Monday to include the
marijuana incident, forcing the sheriff and his chief deputy to answer
questions about the stolen drugs in depositions this month.

Their testimony might shed light on the marijuana theft -- 3,000 pounds
from a surplus Army truck parked behind the department, and the remaining
2,000 pounds from a shallow pit at the county landfill. The drugs had been
seized in February 2000 during an undercover sting at a barn southwest of
Siler City.

No arrests have been made in connection with the marijuana thefts, but at a
news conference two weeks ago, Gray said he expected some soon.

Barber also allowed Chief Deputy Randy Keck to be added as a defendant in
his official capacity. Phillips contends that Keck ignored an informant who
tried to tell him the marijuana buried at the landfill had been stolen. In
November 2000, Phillips took the informant to Asheboro to meet with FBI
officials, sparking a federal investigation. Gray fired Phillips two months
later.

Gray has not commented about the lawsuit, but one of his attorneys, Chris
Jones, said Gray fired Phillips because he refused to take a polygraph test
to determine whether he had made a tape of William "Buddy" Fowler, the
former Chatham Central High School principal, making racial slurs.
Phillips, Jones said, threatened to damage the sheriff's political standing
in the county.

"Sheriff Gray's motive was nothing more than to fire an employee who was
insubordinate and threatened the department with a meritless lawsuit,"
Jones said.

Gray's lead attorney, Todd Sullivan, agreed to file an answer to the
amended complaint within a week, and Barber insisted the depositions be
completed within 30 days. A July 8 trial date is being considered.

Sullivan said Monday that the amended lawsuit should not be accepted
because Phillip's attorney, Al McSurely, improperly delayed filing it.
McSurely, Sullivan said, knew about Phillips' visit with federal agents at
the time the original lawsuit was filed and should have listed it as part
of the lawsuit then.

Pointing at a 25-pound box of paperwork, Sullivan said, "This is a
brand-new case if you want to allege that Mr. Phillips was terminated ...
because he met with an informant."

McSurely responded that he didn't have enough evidence to do so until Gray
admitted he knew before firing Phillips that the sergeant had turned in the
department to the FBI. Also, the case had been tied up in federal court for
six months before being remanded to state court, and McSurely said he filed
the amendment as soon after that as he could.

Citing a continuing FBI investigation into the missing marijuana and the
difficulty Gray and Keck have had concentrating on their jobs, Sullivan
requested that evidence in the case be sealed to keep it out of the media.
Barber denied the request, saying he would reconsider his decision if
someone from the FBI objected.

Leaving the Chatham County courthouse Monday, Phillips smiled and hugged
his wife. For his part, McSurely seemed prepared for the long road ahead.
"We still have many hurdles to climb," he said. "The theory of the case is
fairly creative and unique. The sheriff's department has almost unlimited
powers to hire and fire people."

The amended lawsuit contends that Gray and Keck fired Phillips because he
"refused to engage in two plans to cover up possible wrongdoing or criminal
activity," referring to the stolen marijuana and to the principal who
allegedly made racist remarks.

In the amended lawsuit, Phillips contends that Gray waited until he was
appointed Chatham County sheriff in December 2000 to tell county
commissioners about the marijuana, which had been missing for at least four
months. Gray, who was chief deputy before the promotion, replaced Don
Whitt, who retired in November 2000 because of poor health. On Jan. 18,
Gray dismissed Phillips, refusing to say why.

Phillips' original lawsuit, filed in February, says that Gray fired him
because the sergeant reported racist incidents at Chatham Central High
School. Phillips says that when he was the high school's resource officer
in 1999 and 2000, then-principal Fowler made several racist remarks and
ignored racist graffiti found in a bathroom.

Phillips had filed a motion to compel testimony from Gray and Keck, whose
attorneys kept them from answering questions regarding the marijuana
incident during depositions for the lawsuit, but the issue became academic
when Barber accepted the amended complaint.

On Friday, McSurely filed a new affidavit in the case, written by Siler
City Police Sgt. James Bowden. Then a task force agent with the Drug
Enforcement Administration, Bowden, who has said he's running this year for
sheriff, contends that:

a.. Deputies at the landfill told Keck to burn the marijuana with diesel
fuel, but Keck refused.

a.. Whitt, Gray and Keck threatened to fire those deputies if they told
anyone about the missing marijuana.

a.. There was no FBI investigation into the missing marijuana immediately
after it disappeared.