After John Celona voted for legislation opposed by CVS in 1998, an executive from the drugstore chain sent the senator a campaign contribution, and a note.

“I look forward to working with you in the future on other issues of mutual importance,” wrote the executive, Carlos Ortiz.

U.S. Attorney Robert Clark Corrente, left, announces yesterday the indictments against CVS executives John R. Kramer and Carlos Ortiz. At right are Rhode Island State Police Capt. Steven Lynch and Assistant U.S. Attorney Luis Matos.

The Providence Journal / Kathy Borchers

That was the beginning of a profitable friendship, federal prosecutors charged yesterday — and a corrupt one.

Ortiz and another prominent CVS executive, John R. “Jack” Kramer, were accused in a 23-count indictment of conspiracy, fraud and bribery for allegedly hiring Celona as a $1,000-a-month consultant from early 2000 to the fall of 2003, paying him a total of about $45,000 and also lavishing him with golf outings, trips to Florida and California and tickets to professional sporting events.

Although Celona was ostensibly paid to improve CVS’ image among consumers, U.S. Attorney Robert Clark Corrente charged that Kramer and Ortiz put Celona on the payroll “to advance the company’s legislative agenda…through illicit payments to Senator Celona.”

In return, the indictment said, Celona used his political clout to kill controversial “pharmacy choice” legislation that would have expanded the Rhode Island network of pharmacies that accepted Blue Cross reimbursements. CVS, which dominated the restricted network, opposed the bill so strongly that the company tied Kramer’s and Ortiz’s performance reviews to defeating the legislation.

Killing the legislation, Ortiz wrote in one review, had “helped to protect millions of dollars of sales.”

The indictment says that Celona also opposed the licensing of Canadian pharmacies in Rhode Island, pushed legislation to allow the electronic filing of prescriptions and promoted the creation of a state-backed loan program for pharmacy students.

Celona pleaded guilty in 2005 to selling his office to CVS, Blue Cross & Blue Shield of Rhode Island and Roger Williams Medical Center, and is due to be sentenced Jan. 31. He testified last fall in the corruption trial leading to the conviction of former Roger Williams executives Robert Urciuoli and Frances Driscoll.

Yesterday’s indictment left one major question unanswered: Will the investigation reach Tom Ryan, the chief executive of the nation’s largest drugstore chain and a Rhode Island business leader whose name graces the basketball arena at the University of Rhode Island, his alma mater?

The indictment refers cryptically to a 1999 memo that Ortiz sent to a number of CVS officials, including “Executive #1,” in which he discussed pharmacy choice and wrote, that he was “hopeful that we will be able to kill it in the Senate Corporations Committee.” However, the indictment also charges that Kramer and Ortiz failed to have Celona’s consulting agreement reviewed and approved by CVS’ chief financial officer; and others, as required under company policy governing consultants.

Ryan has declined to comment on whether he knew of the arrangement. The indictment mentions Celona’s attendance at a social function at the home of “CVS Executive #1,” but doesn’t elaborate on that person’s possible knowledge of the relationship.

Corrente would not rule out further charges against CVS officials in a widening State House influence-peddling probe that he said “is continuing, actively and on many fronts.”

Ryan is close friends with former Senate President William V. Irons, an insurance agent who resigned amid controversy over his business relationship with CVS. The Journal has reported that Irons approached Ryan about receiving insurance commissions for a Blue Cross policy covering CVS employees in Rhode Island.

“No charges were filed against the company, which has fully cooperated with the government in connection with its investigation of this matter since its inception,” CVS said in a statement yesterday.

In an e-mail to CVS employees, Ryan wrote: “we have faith in our justice system and that a trial will yield a fair and just result. On a personal level, we are of course saddened by today’s events and our thoughts are with these men and their families at this difficult time.”

Kramer, 74, of East Greenwich, and Ortiz, of Amherst, Mass., will appear in court at a date to be determined. They have been on leave from their CVS jobs since 2004.

Peter DiBiase, Kramer’s lawyer, said in a statement that “these charges should not have been filed and we look forward to a trial where Jack Kramer’s innocence will be confirmed.” Kramer, he said, has enjoyed a “successful and unblemished” business career of 50 years, starting as a stock boy for Sears and, since 1991, as a CVS executive who raised tens of millions of dollars directing the company’s charitable affairs, including the CVS Downtown 5K in Providence and the CVS Charity Classic golf tournament.

Kramer, who recently celebrated his 45th wedding anniversary, has four children and six grandchildren, said DiBiase.

Celona was an early proponent of pharmacy choice, voting for it in the mid to late 1990s, even as it repeatedly failed.

After voting for the bill in 1998, the indictment says, Ortiz, at Celona’s suggestion, sent the senator a $50 political contribution from CVS’ political action committee, and the note expressing the hope that they could work together in the future.

In 1999, one month after Celona last voted in favor of pharmacy choice, the indictment says that Kramer and Celona discussed the possibility of Celona’s working for CVS. The conversation continued that summer at CVS headquarters in Woonsocket among Kramer, Ortiz and Celona, at which point they discussed “the ethical implications” given Celona’s status as an elected official.

Celona followed up that fall, proposing that he be hired to help boost CVS’ image, which had been damaged among senior citizens angry over the company’s opposition to pharmacy choice: “Jack, I feel that this program can be a relatively inexpensive way to continue to market CVS . . . and provide significant positive results,” wrote Celona.

At another meeting at CVS headquarters, on Jan. 7, 2000, Kramer and Ortiz offered Celona a job, the indictment says. Ten days later, Kramer wrote for his 1999 performance evaluation about his efforts to strengthen CVS’ Government Affairs department, noting that “many new contacts and relationships were built.”

From February 2000, when Celona started receiving $1,000 a month, through 2003, Kramer and Ortiz “personally and informally communicated” CVS’ position on various legislation at some of the luncheons, fundraisers, conferences and golf outings “they attended with [Celona] and often paid him for.” They also communicated via e-mail and directed other CVS lobbyists to communicate with Celona, who became chairman of the powerful Senate Corporations Committee that oversaw legislation of interest to the drugstore chain.

Later, the indictment says, Kramer and Ortiz caused Celona’s monthly consulting fees to be charged to the CVS government affairs budget under “political contributions,” failing to notify the appropriate CVS personnel and also misleading other CVS lobbyists. About a year after CVS started paying Celona, Ortiz e-mailed the senator: “[i]f anyone asks you what you do for CVS you should identify your title as Community Service Consultant. How does that sound to you?”

A month later, Ortiz and an unnamed CVS public-relations official discussed drafting a description of Celona’s duties “in the event that CVS ever received media inquiries regarding Celona’s relationship with CVS.”

That same year, reflecting on his 2000 job performance, Ortiz wrote, “I believe this has been a very good year with regards to expanding our relationships and influence with governors, legislators and regulators,” as exemplified by the defeat of pharmacy choice bills in Rhode Island, Ohio and Indiana.

The indictment says that Celona also received free meals, trips and entertainment, including attendance at CVS corporate events, sports tickets, tickets to the taping of a nationally syndicated TV program and expenses related to travel to Key Biscayne, Fla., and San Diego, Calif.

In 2002, as a member of the Rhode Island Student Loan Authority, Celona promoted a loan program to encourage more pharmacy students. That January, Celona, Kramer and Ortiz attended a social function at the home of “CVS Executive #1,” in which the unnamed executive “recognized and thanked Celona for his official acts” regarding the loan program.

In the summer of 2003, Kramer told Celona during a game of golf that CVS could no longer pay him due to increased public scrutiny, then invited Celona to join him at a charity golf tournament in San Diego at CVS’ expense that October.

Two months later, a Providence Journal reporter called CVS spokesman Todd Andrews inquiring about Celona’s relationship to CVS. According to the indictment, Andrews, who is not named, read the reporter the job description that he had created with Ortiz two years earlier — unaware that the information was “misleading” because Ortiz had disguised the true nature of the relationship.

With staff reports from Paul Grimaldi

mstanton@projo.com