Rhode Island news
CVS lawyers say Celona hired for public relations reasons
07:22 AM EDT on Friday, May 16, 2008
Mary Jane McCusker, adminstrative assistant to John Kramer, arrives at court yesterday with lawyer Jeffrey Pine to testify in the trial of Kramer and Carlos Ortiz on corruption charges. The Providence Journal / Mary Murphy
PROVIDENCE –– For more than an hour yesterday, the defense in the CVS corruption trial tried to show that former Rhode Island Sen. John Celona was hired for his public-relations value to CVS –– promoting the drugstore chain’s charitable endeavors through his cable-access television show.
Then, federal prosecutors produced CVS records documenting Celona’s $1,000-a-month consulting payments from the nation’s biggest drugstore chain –– payments that were made from CVS’ “Political Contributions” account and approved by CVS’ head of government affairs.
Records from 2001 showed that Celona’s monthly “consultation fee” was paid from the same account as contributions to national political groups such as the Democratic Leadership Council, the House Senate Republican dinner, the House Majority Leader’s Fund (in connection with a dinner with then majority leader, U.S. Rep. Dick Armey of Texas), and the Democratic Senatorial Campaign Committee, a contribution that was made through Rhode Island U.S. Sen. Jack Reed.
Celona’s invoices were approved for payment by CVS’ then-vice president for government affairs, Carlos Ortiz, who is on trial with his former boss, ex-CVS vice president John R. “Jack” Kramer, on 23 counts of bribery, conspiracy and mail fraud. They are accused of hiring Celona to help promote CVS’ legislative agenda at the Rhode Island State House.
Extra
Among the exhibits in court Thursday were:
Extra: Seating at 2002 CVS gala
Celona’s invoice to Ortiz and a CVS check endorsed by Celona
An e-mail from Celona to Ortiz requesting payment
An internal CVS report in which defeating pharmacy choice is included among “Achievements in 1999”
A personal note from Kramer to Celona about tickets to the CVS Charity Classic
CVS listed Celona’s pay as political contribution
A list of politicians who requested tickets to the CVS Charity Classic, as approved by Kramer
In one prosecution exhibit introduced during the fourth day of testimony yesterday, Ortiz listed one of his accomplishments in 1999 as the defeat of pharmacy choice legislation in Rhode Island, and one of his goals for 2000 to defeat it again. The legislation, wrote Ortiz, threatened CVS with “potential lost sales in millions.”
Celona, who pleaded guilty to selling his office to the Woonsocket-based CVS and is serving a 2½ -year prison term, is cooperating with authorities and is awaiting his turn as the government’s star witness in the courtroom of Chief U.S. District Judge Mary M. Lisi.
Kramer, 75, was senior vice president for community relations and government affairs, and supervised Ortiz, 64, the vice president for government affairs.
During testimony from Kramer’s longtime administrative assistant, Mary Jane McCusker, the defense introduced Kramer’s appointment calendar and other documents to show that he dealt with Celona to promote CVS’ charitable doings, not legislation.
Kramer’s calendar brimmed with scheduled television tapings, on Celona’s show and elsewhere, to promote the CVS Charity Golf Classic, the CVS Downtown 5K in Providence and the CVS Highlander Charter School in Woonsocket.
Under questioning from Kramer’s lawyer, David B. Fein, McCusker described how her boss would bring doughnuts and CVS caps and T-shirts to disc jockeys during radio interviews promoting the CVS Classic. Kramer enjoyed going on television, she testified, including an appearance on NBC’s TODAY show, with Katie Couric, in connection with one charitable donation.
Kramer kept a drawer-full of videotapes of shows, including Celona’s, and would pop them into the VCR in his office to show co-workers, McCusker testified.
To the extent that his crowded schedule allowed for politics, Celona was by no means alone on Kramer’s calendar. Kramer schmoozed with many politicians, on the golf course and at the private Aurora Club in Providence, at Chamber of Commerce dinners and charitable functions.
The list included two Rhode Island governors, Lincoln Almond and Donald Carcieri, House Speaker William Murphy and several other senators and representatives. He also met with Howard Sutton, publisher of The Providence Journal.
Kramer’s calendar also noted a 2003 appearance by ex-New York mayor Rudy Giuliani at the Providence Business Expo. In 2001, the day after Kramer taped an episode of the John Celona State House Report, his calendar shows a reception in Boston for First Lady Laura Bush. And while he had lunch with Celona at the Aurora Club in Providence, Kramer also dined there, on another occasion, with U.S. Sen. Jack Reed, to “discuss legislative issues pertinent to CVS business,” according to his expense account.
Kramer and Tom Ryan, the chief executive officer of CVS, also created a video encouraging CVS employees to donate to the company’s political-action committee, a video that featured appearances by Reed and then-Gov. Tom Ridge of Pennsylvania, later the director of the U.S. Department of Homeland Security.
McCusker testified that she received dozens of calls every year from people seeking tickets to CVS’ golf tournament. Kramer approved many, she said; the tickets given to Celona were handled no differently from requests from other politicians and community leaders.
Among other politicians who requested and received tickets in 2003: current Senate President Joseph Montalbano and his predecessor, William Irons, an insurance broker who resigned amid controversy over his business ties to CVS –– a matter that remains under investigation as part of the federal corruption probe, Operation Dollar Bill, that snared Celona and led to the indictment of Kramer and Ortiz.
The list shows that Kramer approved four tickets, worth $120 each, for Celona, as well as four $120 tickets for Montalbano and two $60 tickets for Irons. While the tickets were sent for free, McCusker testified, CVS eventually began including a letter requesting –– but not requiring –– a donation, since the tournament was intended to raise money for charity.
Kramer’s crammed calendar, or “A Typical Week In The Life of Jack Kramer,” as Fein referred to it, offers a glimpse into the small Rhode Island circle of power brokers –– leaders in business and government mingling at charity galas, political fundraisers, business luncheons and on the golf course.
On Aug. 4, 2003, Kramer golfed in a foursome at the Potowomut Golf Club in Warwick for the Special Olympics with Celona and former House Majority Leader Gerard Martineau, who recently went to prison after pleading guilty to doing CVS’ and Blue Cross’ State House bidding in exchange for $900,000 in paper and plastic bag contracts.
At the CVS Charity Classic’s gala dinner in 2002, Irons, Martineau and former House Speaker John Harwood and their spouses sat at one of Tom Ryan’s two tables, according to a seating list introduced by Assistant U.S. Attorney Stephen G. Dambruch. The prosecutor also introduced a letter that Kramer sent Celona enclosing his tickets to the dinner, seated at one of Kramer’s table, with a handwritten notation, “John –– Going to be a great night!”
When Ortiz’s longtime assistant, Betty Bibeault, took the stand, the focus shifted back to Celona’s consulting deal with CVS.
In 2000, when Celona first went on the payroll, Bibeault testified that he was paid out of an account labeled “Miscellaneous Corporation Political Contributions,” a catch-all for unbudgeted expenses.
Starting in the following year, however, she said that Ortiz asked her to shift Celona’s $1,000-a-month payments to the account for Political Contributions. And it was Ortiz, the government affairs chief who McCusker had testified had no involvement in community relations activities, who approved Celona’s monthly invoices, Bibeault testified.
At times, the CVS payment process moved too slowly for Celona.
“Dear Carlos: I hate to bother you but I haven’t received a check for two months,” Celona wrote Ortiz in 2001, five days before Christmas.
Ortiz forwarded Celona’s e-mail to Bibeault, asking her to “check into this for me.”
Mary Jane McCusker, administrative aide to former CVS executive John R. “Jack” Kramer, spent about three hours testifying about her boss’ meetings with Celona and other politicians in 2001, 2002 and 2003. More than a dozen exhibits detailing Kramer’s meeting with various dignitaries were presented as evidence. McCusker concluded her testimony yesterday.
Betty Bibeault, a longtime CVS employee and former administrative assistant to former CVS executive Carlos Ortiz, spent the final 45 minutes of the day on the witness stand. She is scheduled to return at 9 a.m. tomorrow and resume testifying.
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