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PROVIDENCE –– Operation Dollar Bill began with great fanfare –– a prominent state senator on the take, other legislators targeted and some of Rhode Island’s most powerful private institutions under the gun.

At one point, a federal prosecutor told a judge that a special task force was actively investigating seven unnamed politicians and seven unidentified companies. Lawmakers were nervous. Defense lawyers were busy. The marble corridors of the State House whispered with echoes of who might be next.

Nearly five years later, despite the convictions of two high-profile former lawmakers and an ex-hospital president, and prosecution deals with Blue Cross & Blue Shield of Rhode Island and Roger Williams Medical Center, there is a sense that the wide-ranging influence-peddling probe has not lived up to expectations.

“Operation Nickel and Dime,” former Attorney General Arlene Violet called it on a recent Channel 12 Newsmakers show.

The past few weeks have brought good news for two prominent figures, former Senate President William V. Irons and onetime senator and Blue Cross lobbyist Thomas Lynch. Each received a letter from the U.S. Attorney’s office notifying them that they are no longer the targets of grand-jury investigations.

The clock is ticking. The statute of limitations on some potential crimes is running out — it’s been five years since some of the conduct came under scrutiny.

Time is also running out for U.S. Attorney Robert Clark Corrente, a Republican appointee four years ago who expects to be replaced sometime next year when the White House changes hands, regardless of who wins.

As Rhode Islanders go to the polls on Tuesday, in a state where a struggling economy is often tied to negative perceptions of its ethical climate, they have much to ponder regarding the lessons of Operation Dollar Bill, a century after muckraker Lincoln Steffens described Rhode Island as a state for sale.

To some, the inability to secure more indictments and convictions is disappointing, speaking to the failings of prosecutors, the difficulties in ferreting out corruption and the additional obstacles posed by recent court decisions regarding Rhode Island’s “citizen legislature.”

To others, justice has been served, if belatedly, partially lifting a cloud that has hovered over the State House, a cloud that increases public mistrust of their government and exacerbates Rhode Island’s efforts to boost its sagging economy.

“It does have a feeling of petering out,” said Ross Cheit, a member of the Rhode Island Ethics Commission. “There’s a sense of disappointment that it was built up to be more than it turned out to be.”

House Speaker William Murphy said that he didn’t want to judge Operation Dollar Bill, and that prosecutors have a job to do, but he acknowledged that the corruption probe has “put a cloud over Rhode Island government.”

“There will always be wrongdoers,” said Murphy. “But in my 16 years up there, I’ve found that most of the people elected to serve are honest and hard-working and want to do the best for the state.”

U.S. Sen. Jack Reed, who could choose Rhode Island’s next U.S. Attorney if Barack Obama is elected president, calls corruption investigations “a double-edged sword –– if prosecuted vigorously, it puts the focus on corrupt conduct, which is both comforting and disturbing.”

Operation Clean Government president Charles “Chuck” Barton also worries about reversals on the civil side. Last Wednesday, a Rhode Island judge rejected an Ethics Commission complaint against Irons, which alleged that the senator had a conflict in opposing pharmacy-choice legislation while collecting hundreds of thousands of dollars in commissions on a Blue Cross contract covering CVS employees.

Reacting to the news that Irons would not be indicted, Barton said: “There was certainly enough there to cast a cloud over Irons that wasn’t inappropriate to cast … It certainly didn’t pass the smell test.”

Asked if Dollar Bill has been over-hyped, Corrente responded that Operation Dollar Bill should not be judged as a whole because it was never one, big, monolithic case.

“It’s really a series of distinct cases, with individual prosecutorial decisions in each one based on the evidence,” he said.

As for the perception that his office’s fight against corruption has failed, Corrente ticks off the convictions that his office has secured, noting that former Sen. John A. Celona and ex-House Majority Leader Gerard M. Martineau are the first Rhode Island legislators in memory, if not state history, to go to prison. Plus, other investigations continue.

“It’s not like it’s a black hole,” said Corrente. “And it remains to be seen where we end up.”

Corrente said that with the statute of limitations a factor, prosecutors will be making decisions in the next few months on other cases.

The Journal has reported that investigators have looked into the business dealings of Senate President Joseph Montalbano, a title lawyer, and Senate Finance Chairman Stephen D. Alves and Sen. Daniel DaPonte, investment advisers. Decisions could be coming soon in those cases. Corrente declined to comment on specific investigations. Alves was upset in the West Warwick primary last month by an opponent who attacked his State House ethics.

This year, the grand jury has shifted its focus to the Beacon Mutual Insurance Co. and its financial dealings with two state representatives, John DeSimone and Robert Flaherty. That case is of more recent vintage, and could have a longer timeline.

Some observers say they are frustrated trying to understand why certain cases haven’t gone anywhere. And Corrente, citing grand-jury secrecy rules, says he can’t explain.

In the Irons case, says Cheit, “either the prosecutor was ineffective or there was an unfair cloud placed over his head for the last three, four, five years.” Then Cheit pondered another possibility: “If Celona had been a better witness, there might be more of a case here.”

Once Celona began cooperating, he was able to provide investigators with a State House insider’s roadmap to possible wrongdoing. But he was a combative and evasive witness, so much so that prosecutors chose not to use him in the second Roger Williams corruption trial this fall. At last spring’s CVS corruption trial, in which two executives were acquitted of corruption charges, Corrente took the extraordinary step of telling the judge that prosecutors couldn’t predict what would come out of Celona’s mouth.

Prior to the CVS trial, there were strong signals that Irons would be indicted, according to people familiar with the case.

Corrente and Irons’ lawyer, John Tarantino, declined to comment on their talks. Corrente says only that, “There was a period of time when we were in close contact with him.”

But after the trial, the case faded away.

During the investigation, former CVS benefits manager Anthony Puccio told investigators that CVS chief executive Tom Ryan had told him that Irons could be the broker on a new CVS employee contract with Blue Cross, according to Puccio’s lawyer, C. Leonard O’Brien.

CVS didn’t use a broker on any of its other health-insurance contracts in other states. And the Blue Cross executive who negotiated the contract said Irons wasn’t involved, and that he refused to pay Irons until being overruled by his superiors. Blue Cross, in an agreement last year to avoid prosecution, took responsibility for the wrongful conduct of its executives in lobbying Irons while knowing that they were also paying him insurance commissions.

Ryan and Irons were friends, flying to the World Series and the Augusta National golf course on the CVS corporate jet. And Irons took CVS’ side on contentious legislative battles, opposing pharmacy choice.

Even without Celona’s testimony, Irons’ record and actions on pharmacy choice were clear. But unlike Celona, who sent a blizzard of e-mails and faxes regarding his efforts on behalf of CVS and Roger Williams, there was no such paper trail for Irons, who denied ever discussing the legislation with Ryan. Additionally, his lawyer says that he earned the commissions for servicing the contract.

In January, a federal appeals court, in reversing the conviction of former Roger Williams president Robert Urciuoli, made it harder for prosecutors to connect the dollars, as in Irons’ insurance commissions, to the bills that he allegedly killed in return for the money.

The court noted that Rhode Island has a part-time “citizen” legislature, whose members have to earn a living. Furthermore, state ethics law allows legislators to vote on matters affecting their livelihood provided it doesn’t affect them any more or less than any other people in their profession.

“The lines are not clearly drawn in Irons,” said O’Brien. “It was a dilemma for prosecutors. Influence peddling doesn’t have to be explicit. People say, ‘Understand, this is Rhode Island.’ People know each other. The same connections that might be used in the CVS case are those used for charities, access, networking. It can be unacceptable to some, but not illegal.”

Some of the relationships “can call into question a legislator’s loyalty,” noted O’Brien, “but it is a citizen legislature.”

The Ethics Commission has wrestled with trying to tighten the so-called “class exception,” to limit potential conflicts that are now permissible, but has run into constitutional objections involving the rights of citizen legislators to pursue a living and represent their constituents.

“The idea of a citizen legislature was for the butcher, the baker and the candlestick maker to participate,” said Murphy, the House speaker. “But in this age, in a state so small, where who knows who and whose business might overlap with whose, maybe we’ve outgrown the original model and should consider going to a full-time legislature.”

Last week’s court ruling in the Ethics Commission case against Irons dealt another blow to efforts to police potential conflicts. The judge upheld Irons’ contention that the state Constitution’s speech-in-debate clause protects a legislator from prosecution for his legislative actions. If that ruling, which will likely be appealed to the Supreme Court, holds up, says Barton from Operation Clean Government, “it’s basically a license to sell your vote.”

“Unless there’s an explicit bribe, you can’t make a connection between receiving the money and voting on legislation,” said Barton.

Worse, in the view of reformers, corruption itself is not even illegal under Rhode Island law. Last spring, spurred by Operation Dollar Bill, Attorney General Patrick C. Lynch pushed the General Assembly to pass a law making it a felony to violate the public trust. Public officials can be charged with bribery or embezzlement, but not with outright corruption.

The proposed law, modeled after the federal theft-of-honest services statute that has been used in the Operation Dollar Bill cases, died in committee. Lynch said that there were concerns, including from the Rhode Island Affiliate of the American Civil Liberties Union, about how to define the theft of honest services.

“It probably wasn’t the most well-received piece of legislation up there, but I challenged them: ‘You’re good legislators, step up and show that you support good government,’ ” said Lynch.

Lynch says that he will bring it back next year.

mstanton@projo.com