Sen. Lincoln D. Chafee holds up a copy of Modern Healthcare with corruption in Rhode Island as its cover story.

The Providence Journal / Bill Murphy

PROVIDENCE — As the national GOP yesterday launched a $125,120 ad campaign aimed at least, in part, at dispelling the notion it had given up on winning the Rhode Island Senate race, incumbent Lincoln D. Chafee renewed his criticism of opponent Sheldon Whitehouse for not pursuing fraud charges against top executives at Roger Williams Medical Center when he was the state’s top prosecutor.

Then, Social Security took center stage.

The Whitehouse camp accused Republican Chafee of proposing to “cut” Social Security benefits. The National Republican Senatorial Committee accused Democrat Whitehouse of backing “higher Social Security taxes.”

“Sheldon Whitehouse says he has just the solution to save Social Security. Know what it is? You guessed it. Higher Social Security taxes,” the ad says. “Feel more secure yet?”

With Rhode Island seen as one of six or seven battleground states that could determine which party controls the U.S. Senate, Election Day now less than three weeks away and polls showing Whitehouse with a slight edge, the volume went up several notches yesterday.

In an unusual news conference on the sidewalk outside the federal courthouse where former Roger Williams president Robert Urciuoli was convicted last week for his role in a State House influence-peddling scandal, Chafee accused Whitehouse again of putting his political ambition — and Democratic Party ties — ahead of his duty.

Urciuoli’s wife is the sister of former Providence Mayor Joseph Paolino; former Lt. Gov. Richard Licht, who made runs at both Chafee and his father, the late John H. Chafee, as a U.S. Senate candidate, was a member of the hospital board.

Ratcheting up charges he leveled during two earlier radio debates, Chafee said: “Mr. Whitehouse did not do his job.... Mr. Whitehouse put his political career above the public good. Mr. Whitehouse put his ambition above duty.... I accuse Mr. Whitehouse of willful blindness.”

He also brandished the latest edition of the industry weekly Modern Healthcare – and in particular, a story titled “Guilty in Rhode Island” – as evidence the Roger Williams convictions perpetuated the perception, within business circles, that the state is beset by a “culture of corruption.”

Chafee hinged his attack on an 11-page letter – containing now public allegations of expense-account abuses by Urciuoli and his hiring of state Sen. John A. Celona to what was described as a $30,000-a-year “no-show job” – that a doctor’s group, led by physician and former Roger Williams board member Philip O’Dowd – gave Whitehouse in 1999.

On the Celona front, former federal prosecutor F. Dennis Saylor was hired by the hospital to investigate whether Celona had a no-show job, rather than a job as a political-influence peddler. Based on what he found, Saylor concluded in 1998 that Celona performed some work and there was “no basis for concluding that the contract was illegal or unethical.” The influence-peddling charges to which Celona subsequently pleaded guilty covered conduct through 2003.

With Whitehouse in Washington fundraising, his campaign issued a statement accusing Chafee of refusing to talk about “the real issues in this campaign.”

“Why won’t he call for [Defense Secretary Donald] Rumsfeld’s firing? Why did he roll over for his party on the Part D prescription drug plan? Why did he propose cutting Social Security? Why did he break his promise and support George Bush’s nominees for Supreme Court? He still won’t say.”

As evidence that Chafee proposed “cutting” Social Security – a charge that Chafee denies – the Whitehouse camp produced excerpts of news articles in which Chafee backed “progressive indexing” as a way to slow the growth in Social Security benefits by gearing future increases to rising prices, instead of wages.

Chafee campaign manager Ian Lang said Chafee would “oppose any plan that would cut Social Security benefits” and “is on the record opposing President Bush’s proposal to privatize Social Security benefits.” Asked how that squared with Chafee’s apparent early support for indexing, he said, that is one of many proposals “on the table,” but Chafee has not endorsed or voted for any one.

He accused Whitehouse of “trying to scare the seniors in Rhode Island.”

But Whitehouse spokeswoman Alex Swartsel, citing a May 2005 article in the Chicago Tribune, insisted the indexing proposal backed by Chafee would, indeed, cut benefits compared with what people making over $25,000 a year might otherwise have received.

“Over 75 years,” she said, reading aloud from the same Chicago Tribune article, “middle-income wage earners would see their promised benefits trimmed but 39.3 percent while wealthy taxpayers would be hit with a 51.5 percent cut.”

The NRSC ad, slamming Whitehouse for proposing higher Social Security taxes, is based on a Sept. 5 Whitehouse news release that said, in part: “Whitehouse’s Social Security plan includes raising the amount of income subject to Social Security payroll taxes.”

Elaborating yesterday, Swartsel said: “Sheldon believes people making over $90,000 a year should pay a little more into the system” and “it’s outrageous that George Bush and the national Republican Party who support privatizing Social Security are launching an attack [ad] on this issue.”

Unheard in Rhode Island since the final days of Chafee’s bitter primary race against Cranston Mayor Stephen P. Laffey, the NRSC leapt back in the race two days after The New York Times reported that national Republicans leaders were pulling back support from embattled Ohio Sen. Mike DeWine in Ohio and “bracing for the defeat of three [other] sitting Republican senators,” Chafee among them.

The Republican campaign-committee has now spent a total of $835,393 in reported “independent expenditures” on the Rhode Island race.

In a related development, the Chafee campaign acknowledged that it ended the third quarter with $582,844 cash on hand, not the $700,000 it had previously anticipated. Lang blamed “higher than anticipated costs for media time and production.” Whitehouse ended the quarter with $1.4 million.