SUIT CLAIMS COVER-UP IN CHATHAM

PITTSBORO - Documents filed Wednesday in Chatham County Superior Court
allege that top sheriff's officials tried to conceal the theft of 5,000
pounds of marijuana from the department in September 2000 and later fired a
sergeant who helped notify the FBI.

In November 2000, Dan Phillips took an informant to Asheboro to tell FBI
officials about the missing marijuana, sparking a federal investigation.
Phillips was fired two months later.

In his lawsuit, Phillips alleges that Ike Gray waited until he was
appointed Chatham County sheriff a year ago 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
midterm because of poor health.

Reached at home Wednesday evening, Phillips said he preferred not to
comment. "I don't want to draw attention to myself," he said. "I'm a sworn
officer of the law, and I upheld my duty. I felt like all along in my heart
I did the right thing. I love Chatham County, and I hate that it had to
happen like this."

Gray did not return messages left at his office and could not be reached
Wednesday for comment.

Phillips' original lawsuit, filed in February, alleges that Gray fired him
because the sergeant knew about racist incidents at Chatham Central High
School. Phillips claims that when he was the high school's resource officer
in 1999 and 2000, then-Principal William "Buddy" Fowler made several racist
remarks and ignored racist graffiti found in a bathroom. The suit alleges
also that some of Fowler's comments were tape-recorded by an unknown person
and Phillips was blamed.

The suit contends that school officials didn't report the racially charged
episodes to the federal Office of Civil Rights, which was investigating
allegations of racial discrimination in the school system. In the amended
lawsuit filed Wednesday, Phillips adds Chief Deputy Randy Keck as a second
defendant and claims that, in addition to the school incident, he was fired
for helping report the sheriff's department to the FBI after 3,000 pounds
of marijuana evidence was stolen from a surplus Army truck parked behind
the department, and 2,000 pounds was unearthed from a shallow hole at the
county landfill. The drugs had been seized in February 2000 during an
undercover sting at a barn southwest of Siler City.

Phillips also 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. Keck is away from work this
week and also could not be reached for comment.

Phillips' attorney, Al McSurely of Chapel Hill, said his client can't be
fired for trying to enforce the law. During the discovery period for the
original lawsuit, he said, it became apparent that Phillips was fired also
because he knew too much about the missing marijuana.

According to the lawsuit, the marijuana cover-up unfolded like this:

On Sept. 28, 2000, Keck, then a narcotics unit lieutenant for the sheriff's
department, drove the truck to the landfill and discovered that
three-fifths of the marijuana was missing from the truck. He returned to
the department and told Gray and Whitt, who agreed not to reveal to anyone,
other than the FBI, that the marijuana had been stolen. That same day, Keck
told the FBI that some of the marijuana was missing but didn't request an
investigation.

Gray has told The News & Observer that he requested an investigation
immediately.

Later that day, Keck returned to the landfill and parked the truck next to
a hole that a county landfill employee had prepared with a backhoe,
according to the complaint. He then took samples of the bales of marijuana
and placed them in evidence bags.

When Keck began unloading the marijuana into the hole, a member of his
narcotics unit said they should pour diesel fuel over the bales and burn
the evidence, according to the lawsuit. Instead, Keck insisted they simply
bury it in the hole, which was 4 feet deep. Department regulations require
that such evidence be destroyed.

On Nov. 22, 2000, Phillips received a call from an informant who said the
2,000 pounds of marijuana buried at the landfill had been stolen, according
to the lawsuit. The informant said he had called Keck about the crime, but
the narcotics officer had said he was too busy to talk to him, was going on
vacation and would call him back, but he never did.

According to the lawsuit, "In one conversation, Lt. Keck told the informant
that the informant should not worry about the marijuana that had been dug
up because 'we had put something on it that would make people sick.' The
informant told Lt. Keck, 'It ain't made nobody sick yet.' "

Five days later, Phillips and Officer Robert Lefler of the state Division
of Motor Vehicles took the informant to meet with FBI agents in Asheboro.
The informant told federal officials that the marijuana had been removed
from the landfill and was being sold in Chatham County.

Phillips asked the federal agents whether he should report this information
to his superiors at the sheriff's department, and the agents said no,
according to the lawsuit. At that time, the agents said the FBI would
initiate an investigation into the department.

Before he retired Nov. 30, 2000, Whitt told Gray about Phillips' trip to
visit federal agents with an informant, the lawsuit says.

On Dec. 4, 2000, the Chatham commissioners, who did not know about the
stolen marijuana, appointed Gray interim sheriff until the next election in
2002. That same day, Gray appointed Keck chief deputy. Neither Gray nor
Keck initiated an internal investigation into the missing marijuana after
being sworn in. But the investigation continued into whether Phillips had
made the tape of Fowler, the former Chatham Central principal.

Sometime in late 2000, Keck told an FBI agent he was going to fire one or
two of his deputies for being dishonest in an internal investigation about
a tape made of a school principal, according to the lawsuit. On Jan. 18,
Gray dismissed Phillips, refusing to say why.

The lawsuit filed Wednesday alleges 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.

According to the complaint, Gray and Keck believed Phillips had helped to
initiate a criminal investigation by the FBI into the stolen marijuana,
threatening their plans "to keep those facts quiet until they had been
promoted and had time to consolidate their new authority."

No arrests have been made in connection with the marijuana thefts.