John A. Celona, the once-powerful state senator brought down by a State House influence-peddling scandal, admitted to ethics violations yesterday and was fined a record $130,000 by the Rhode Island Ethics Commission.

Celona acknowledged that he had done the bidding of executives from the CVS drugstore chain, who agreed to pay him $1,000 a month as a consultant from 2000 to 2003.

Journal Photo / Mary Murphy

Former State Sen. John Celona, left, reads his statement of remorse for his violation of state ethics laws during his hearing before the State Ethics Commission yesterday. He admitted to 10 violations and was fined a record $130,000. With him is his lawyer, Lauren Jones. Celona's wife, Colleen, is on the left behind him.

The former longtime politician from North Providence also admitted that he had used his public office to obtain money from Blue Cross & Blue Shield of Rhode Island, for a cable television show and from the New England Ambulance Co. as a consultant, and that he failed to disclose his financial dealings to the Ethics Commission.

"This was no neophyte, but a career politician," said Jason Gramitt, the commission's prosecutor, calling Celona's actions "willful and egregious."

Celona, who pleaded guilty to federal corruption charges last year and faces the likely prospect of prison and additional fines in his criminal case, is cooperating with the FBI's continuing investigation. Given his guilty plea, Celona never considered fighting the ethics charges covering the same conduct, his lawyer said.

"I'm sorry," Celona told commission members as his wife looked on. "I'm sorry that I let my personal financial needs overwhelm my duty to be a good senator."

Celona told the commission that he didn't set out to be a corrupt politician, in a political career dating back to his days as a high school student in the state's Model Legislature, but "at some point I knew I had stepped over the line."

"I'm ashamed," he said. "I was raised to be honest by hard-working and ethical parents. . . . I spent years in politics trying to do the right thing. I'm ashamed for myself, I'm ashamed for my wife, who I love deeply, I'm ashamed for my two sons who I love as well. . . . I'll regret these actions for the rest of my life."

By accepting responsibility, Celona said, he hoped "to salvage whatever honor I have left."

THE CASE that commission prosecutor Gramitt outlined yesterday mirrored the federal charges that Celona pleaded guilty to last year.

But Gramitt's summary also provided new details regarding the conduct of CVS, at a time when the federal criminal investigation has shifted its focus to the nation's largest drugstore chain, which is headquartered in Woonsocket.

According to people familiar with the case, Celona has testified before a federal grand jury about his work for CVS, and federal investigators have subpoenaed records from the drugstore chain and sought to question other CVS employees.

CVS said in a statement that it would be "inappropriate" to comment on Celona in light of the ongoing criminal case. CVS "continues to cooperate with the government in this investigation."

According to Gramitt, CVS decided to hire Celona as a consultant in 1999, after the drugstore chain's State House lobbyist, Joseph Walsh, suggested that two CVS executives meet with Celona.

Walsh, an ex-Warwick mayor and prominent lobbyist whose clients include the beleaguered Beacon Mutual Insurance Co., did not return calls yesterday seeking comment.

During the 1999 legislative session, Celona had supported pharmacy choice legislation that would have allowed Rhode Islanders to fill their Blue Cross prescriptions anywhere in the state. CVS, which had set up its own restricted network with Blue Cross, opposed the legislation.

In the fall of 1999, said Grammit, Walsh and CVS executives Jack Kramer and Carlos Ortiz met with Celona at the State House. They discussed pharmacy choice and other issues.

That led to a second meeting, a few weeks later, at CVS headquarters, of Kramer, Ortiz and Celona. That day, the men agreed that CVS would hire Celona as a consultant.

Gramitt said it wasn't clear who initiated the idea, but both sides agreed, and CVS drafted a consulting contract that began paying Celona $1,000 a month in 2000.

In 2001, Celona became chairman of the powerful Senate Corporations Committee. Late that session, Ortiz drafted a bill that would have allowed drugstores to return unused prescription medication to the manufacturer -- which would have been "a financial boon" to CVS, said Gramitt.

Ortiz gave the bill to Walsh to find a sponsor -- someone who, given how late it was in the session, "could move it along," said Grammit. Celona became the prime sponsor and promptly scheduled a committee hearing.

But then Walsh learned that the pharmaceutical companies were opposed, and asked CVS if it wanted a major fight. CVS demurred, and two lobbyists who worked with Walsh on CVS's behalf told Celona to let the measure die.

One of those lobbyists, Patrick C. Lynch, is now the attorney general. He said through a spokesman yesterday that he was unaware at the time that Celona was a paid consultant to CVS.

Gramitt described how Celona killed a pharmacy choice bill in 2003. After the bill had unanimously passed the House, said Gramitt, "lucky for CVS, the matter was referred to John Celona's committee" -- where it died.

In the summer of 2003, CVS was phasing out Kramer as its vice president for government relations and decided to terminate Celona. As a consolation prize, CVS flew Celona to California for a charity golf tournament.

Late in 2001, Grammit said, Celona landed a new client -- New England Ambulance, telling owner John Vernancio that he could "introduce him to key people at health-care centers who handle ambulance runs." In January 2002, Celona began receiving $1,200 a month from the ambulance company.

Celona began another financial relationship in 2002, with Blue Cross, the state's largest health insurer. In March, after having Blue Cross executives Ronald Battista and Thomas Lynch on his cable television show, Celona broached the idea of Blue Cross sponsoring a health-care show on cable TV.

Following a meeting at Celona's State House office, Blue Cross agreed to pay $73,000 to sponsor a dozen 30-minute shows hosted by Celona and a nutritionist, called the Rhode Island Health Update.

Blue Cross wound up paying $6,200 per episode to C.R.I. Communication, a company run by Edward Catucci that produced the show, with Celona receiving $1,000 of that for himself, said Gramitt.

After the first three shows had aired, Gramitt said, someone suggested that it didn't look good for Celona to be co-hosting the show, since he was a senator. Although Celona stopped, he continued to be paid $900 per episode, or a total of $10,605 from the fall of 2002 to the fall of 2003, for his contributions as a consultant, said Gramitt.

Unlike his consulting work for the Village at Elmhurst assisted-living center, which was then an affiliate of Roger Williams Medical Center, Celona did not report his financial dealings with CVS, Blue Cross or New England Ambulance.

Ironically, Gramitt noted, Celona could have prevented some of his troubles had he simply written consultant on his financial-disclosure forms, without identifying individual clients. But that would have led to the inevitable questions -- what kind of consultant was he, and who were his clients?

When The Journal later revealed those arrangements, the ensuing scandal led to Celona's resignation from the Senate, the ethics complaints resolved yesterday, and state and federal criminal investigations.

Early this year, longtime Roger Williams Medical Center president Robert A. Urciuoli and two others were indicted on corruption charges for allegedly using Celona to do their bidding at the State House. Celona has admitted to charges of selling his office to Roger Williams, and is expected to testify when the three go to trial this fall.

Federal officials have declined to comment on when or if additional charges can be expected regarding CVS, Blue Cross or possibly others at the State House.

IN ADMITTING to 10 ethics violations yesterday, Celona faced a maximum fine of $25,000 per count, for a total of $250,000.

His lawyer, Lauren Jones, argued for leniency, citing Celona's cooperation in the criminal case, his acceptance of responsibility and his strained personal finances. Celona works as a loan officer at New England Funding, in North Providence, but business is slow and his savings are depleted, he told the commission.

Gramitt recommended an $85,000 fine. But after meeting behind closed doors, the commission decided to fine Celona $130,000 -- an amount that several commissioners said they believed was the largest ever levied.

"This," said commissioner Ross Cheit, "is really egregious behavior."

mstanton@projo.com / (401) 277-7724