Rhode Island news
Lobbyist says Celona sought CVS meeting
08:38 AM EDT on Wednesday, May 14, 2008
PROVIDENCE — Sometime in early 2000, Joseph W. Walsh, a powerful lobbyist and former Warwick mayor, was walking through the State House when he bumped into John R. “Jack” Kramer, a top executive for CVS.
The two men had a friendly working relationship: Walsh and his law firm, Tillinghast Licht & Semonoff, were paid $5,000 a month to handle government relations issues for the Woonsocket-based drugstore chain.
“I just wanted you to know that we are doing something with Celona and it was approved by the [Rhode Island] Ethics Commission,” said Kramer, according to Walsh.
A few weeks later, Carlos Ortiz, another ranking officer at CVS, was having a telephone conversation with Walsh.
“Did Jack mention Celona to you?” Ortiz said.
“Yes,” he remembered answering.
Walsh, known as a political operative who shuns the limelight, took center stage for nearly three hours yesterday in the federal bribery, fraud and conspiracy trial of Kramer, 75, and Ortiz, 63, in U.S. District Court. They are accused of bribing former state Sen. John A. Celona.
Celona has pleaded guilty to selling his office to CVS, Roger Williams Medical Center and Blue Cross & Blue Shield of Rhode Island. He is serving a 2½-year sentence in a federal prison in Pennsylvania. He was brought back to Rhode Island last week and is being housed at the Donald W. Wyatt Detention Center, in Central Falls. He is expected to testify, possibly this week, against Kramer and Ortiz.
The charges against the former executives are rooted in CVS hiring Celona as a consultant for $1,000 a month to do the drugstore chain’s bidding and influence legislation at the State House.
The second day of the trial of Kramer and Ortiz centered on Walsh’s governmental affairs legal work for CVS and how much he knew about Celona’s relationship with the nation’s largest drugstore chain. His testimony provided insight into the work lobbyists perform to champion legislation for clients who are willing to pay them for their inside knowledge of state government.
Walsh also testified that Patrick C. Lynch, now the state attorney general, was one of four lawyers from his firm who worked on legislative matters involving CVS. At one point, Walsh and Lynch met with Celona at the State House.
In 1999, the hot topic involving the drugstore chain was “freedom of choice” legislation. Stores such as Stop & Shop and Walgreen’s were not part of a network that allowed Rhode Island subscribers of Blue Cross & Blue Shield to get coverage of their prescriptions.
CVS opposed the legislation. Celona, who was popular among senior citizens with medical ailments, supported it. In the end, the legislation died.
Walsh testified that Celona had repeatedly sought a meeting with Tom Ryan, chief executive officer of CVS. That summer, after the General Assembly adjourned, Walsh testified that he arranged a meeting between Celona, Kramer and Ortiz.
Walsh testified that he didn’t remember much about the meeting, which might have taken place in a second-floor committee hearing room. “I don’t have a clear recollection,” he said. “That was a long time ago. It wasn’t important to me.”
Assistant U.S. Attorney Stephen G. Dambruch asked Walsh whether there was any discussion of employment opportunities for Celona.
“Not to my knowledge,” Walsh said.
A few months later, in early 2000, CVS hired Celona as a paid consultant and he reversed his position on freedom of choice legislation. Within a year of the CVS hiring, Celona rose to the powerful position of Senate Corporations chairman, where he could influence legislation of interest to the drugstore chain.
Celona, who once ran a lawnmower repair shop in North Providence, worked for CVS for 40 months.
Dambruch pressed Walsh on his chance meeting with Kramer at the State House and his phone conversation with Ortiz. Walsh said that neither CVS executive ever mentioned how Celona was being compensated for his work, nor did he ever talk to Celona about it.
One of Kramer’s lawyers, Scott D. Corrigan, of New York City, and Thomas R. Kiley, of Boston, part of Ortiz’s legal team, gently cross-examined Walsh. Both of them asked whether Kramer and Ortiz asked Walsh to keep their conversations about Celona’s hiring a “secret.”
He answered that they did not.
“Was it ever suggested to you that John Celona would be CVS’ go-to guy in all legislation?” Kiley said. Walsh said that it had not.
Walsh concluded his testimony early yesterday afternoon and the jury was adjourned for the day. The trial was to resume today at 9 a.m., with lobbyist Clark Curtis expected to take the stand.
Earlier yesterday, Paul DeRoche, vice president of government affairs for the Greater Providence Chamber of Commerce, testified about his dealings as a lobbyist with Celona, Kramer and Ortiz on issues of mutual interest to the chamber and CVS, a chamber member.
Among those issues: opposing pharmacy choice and Canadian drug imports, and supporting electronic filing of prescriptions.
DeRoche described a national drugstore chain conference that he, Kramer, Ortiz and Celona attended in Key Biscayne, Fla., that included seminars in the morning and golf outings in the afternoon. Among the other participants: then-Rhode Island House Speaker John Harwood.
Under cross-examination by Kramer’s lawyer, David B. Fein, DeRoche said that state legislators from about 12 states gathered in Key Biscayne at the expense of the drugstore group.
“The purpose was to educate them about changes in the pharmacy industry,” said DeRoche. “It was a wonderful opportunity to bring these people in and educate them as to what’s going on.”
Asked Fein, “There was nothing wrong with that, was there?”
“I don’t see anything wrong with it,” replied DeRoche.
DeRoche also testified that Kramer invited him, Celona and former chamber president James Hagan to golf about three times at the TPC golf course in Norton, Mass., where CVS maintained a corporate membership.
However, in his various encounters with Celona, Kramer and Ortiz, DeRoche testified, nobody ever told him that Celona was a paid consultant for CVS.
“Absolutely not,” said DeRoche.
—With staff reports from Mike Stanton
Paul DeRoche, vice president of the Greater Providence Chamber of Commerce, testified about his dealings with John Celona, John Kramer and Carlos Ortiz on pharmacy issues of mutual interest to the Chamber and CVS.
Joseph W. Walsh, a prominent State House lobbyist who represented CVS from 1998 to 2004, testified about lobbying, legislation and Celona. He described a key State House meeting that he arranged with Kramer, Ortiz and Celona in 1999, but said he did not recall any mention of a CVS consulting job for Celona.
Clark Curtis, a lobbyist who worked for Walsh, is expected to be the next witness.
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