John A. Celona, left, answers questions from Scott D. Corrigan, center, lawyer for ex-CVS executive John Kramer. In the forground, former CVS executive Carlos Ortiz, center, is flanked by two lawyers. Judge Mary M. Lisi presides.

>

The Providence Journal / frank gerardi

PROVIDENCE –– Live, from federal court, it’s the Celona State House Report.

That was the theme yesterday as John A. Celona, corrupt ex-senator and erstwhile talk-show host, spent his fourth and final day on the witness stand in the CVS corruption trial, discussing his once-upon-a-time cable television show and its role in alleged bribery and influence-peddling at the Rhode Island State House.

Unlike his glory years, when Celona built the show he launched with a camcorder into a moneymaking forum for his political ambitions and private consulting venture, Celona didn’t get to choose the topics. Nor did he get to tout CVS or Blue Cross & Blue Shield of Rhode Island or Roger Williams Medical Center or an ambulance company or a cleaning service or a maintenance company, all paying clients.

The topics, defined by lawyers for defendants John R. “Jack” Kramer and Carlos Ortiz, were lies and taxes, crimes and cheating.

Kramer and Ortiz, former executives at CVS, are on trial on 23 counts of bribery, conspiracy and mail fraud for allegedly hiring Celona as a $1,000-a-month consultant from 2000 to 2003 to do the Woonsocket-based drugstore chain’s legislative bidding at the State House. The defense counters that Celona did legitimate community outreach, promoting CVS and its charitable endeavors to senior citizens and on the Celona State House Report.

Yesterday, Celona was confronted with evidence that he had cheated on his taxes, failed to correct those problems as promised in his plea agreement with prosecutors and lied to the authorities more times than he could remember.

And this time, Celona did not control the microphone. In halting, fumbling, at times combative testimony, the once-powerful Senate committee chairman had to be admonished by the judge to speak more directly into the microphone, answer the question or stop talking.

At one point, questioned about a letter from his accountant and copies of his tax returns, Celona asked Kramer’s lawyer, “May I ask how you got these?”

But Chief U.S. District Judge Mary M. Lisi shut him down.

“No,” she said curtly, “you may not.”

ON HIS THIRD DAY of cross-examination of Celona, Kramer’s lawyer, Scott D. Corrigan, spent a long time going through Celona’s plea agreement with the federal government and his federal tax returns.

In the summer of 2005, Celona pleaded guilty to selling his office to CVS, Blue Cross and Roger Williams Medical Center, and agreed to cooperate with the authorities in their State House corruption probe, Operation Dollar Bill. Under that agreement, he is testifying against Kramer and Ortiz.

In return, prosecutors agreed to recommend a 12-month reduction in his prison term and not charge him with other crimes, including tax evasion. Part of the deal, as highlighted by Corrigan, required Celona to correct his tax returns to report previously undisclosed income and pay all interest and penalties, and to do so prior to his sentencing.

Corrigan demanded to know whether Celona’s sentencing was delayed to give him time to comply. Celona replied that it was delayed several times, but disputed the reasons.

In November 2006, Celona filed tax returns that had been prepared by his accountant for 2003, 2004 and 2005. He had not filed the returns earlier, he testified, because his financial records had been seized by the Rhode Island State Police in March 2004.

Celona admitted that he used some campaign funds for personal expenses, but added that he later “corrected that” by reporting the expenses as previously undeclared income.

He also conceded that he never filed amended tax returns for 2001 and 2002, to reflect unreported income from those years, and that he has never reported $17,000 in income in 2001 from Healthlink for producing cable-access TV shows for the health group.

Additionally, Celona acknowledged that he reported $14,400 in unreported income from New England Ambulance in 2002 on his 2004 tax return. But he said he was following the advice of his accountant.

By reporting 2002 income as income in 2004, asked Corrigan, did Celona realize that he was escaping interest and penalties since the income was earned in an earlier year than he reported?

“Sir, I’m not an accountant,” replied Celona.

“You didn’t understand that by not reporting it . . . you were avoiding paying penalties?” asked Corrigan.

“I believe I paid penalties,” replied Celona.

And did Celona also understand that he was also avoiding paying interest? Corrigan persisted.

“I’m not a tax attorney,” said Celona. “I don’t understand how it works.”

Corrigan then showed Celona notices that he and his wife received from the Internal Revenue Service last year, saying that he had underpaid his 2003 taxes by $16,000 and also owed $11,000 in interest and penalties for that year plus another $3,200 in interest and penalties for 2004 and 2005.

Celona said that he was incarcerated when those notices arrived at his house. When Corrigan pressed him, Celona replied, “We paid what we thought we owed, then they sent us these bills and we paid them.”

So when Celona was finally sentenced to 2½ years in prison in January 2007, Corrigan asked, “You had not cleared up all your tax issues,” as promised in his plea agreement.

“To my knowledge, I had, until my wife received this (2007 notices from the IRS),” said Celona. “I made an honest effort.”

So at the time of his sentencing, Corrigan repeated, had his tax issues been cleared up?

“In my opinion, it was,” answered Celona.

“In your opinion, but in fact it was not,” said Corrigan.

Next, Corrigan turned to Celona’s prior statements to the FBI and federal prosecutors to highlight inconsistencies in his testimony on various points. Pointing to a prison interview in March of this year, Corrigan asked Celona, “Isn’t it true that you said you couldn’t remember all the lies you had told to the government?”

“I don’t know the exact wording . . . or terminology,” said Celona.

Corrigan showed him the government’s notes of the March meeting and asked, “You did not specifically remember which lies you told?”

Yes, Celona replied.

“In fact, didn’t you tell them that you didn’t want to lie to them about lying?”

“In other words, tell the truth? Is that the question?” asked Celona.

Corrigan also pointed to the notes that Celona asked Assistant U.S. Attorney Gerard B. Sullivan if he would be charged with lying, and Sullivan replied, not this time.

AFTER KRAMER’S LAWYER finished with Celona, Ortiz’s lawyer, Mark L. Smith, questioned the government’s star witness for 75 minutes.

Smith spent a lot of time asking Celona about a bill he sponsored in 2003 allowing pharmacies to accept prescriptions electronically.

Prior evidence has shown that Celona introduced the bill at the request of Ortiz and CVS lobbyist Joseph Walsh. But Smith tried to show that the legislation would benefit all pharmacies, not just CVS, and that Celona had come up with the idea on his own, after watching a presentation by Ortiz at a meeting at CVS headquarters of Celona’s Senate committee.

The meeting, Celona testified, was a routine “meet and greet” session that Celona arranged with numerous businesses as the Corporations Committee chairman.

Afterward, Assistant U.S. Attorney Stephen G. Dambruch sought to clear up a few points addressed by the defense during Celona’s cross-examination.

The defense has argued that it would have made no sense for CVS to hire Celona in 2000 for his political influence, because he was a “backbencher” who had no power in the Senate then. Furthermore, they have argued, Celona changed his position on pharmacy choice legislation in 2000, shortly after he went on the CVS payroll, not to favor CVS but because independent pharmacies had since been included in the network. Furthermore, when Celona killed pharmacy choice legislation as a committee chairman from 2001 to 2003, the defense argues that he did so not on orders from CVS, but on orders from William V. Irons, the Senate majority leader.

Celona testified that he supported pharmacy choice, which CVS opposed, even after independent pharmacies joined the CVS-Blue Cross network in 1999. And he testified that he bucked Irons, then the Corporations Committee chairman, when he supported pharmacy choice in 1998 and 1999.

As a backbencher, Dambruch asked Celona, did he still have the power to vote, and to “make noise” and public statements on issues?

Yes, Celona replied.

“Did you exercise your right to vote [for pharmacy choice] in 1998,” and again in 1999? asked Dambruch.

Yes, said Celona.

“And did you exercise your right to vote in 2000?”

“No, sir.”

“And when did you sign your consulting agreement with CVS?”

“In early 2000.”The Witness

John A. Celona, the government’s star witness, concluded his testimony yesterday in the corruption trial of former CVS executives John R. “Jack” Kramer and Carlos R. Ortiz. Celona, who is serving a 2 1/2-year prison sentence in Pennyslvania spent four days on the witness stand. Yesterday, Scott Corrigan, a lawyer for Kramer, ended his cross examination. He was followed by Mark Smith, a lawyer for Ortiz, who spent about an hour and 15 minutes questioning Celona.

mstanton@projo.com