“Resigning your office at this time is in the best interest of our agriculture industry and thousands of farm families around the state,” Easley wrote. The governor also spoke by phone with Phipps. Phipps, on a tour of farms in western North Carolina, says she will not resign. Both Phipps and Easley are Democrats.

Phipps’ 2000 campaign continues to be under investigation. Phipps, who succeeded long-time Ag Commissioner Jim Graham, who retired, said she intends to complete her term and run for re-election.

“I respect Governor Easley,” she said in a statement, issued through her attorney. “I was elected by the people of North Carolina and I will let the people decide.”

In published reports, Phipps called Easley’s letter unfair and inappropriately timed, calling it “just politics.”

Easley spoke out a day after Phipps’ former campaign manager, Linda Saunders, pleaded guilty in federal court. She admitted to six felonies, including extortion by a public official, conspiracy to commit mail fraud, money laundering and other charges.

In March, Bobby McLamb, a former assistant commissioner and campaign aide, pleaded guilty to two counts of extortion by a public official and conspiracy to commit mail fraud. McLamb threw his support behind Phipps after he lost to her in the primary.

Sanders and McLamb agreed to cooperate with federal and state investigations into Phipps campaign finances and the handling of the midway contract for the State Fair. Phipps has not been indicted. Prosecutors say more indictments are possible.

“The ongoing criminal investigation impairs your ability to manage the Department of Agriculture,” Easley wrote. Although Easley is governor, he has no leverage over Phipps, who is not a member of his Cabinet.

But the investigation into her campaign appears to be expanding. U.S. Attorney Frank Whitney said the investigation “is just getting a head of steam.”

The chairwoman of the state Democratic said Phipps should “seriously consider” Easley’s suggestion.

Former Gov. Jim Hunt said the troubles make it difficult for Phipps to represent agriculture interests in the state.

Others say she’s done a good job and that calls for her resignation are premature.

Rep. Dewey Hill, chairman of the House Agriculture Committee, however, said Phipps can’t do her job while involved in the legal problems she faces.

e-mail: cyancy@primediabusiness.com