Phipps is an Arachnos agent, working in the role of a 'crusader for the downtrodden' and using that position to pass information back to Arachnos. His arcs span levels 40 to 45, and he can be found in the Grandville zone.
Other contacts have sent you on missions for money or status, but Phipps wants to crush hopes and dreams. He sends you to poison shipments of food, donated by Paragon City for the needy of the Rogue Isles; two girls go blind after eating it, and the implied fate for them and their mother is deeply sinister. You destroy schoolbooks, which might have helped the oppressed Grandville populace get a rudimentary education. In one of the most original encounters in the game, you crush an entire group of minor superheroes, the Civic Squad, whose numbers increase depending on how many accomplices you bring. You discover that a family who had sought refuge in Phipps's Haven House have been mutated into Arachnoids, who Phipps sends you to exterminate without bothering to mention their origin.
And all the time, Phipps is calling you a monster for doing it. Although he's only keeping up appearances and privately gloats with you over your deeds, Phipps is the only person who ever throws your own villainy back in your face. He not only makes you do monstrous things, he tells you that you are monstrous for doing them; and that's what makes him so hard to stomach.
His most infamous arc is Miss Francine the Freakshow Teacher, a tale in the familiar Inspirational Schoolteacher mould made all the more poignant by the comedy of Freaks sitting in a classroom learning to read and write. Your role is to come in and ruin it all, eventually capturing Miss Francine herself and delivering her into Arachnos custody, knowing she'll be tortured and brainwashed.
You do, however, have the option to fail the final mission by letting the timer run out. This ingenious use of the mission 'failure' mechanics allows for a quite different ending to the story. The alternate souvenir acknowledges you may have let Francine escape on purpose rather than 'failing', and hints that there is still hope even for a villain like yourself. This, of course, just emphasises your villainy all the more; by affirming that you can choose to avoid evil, it makes all your previous deeds entirely your own choice, and your responsibility.
Phipps is an understated masterpiece of content writing. Don't miss his arcs and missions, but be aware of what they contain. Many players prize them as some of the only villainous roleplaying experiences worthy of the name in CoV, but some have found them upsetting, depressing or uncomfortable to play.
Is Phipps too evil? Judge for yourself.