Celona

John Celona is back in town, a sign that the long-running federal corruption probe of the Rhode Island State House is heating up.

The convicted former senator from North Providence, whose State House double-dealing sparked the sprawling investigation known as Operation Dollar Bill, has been quietly moved from a federal prison in western Pennsylvania to the Donald W. Wyatt Detention Center in Central Falls.

In March, Celona began serving a 2½-year prison term after he pleaded guilty to using his public office for private gain and agreed to cooperate with the authorities against some of his former legislative colleagues. Celona’s assistance, a prosecutor told a judge in January, had spawned 14 “active investigations” of 7 politicians and 7 corporations.

From Blue Cross to Beacon Mutual, from CVS to Citizens Bank, the investigation is being handled by a task force encompassing the FBI, the Rhode Island State Police, criminal investigators from the IRS and U.S. Department of Labor, as well as one-fifth of the resources of the U.S. Attorney’s office in Providence.

Five months after Celona reported to a low-security prison in Loretto, Pa., he was brought back to Rhode Island around Aug. 7 by federal authorities, U.S. Marshal Burton Stallwood confirmed yesterday.

U.S. Attorney Robert Clark Corrente declined to comment on Celona. But his homecoming probably means that investigators need to talk to him, or have him testify before the grand jury, as their efforts on a number of fronts progress.

Celona’s lawyer, William C. Dimitri, said that Celona is happy to be closer to home and family, even if it is a high-security facility for accused drug dealers and others awaiting trial, as well as convicts waiting to be sentenced.

“He’s doing fine, hanging in there,” said Dimitri. “Obviously it’s easier for him to see his children and his wife, and that’s some comfort. He’s anxious to finish his sentence and get home to his family.”

Dimitri declined comment on the reasons for Celona’s transfer, and said that he has no idea when he might be sent back to federal prison, or even whether he would be returned to the same prison.

Celona, 54, whose whereabouts have previously been identified on the Bureau of Prison’s Web site as Loretto, is now listed on the “inmate locator” as being “in transit.” His scheduled release date is March 28, 2009.

Meanwhile, the mayor of Johnston yesterday called on the General Assembly to pass a tax incentive for a Pennsylvania trucking company. Mayor Joseph M. Polisena said that he will ask the Town Council to adopt a resolution seeking the tax break for A. Duie Pyle, following a report in The Sunday Journal that the FBI is investigating allegations that Sen. Stephen D. Alves, D-West Warwick, killed the measure in June to punish Polisena for not investing Johnston pension funds with Alves, a stockbroker.

The Journal story also prompted the Rhode Island Republican Party chairman, Giovanni Cicione, to urge Senate President Joseph Montalbano yesterday to ask Alves to relinquish his duties as chairman of the Senate Finance Committee.

“Until this FBI cloud hanging over Senator Alves is resolved one way or another, for him to be allowed to hold one more hearing, judge one more moment of committee testimony, or act on one more piece of legislation in his official capacity as chairman, is an insult to the people of this state and a violation of our constitutional principles,” Cicione said in a statement.

Alves, who denies any wrongdoing, said in a brief interview last night that he has no plans to step down as Finance chair.

“That’s certainly his prerogative to ask for that,” Alves said of Cicione.

NEARLY FOUR YEARS have passed since The Journal first reported on Celona’s financial relationship with Blue Cross, which helped finance the then-senator’s cable television show, and his relationship with CVS, which had hired him as a $1,000-a-month consultant. At the time, Celona chaired a powerful Senate committee that oversaw health-care legislation.

Celona’s star quickly dimmed on Smith Hill, and he resigned the following spring, the day after the state police searched his house and seized his files and computer. The scandal also prompted the resignation of then-Senate President William V. Irons, an insurance salesman, who sold Blue Cross insurance to CVS and enjoyed private trips on the CVS corporate jet with his friend CVS chief executive Thomas M. Ryan.

In the spring of 2004, the FBI joined what was initially a three-pronged state investigation of Blue Cross, CVS and Roger Williams Medical Center, which also employed Celona as a consultant. Celona was indicted on influence-peddling charges, pleaded guilty in 2005 and testified last year against two former Roger Williams executives, Robert A. Urciuoli and Frances P. Driscoll, who were convicted of buying his services as a public official. They have appealed their convictions.

Early this year, two CVS executives, John R. Kramer and Carlos Ortiz, were indicted for hiring Celona, allegedly to do the drugstore chain’s bidding at the State House, most notably in killing pharmacy-choice legislation that would have threatened CVS’ business in Rhode Island, corporate home to the nation’s biggest drugstore chain. Kramer and Ortiz, both of whom are no longer with CVS, are expected to go to trial next year.

Once Celona began cooperating and telling tales from inside the Senate leadership, however, the investigation spun off in other directions as well, focusing on, among others, Alves and Senate President Joseph Montalbano.

Investigators are also asking questions about Beacon Mutual, the state’s dominant workers’ compensation insurer. This summer, state regulators released investigation results of Beacon that raised questions of political influence in the insurer’s attempts to get legislation passed at the State House.

Today, 3½ years after the FBI got involved, federal prosecutors have yet to obtain indictments of any public official beyond Celona. That has caused grumbling among defense lawyers, many of whom have been engaged to represent the myriad of witnesses as well as potential targets, and at the State House, where prominent politicians have had to operate under a cloud of suspicion.

“He [Corrente] says he’s got so many people [working the case],” says Mark L. Smith, lawyer for Ortiz. “Has he not had enough time to make a determination whether someone has committed a crime or not?”

Corrente, in a recent interview, said that the investigation is moving forward, but pointed to the complexities and scope to explain why it has taken so long. Asked if indictments are coming soon, Corrente declined to set any deadlines, saying only that prosecutors are mindful of the statute of limitations that might be running on potential crimes.

“I’m not going to debate defense counsel about what timetable we should or shouldn’t be following,” said Corrente. “The investigation is active and ongoing on a lot of fronts. The investigations will conclude when they conclude. There won’t be any artificial deadlines.

“If anyone wants to accuse us of being thorough, I plead guilty.”

Smith, Ortiz’s lawyer, agreed that the federal effort has been monumental.

“I can appreciate their effort — whether I agree with it or not is another case,” he said. “But the effort is mind-boggling.”

mstanton@projo.com