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Jury selection starts in case of ex-CVS executives charged with bribery

09:21 AM EDT on Tuesday, May 6, 2008

By Mike Stanton

Journal Staff Writer

PROVIDENCE –– The “lies” of John A. Celona will take center stage in federal court next week when two former CVS executives go on trial on charges that they bribed the once-powerful, now-incarcerated state senator from North Providence.

Jury selection began yesterday in the trial of John R. Kramer, 75, and Carlos Ortiz, 64, who face charges of bribery and conspiracy to deprive Rhode Islanders of the honest services of a public official, Celona, by putting him on the CVS payroll as a $1,000-a-month consultant to do their bidding at the State House.

Next Monday, after prosecutors and defense lawyers winnow a field of some 112 prospective jurors down to 12, the lawyers will present opening arguments in a trial estimated to last four weeks before Chief U.S. District Judge Mary M. Lisi.

In pretrial motions, the two sides have sparred over the credibility of the government’s star witness, Celona, who is serving 2½ years in federal prison after pleading guilty to selling his office to CVS, Blue Cross & Blue Shield of Rhode Island and Roger Williams Medical Center. He agreed to cooperate in a wide-ranging State House influence-peddling probe known as Operation Dollar Bill.

One focal point of that case is CVS, the Woonsocket-based drugstore chain that is the nation’s biggest and which had financial ties not only to Celona but to two other powerful lawmakers, former House Majority Leader Gerard Martineau and former Senate President William Irons.

Martineau recently pleaded guilty to selling his office to CVS and Blue Cross in exchange for paper and plastic bag contracts. Irons, an insurance man and friend of CVS chief executive Tom Ryan, earned hundreds of thousands of dollars in commissions on Blue Cross health insurance policies for CVS employees, which the FBI also has investigated, though no charges have resulted, to date.

Celona was pounded during cross-examination during the trial of former Roger Williams executives 19 months ago. He was combative and reluctant to answer questions without the assistance of documents, accusing defense lawyers of trying to trip him up and contradicting himself on some key points.

But the jury, after considering all of the evidence, including letters and e-mails between Celona and hospital executives, ultimately convicted former Roger Williams president Robert Urciuoli and vice president Frances Driscoll. (Those convictions were subsequently overturned, not as a result of Celona’s testimony but based on the judge’s instructions to the jury; a new trial has yet to be scheduled.)

The prosecution says that Celona was not initially forthcoming with investigators, but ultimately told the truth.

Kramer, of East Greenwich, is a former CVS senior vice president whose responsibilities included government affairs and who was also known for running the annual CVS Charity Golf Classic. Ortiz, of Amherst, Mass., was a vice president for government affairs.

The indictment charges that while the two men were fighting pharmacy choice legislation that would have jeopardized millions of dollars in sales for CVS, they began meeting with Celona, who chaired a Senate committee that oversaw the legislation. Celona was hired in early 2000 as a consultant to CVS, and collected $45,000 through the fall of 2003 while also receiving golf outings, trips to Florida and California and tickets to professional sporting events, the indictment says.

Meanwhile, prosecutors charge, Celona changed his position to oppose pharmacy choice and also followed CVS’ direction on other pharmacy related legislation. The indictment says that Kramer and Ortiz “personally and informally communicated” CVS’ position on legislation, and refers to e-mails and written communications regarding legislative matters.

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

Killing the pharmacy choice bill, Ortiz wrote in one internal company review, “helped to protect millions of dollars of sales,” according to the indictment.

In court papers, though, the defense “contends that CVS hired Celona to provide public relations consulting services, not to improperly influence Celona’s official actions as alleged.”

Defense lawyers also have cited inconsistencies in Celona’s statements to investigators, including details of his hiring and his reasons for changing his positions on legislation of interest to CVS. They also challenge Celona’s assertion that when CVS ended his consulting relationship, Kramer offered him a golf trip to California as a sort of “consolation bribe.” In another statement, the defense notes, Celona said that the golf invitation came before he learned that CVS was terminating him.

Some familiar names may surface as the trial delves into the inner workings of the State House. For instance, prominent lobbyist Joseph Walsh was the CVS lobbyist involved in some of the initial conversations between Celona and Kramer and Ortiz, although there is no evidence suggesting –– and his lawyer has denied –– that Walsh knew of Celona’s job with CVS.

Another lobbyist for CVS, who worked with Walsh, was Patrick Lynch, now the Rhode Island attorney general, who has cooperated in the case and has also said he was unaware of Celona’s consulting job with CVS.

According to court papers, Celona said that Senate leaders Joseph Montalbano and Stephen Alves may have been present during one conversation that he had regarding pharmacy choice with Ortiz and Walsh in the Senate lounge.

Another question hovering over this trial is what knowledge of Celona was possessed by Ryan, the CVS chief executive and a prominent 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 memo that Ortiz sent Ryan and other CVS executives, briefing them on efforts to “kill” pharmacy choice in Celona’s Senate committee, and mentions Celona’s presence at a social function at the home of “CVS Executive #1.” But the indictment also charges Kramer and Ortiz with concealing aspects of Celona’s employment from other executives at CVS.

Prospective jurors, who filled out detailed questionnaires, were quizzed about their feelings about the high cost of prescription drugs and their perceptions of corruption in Rhode Island.

“The health-care industry is such a profit center, there should be reform,” said one prospective juror.

At least three jurors, asked about corruption in general in Rhode Island, alluded to the corrupt reign of Vincent A. Cianci Jr., the former felonious mayor of Providence, who was convicted in this same courthouse. One elderly woman, asked if she could provide specific examples of her general knowledge of corruption in the state, replied, “No, because there’s just too much.”

mstanton@projo.com