According to the Newspaper the picture alledgedly showing Phelps using a bong was taken at the University of South Carolina, Columbia at a student house party and it claimed a witness as saying
“You could tell Michael had smoked before. He grabbed the bong and a lighter and knew exactly what to do.
“He looked just as natural with a bong in his hands as he does swimming in the pool. He was the gold medal winner of bong hits. Michael ended up getting a little paranoid, though, because before too long he looked like he was nervous and ran out of the place.”
If true not a good move by Phelps, but given his age and reputation I can't see any long term damage. With the right marketing a redeemed character is even more compelling than the boy next door story.....