PROVIDENCE –– Thomas A. Lynch, the former Warwick state senator and Blue Cross executive who was a prominent figure in the origins of Operation Dollar Bill, is no longer under investigation in the long-running State House corruption probe.

A spokesman for U.S. Attorney Robert Clark Corrente confirmed yesterday that Lynch was sent a letter last week informing him that he is no longer a target of a grand-jury investigation, similar to a letter that went out on Oct. 15 to former Senate President William V. Irons.

As the $250,000-a-year vice president and chief lobbyist for Blue Cross & Blue Shield of Rhode Island, Lynch drew on relationships developed in his earlier two decades in the Senate to advocate for the state’s largest health insurer. He golfed and schmoozed with lawmakers, paid Irons’ greens fees and rented his family’s Nantucket summer home to the family of then-Speaker John B. Harwood.

Several months before Blue Cross and Lynch parted ways in November 2004, the new Senate president, Joseph A. Montalbano, went to bat for his former colleague, calling him “a friend” who had done a “wonderful job” representing Blue Cross’s interests in the Senate.

But Lynch had also helped put another former senator, John A. Celona, on TV, in a public-access cable show financed by Blue Cross over the objections of Lynch’s subordinates at Blue Cross. At the time, Celona chaired the Senate committee that regulated health care.

After The Providence Journal revealed the arrangement, the authorities launched what quickly grew into a wide-ranging influence-peddling probe. Celona wound up in prison, after admitting to selling his office to Blue Cross, CVS and Roger Williams Medical Center. Last December, Blue Cross avoided criminal charges against the company by taking responsibility for the actions of unnamed former executives in corrupting politicians, and agreeing to contribute $20 million for affordable health care in Rhode Island.

But Lynch, who left Blue Cross in November 2004, will not be charged.

Lynch did not respond to requests for comment. The letter from the U.S. Attorney’s office, dated Oct. 20, was sent to the Boston office of Lynch’s late lawyer, Richard M. Egbert, who died earlier this year.

In an interview last week, Corrente, speaking generally, said some of the cases spawned by Operation Dollar Bill are bumping up against statute-of-limitations deadlines and that prosecutors have to make decisions in the coming months about whether they have enough evidence to move forward.

When Celona was sentenced to 2½ years in prison early last year, a federal prosecutor told the judge that the ex-lawmaker’s cooperation had resulted in active investigations of seven politicians and seven companies. But since then, authorities have seen Celona’s credibility eroded following withering cross-examinations in corruption trials involving Roger Williams and CVS.

Convictions of Celona, ex-House Majority Leader Gerard M. Martineau and former Roger Williams president Robert Urciuoli have been balanced by the acquittals of two CVS executives and, now, the dropped investigations of Irons and Lynch. Other investigations, including one probing the legislative ties of Beacon Mutual Insurance Co., remain active.

Sen. William Walaska, D-Warwick, a business partner of Lynch’s, said the shadow of the investigation has taken its toll. Although Lynch, a lawyer, maintains a law office in Providence, Walaska said Lynch has been selling credit-card services to small businesses. Lynch is also a minority owner in Walaska’s auto-parts business.

“I wonder if they sent him an apology, and a check for the money he spent [on legal fees],” said Walaska. “I’m sure it’s been a struggle. You wake up every morning thinking: Is today going to be the day? It costs you your livelihood. The question is, how can you get it back again?”

BACK IN THE DAY, Lynch was a familiar face patrolling the corridors of the State House.

He was first elected to the Senate in 1976, representing Warwick’s District 17 for nearly two decades and rising to chairman of the Senate Judiciary Committee. In 1994, Lynch chose not to seek reelection after his ally, John Bevilacqua, lost his position as Senate leader and retired.

After Lynch joined Blue Cross, he still kept some lobbying clients on the side. State records show that in 2001, while employed by the health insurer, Lynch was also paid $21,000 by the Arco petroleum company to lobby against legislation to combat lead poisoning in children.

In 2002, Lynch pushed Blue Cross marketing people to sponsor a Celona television show on health care, bringing them to a meeting at Celona’s State House office. The Blue Cross officials rejected the proposal, since Blue Cross already had a successful Sunday morning show on WJAR-Channel 10. But they were overruled.

“It seemed, to me, that it had become a political necessity to do this show,” said Michael A. Sisti, a former Blue Cross vice president for marketing and communications.

Blue Cross wound up paying $75,000 to a communications company that produced the show; the company, in turn, paid $13,565 to Celona.

According to the agreement that Blue Cross signed last year to avoid criminal charges, the company acknowledged that the health insurer’s executives were aware of the company’s business relationships with Celona, Irons and Martineau while lobbying them on health-care legislation. The agreement does not name specific executives. Just prior to its signing, Blue Cross fired four other executives: senior vice presidents Lynn Urbani and Matthew Brannigan and longtime lobbyists Scott Fraser and Brian Jordan.

Evidence presented in Urciuoli’s recent corruption trial showed that Lynch attended a luncheon at the Capital Grille in 2002 with Celona, Urciuoli and another Blue Cross executive. Urciuoli was convicted of using Celona to strong-arm Blue Cross to increase its reimbursements to the hospital.

Prior to Celona’s downfall, Lynch’s efforts to please Celona were evident at a Blue Cross Christmas party that drew legislators and others to the insurer’s Providence headquarters.

When Celona complained that there were no baked stuffed shrimp, former Blue Cross lobbyist Fraser confirmed, Lynch sent out to a local restaurant for some. The shrimp arrived, and Celona ate his fill.

mstanton@projo.com