So reports the Raleigh News & Observer. The issue apparently involves a large settlement paid by the party to a staffer that had been fired after complaining about being harassed by their supervisor.

How bad are we talking? Real bad:

“If this hits the media, the Democratic Party, our candidates and our credibility are doomed in this election,” wrote [Party Chairman David] Jones, according to a copy obtained by The News & Observer.

Update: In a related development, Jay Parmley, the executive director of the North Carolina Democratic Party, resigned Sunday.