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Drugstore industry paid conference tab for R.I. legislators

The free trips for key members of the General Assembly came at the invitation of an industry whose officials lobbied before them.

07:11 PM EDT on Tuesday, May 13, 2008

MIKE STANTON

Journal Staff Writer

This story was originally published Nov. 22, 2004.

From the Atlantic to the Pacific, from the Ritz-Carlton in Key Biscayne, Fla., to the Sheraton Grande in La Jolla, Calif., Rhode Island lawmakers were wined and dined by the national drugstore industry.

In 1997, 1999 and 2001, various legislators in a position to influence pharmacy-choice legislation opposed by CVS were treated to "states issues" conferences of the National Association of Chain Drug Stores.

CVS, the nation's biggest drugstore chain, is a dues-paying member of the association. The company's chief executive, Thomas M. Ryan, served as chairman of the association from 1997 to 1998 and remains on its executive committee.

Gerard M. Martineau, former chairman of the House Corporations Committee and a former majority leader, attended all three conferences, according to the conference programs.

Former Senate President William V. Irons attended two.

Former House Speaker John B. Harwood, former Senate Corporations Chairman John A. Celona and former Senate Majority Whip William Enos each attended one.

The legislation would have opened up a restricted network of pharmacies run by Blue Cross and CVS to outside competitors.

The Rhode Island legislators were invited to the conferences by Paul T. DeRoche, a lobbyist for the Greater Providence Chamber of Commerce and the Rhode Island Retail Foundation. CVS is a member of both groups, he said.

According to DeRoche, the legislators' expenses, including hotel and airfare, were paid by the association.

DeRoche said that spouses were also invited to attend. But he said he couldn't remember whether the wives of any of the Rhode Island legislators went.

In welcoming remarks printed in the program for the 1997 conference in La Jolla, Ryan and the association's president, Ronald Ziegler, former press secretary to President Richard Nixon, said that the Sheraton Grande, with its ocean views and proximity to the world-renowned Torrey Pines golf course, "offers a relaxed atmosphere for state legislators, chain drug store legislative representatives, and NACDS staff and member companies to discuss legislative initiatives affecting community retail pharmacy."

A CVS spokesman said that Ryan didn't attend the conferences.

Enos said that there were presentations from drugstore executives and drug manufacturers on such issues as pricing and profit margins.

"They needed to take high-profile legislators," said Enos. "They invited people who they felt were decision-makers on their issues."

Between work sessions, there was also time for recreation. Enos recalled a spirited round of golf on the famed Torrey Pines course in which he and DeRoche played Irons and Martineau.

"I remember it was getting dark and we were on the 17th hole, a par 5, and Gerry said he had made it to the fringe of the green on two shots, and we said it was three," said Enos, laughing. "Gerry was a little angry, because we took money out of his pocket. I used to kid him about it long afterward. It's always nice to pick Gerry's pocket."

DeRoche said that the four-day conferences, which drew state lawmakers from throughout the country, were held in November, in advance of legislative sessions that usually began in January.

At the 1999 conference, at the Ritz-Carlton on Frank Sinatra Drive in Rancho Mirage, Calif., CVS's director of governmental affairs, Carlos Ortiz, appeared on one panel with Martineau -- "Enhancing the Pharmacist's Resources" -- and another with Irons -- "Confidentiality of Patient Information." In Rhode Island, Ortiz was a registered State House lobbyist who testified before committees chaired by Martineau and Irons.

In the late 1990s, Irons was chairman of the Senate Corporations Committee, where he opposed pharmacy-choice bills that routinely died in his committee. Irons, an insurance agent, had another tie to CVS. Two years earlier, after reaching out to his friend, Tom Ryan, the CVS chief executive, Irons was designated as the broker of record for an employees health-insurance policy with Blue Cross.

Irons has earned well over $100,000 in commissions, although a former Blue Cross executive who helped negotiate the deal claims that Irons wasn't involved in bringing in the business.

Interspersed among the panels at the 1999 Rancho Mirage conference were recreational opportunities, according to the conference program -- a "Jeep Adventure" in the desert outside Palm Springs, a "Ritz Ranch Party" on the hotel's croquet lawn and a golf tournament at the Golf Resort at Indian Wells, which bills itself as "the ultimate golf destination for everyone from pros to presidents."

In 2001, Martineau, Celona and Harwood attended the association's conference at the Ritz-Carlton in Key Biscayne, Fla.

According to the conference program, Harwood spoke about prescription benefit cards. Martineau served on a panel to discuss HIPAA, the new federal medical privacy law. Celona and Ortiz spoke as part of the "Business Program."

At the time, Celona was a $1,000-a-month consultant to CVS. He reported to Ortiz, who was simultaneously involved in CVS's lobbying efforts against the pharmacy-choice legislation in Celona's committee.

Martineau, meanwhile, was a manufacturer's representative who sold plastic and paper bags to CVS and Blue Cross & Blue Shield of Rhode Island, as well as other customers throughout the country. According to Michael Sisti, a former Blue Cross executive who hired him, Martineau explained that he sold bags to drug manufacturers; the bags were printed with the names of various drugs and distributed to pharmacies at chain drugstores around the country to advertise those drugs.

Rhode Island law does not allow lawmakers to take trips from "an interested party" in legislation pending before them. However, because the trips were actually paid for by the National Association of Chain Drug Stores, rather than CVS, the trips may have been allowed.

Since 2000, public officials have been required to report free trips as gifts if the value exceeds $100, according to a state Ethics Commission official.

Martineau, Harwood and Celona have not reported their industry-paid trips in 2001 to Key Biscayne, according to commission records.

Harwood did not return calls seeking comment for this story. Martineau and Celona declined comment.

Irons defended his attendance in 1997 and 1999, saying that DeRoche invited him to attend. While the association paid for his travel and lodging, he said, he did not receive any compensation or speaking fees.

One topic of interest at one conference, Irons said through his lawyer, was Rhode Island's RIte Care health program, which had "gained nationwide recognition." Sharing information helps broaden a legislator's knowledge and ensure "that mistakes that are made in certain states are not repeated by others."

"Senator Irons was honored to participate in meetings such as these and to represent the state and the Rhode Island Senate," said a statement from the lawyer, John A. Tarantino. "We believe that Senator Irons' participation in these meetings and his sharing of knowledge and experience with other legislators was consistent with his role as a Rhode Island legislator, helped him to learn about matters important to the State of Rhode Island and were consistent with applicable rules and regulations of the Ethics Commission."

The entertainment options during the Florida conference included golf at the Crandon Golf course at Key Biscayne; an art deco tour of South Beach in Miami Beach, with lunch at Les Deux Fontaines; and an "Everglades Adventure" with airboat rides through the marshes and saw grass of the Florida Everglades.

According to DeRoche's notes from the Florida conference, he introduced Celona by saying, "John has worked hard to help the business community."

DeRoche introduced Martineau as "instrumental in enacting one of the most important health-care initiatives in years to protect the health care of thousands of Rhode Islanders." DeRoche also praised Martineau's efforts to repeal the capital gains tax, and concluded, "He is truly a friend of the business community."

The National Association of Chain Drug Stores no longer holds the annual conferences for lawmakers, DeRoche said, "frankly, because they couldn't afford it."

But he defended the gatherings as "educational."

"They wanted legislators to talk about issues in their states and compare notes," he said.

Kelly Gannon, a spokeswoman for the NACDS, said that the association draws about 10 percent of its operating budget from drugstore chain members like CVS. She could not say whether CVS's dues helped finance the legislators' conferences.

"These are educational functions," said Todd Andrews, a spokesman for CVS. "Many organizations sponsor educational functions with legislators. It's a way of keeping people informed."

Enos said that he understood that lawmakers were only getting one side of the story, but defended his attendance as "educational."

"I felt comfortable that it met the ethical standards of the day, because I knew where the line was," said Enos, adding that he fought as a senator for stronger ethics laws, and challenged Irons' objectivity in handling legislation of interest to CVS. "Obviously, they weren't holding the conference to tell the opposite side. But it was a great tool for me -- I was able to filter out their bias."

DeRoche, asked why he had recommended inviting Martineau, said: "He was chairman of the Corporations Committee, which handled pharmacy legislation. It was a good opportunity for him to learn what other states are doing."

Martineau was Corporations chairman when he first attended, in 1997. But in 1999 and 2001, he had moved up to majority leader. His successor as Corporations chair and an early advocate of pharmacy-choice legislation, Rep. Brian Patrick Kennedy, D-Hopkinton, said that he never received an invitation.

"I must've been off the list," said Kennedy, chuckling. "I was on the opposite side."

Kennedy criticized lawmakers for taking free trips from industries whose officials lobby before them.

"That's a dangerous practice," he said. "If you're up there at the State House truly representing the people in your district, you shouldn't go off on these little trips sponsored by businesses to espouse their point of view. This can be viewed as they were being bought and paid for by that organization."

mstanton@projo.com