State budget is out of whack and the local economy is sucking wind? Check.

Dems run the show in the legislature, and Republicans can't get a foothold? Check.

Quintessential boondoggle involving dubious activity (around the Central Landfill)? Check.

Corruption trial? Check.

Just another day . . .

Both via BeloBlog:

PROVIDENCE -- Former House Majority Leader Gerard M. Martineau this morning was sentenced to 37 months in prison on corruption charges.

Judge Mary M. Lisi also ordered him to pay a $100,000 fine and serve two years of supervised probation following his release.

He will have to report to a prison to be determined by 2 p.m. March 14.

Martineau, a longtime state representative from Woonsocket, pleaded guilty in November to corruption charges for steering legislation that benefited the CVS drugstore chain and Blue Cross & Blue Shield of Rhode Island, with which he had plastic and paper bag contracts worth more than $800,000.

Martineau was sentenced in U.S. District Court, Providence. He faced a maximum of 46 months and a fine of $1.8 million on each count.

Elsewhere:

Former [Lincoln] Town Administrator Jonathan F. Oster, who was convicted yesterday of bribery and conspiracy, is dead, the victim of an apparent suicide, Lincoln Town Administrator T. Joseph Almond said.

Almond gave no other details and said the matter is being handled by State Police.

A Superior Court jury returned its verdict yesterday afternoon, after deliberating less than two days. It found him guilty two counts of bribery and two counts of extortion for actions he took while town administrator from 2000-2002.

Bill Harsch, a two-time loser in his runs for AG against Patrick Lynch, has been appointed by Governor Carcieri to the state Ethics Commission.

Deborah Cerullo, who matches Arlene Violet in having a religious (nun) and prosecutor background, has also been appointed.

From the Gov:

Cerullo, a Catholic nun who served as an Assistant District Attorney in both Massachusetts and New York, replaces George Weavill, Jr.  Her term expires on September 1, 2011. Harsch, a Providence attorney who previously served in the Carter Administration and in Rhode Island state government, replaces James C. Segovis. His term expires on September 1, 2012.

     

“Despite years of effort, Rhode Island’s political system is still beset by many ethical challenges,” Governor Carcieri said. “The Rhode Island Ethics Commission needs the leadership to not only prosecute misdeeds under the existing rules, but also to ensure that the current rules are sufficient to cover all the potential conflict of interest situations in state and local government. I firmly believe that Sr. Cerullo and Bill Harsch will provide that leadership.”

     

“In seeking individuals to serve on this critical board, I sought independent thinkers who held promise to be proactive, staunch defenders of the public's interest in ethical government,” the Governor said. “The Ethics Commission is at an important crossroads in meeting its constitutional mission, and as a matter of moving forward I put a premium on strong personal integrity in choosing these appointees.”

Governor Carcieri deserves credit, as does executive director Kent Willever, for strengthening the Ethics Commission from this point when it was mired in conflict.

This just in from the US attorney:

United States Attorney Robert Clark Corrente announced today that his office intends to retry the case of U.S. v. Robert Urciuoli and Frances Driscoll, two former hospital officials accused of corruptly employing a state senator to advance the hospital’s agenda.  On January 18, the U.S. Court of Appeals for the First Circuit reversed the convictions over the issue of how broadly to define “official acts” of a state legislator.

 

U.S. Attorney Corrente released this statement:

 

We have reviewed carefully the Court of Appeals’ opinion in these cases.  The court vacated the convictions because it believed that the instructions to the jury on honest services mail fraud permitted the jury to convict for conduct relating to the issue of rescue runs to Roger Williams Medical Center.  Although the court stated it was “fairly debatable,” it held that this conduct did not violate the federal honest services law.  At the same time, however, the court held that Mr. Urciuoli could be prosecuted for using former Senator Celona to coerce health insurers into settlements with Roger Williams Medical Center.  Moreover, as the court noted, the defendants did not challenge the convictions as they related to using former Senator Celona “to promote or block legislation to favor Roger Williams.”

 

We believe that the central allegations of the indictment remain essentially unaffected and that they remain well-founded.  Accordingly, we will retry the case against both Mr. Urciuoli and Ms. Driscoll.  We will consult with the District Court and with counsel about scheduling, and we will be ready to go as soon as the court can accommodate us.

From BeloBlog:

In a major decision announced this afternoon, a federal appeals court has vacated the corruption convictions of two former top Roger Williams Medical Center executives and ordered a new trial.

Robert A. Urciuoli, the former president of the medical center, and Frances Driscoll, former senior vice president, had appealed their convictions for paying former state Sen. John Celona to advance the hospital's agenda at the State House.

The former executives argued to the three judge 1st U.S. Circuit Court of Appeals panel that the jury had gotten faulty instructions from Judge Ernest C. Torres in U.S. District Court in Providence.

In October 2006 verdicts, Urciuoli was found guilty of conspiracy to commit "honest services" mail fraud and 35 counts of "honest services" mail fraud, or aiding and abetting such fraud. Driscoll was convicted of one count of "honest services" mail fraud. Execution of their sentences was stayed pending their appeals.

Read the decision by the appeals court.

While most everyone was focused yesterday afternoon on New Hampshire, the office of Attorney General Patrick C. Lynch released a statement about a proposal to counter public corruption.

Although it seems a bit unusual for this kind of thing to drop shortly before 5 pm on the day of the primary, it also marks a retort of sorts to gripes about the feds typically taking the lead in corruption prosecutions.

Attorney General Patrick C. Lynch [yesterday] announced that he is submitting legislation that would, for the first time, put a strong public corruption felony statute on the books in Rhode Island.

 

The Government Integrity and Public Accountability Act of 2008 will, if enacted, create a new chapter of law entitled Crimes Against the Public Trust under which the criminal offense, theft of honest services, will allow the state to vigorously prosecute those violating the public trust. The new law, modeled on the federal statute that was enacted in 1988, would apply to public servants at all levels — from elected officials to state, municipal, and town employees, and contract employees.

 

“The citizens of Rhode Island need assurances that their government, at all levels, is working to further the public good,” Lynch said. “This legislation provides a safeguard for government integrity, gives us the means to return stolen money to the state’s general fund, and, most importantly, a means of prosecuting those who choose to abuse the public trust. We have the will to get the job done, but not the way. This bill gives us the way.”

 

Lynch’s bill includes a provision, much like criminal forfeiture, that enables the state to civilly pursue recovery of any monies that the public servant unlawfully received in the course of a violation knowingly committed in an official capacity, if the public servant has been convicted of a felony or a misdemeanor.

 

“The money recovered would be allocated to Rhode Island’s general fund, where it rightfully belongs,” Lynch said. “The state is the victim. It is the residents of our state who are harmed and adversely affected. It is the residents of Rhode Island who suffer each time another public corruption offense takes place. With a looming $500 million state budget deficit and a sluggish economy, state leaders need to transform government. This bill is integral to accomplishing that transformation.”

 

Another provision of the bill would amend Rhode Island General Laws 12-12-17 to extend the statute of limitations for crimes against the public trust from three years to 10 years.

Need a laugh after yesterday's aggravation? P+J might have what you're looking for:

Phillipe + Jorge are alerted to how Las Vegas plans to create a museum paying tribute to organized crime and the role played by the Mob in creating this living monument to neon, excess, kitsch, Elvis, and gambling in the Nevada desert. We assume there will be splendid and inspired touches like the Meyer Lansky Gift Shop, where you can launder your gambling money, and the Bugsy Siegel Wing, with tour guides who bitch-slap the folks entering the joint.
 
This sparks an idea in P+J’s fertile imaginations. If it’s good enough for Lost Wages, it’s good enough for the Biggest Little, especially when Harrah’s and the Narragansett Indians basically gave us the same message last year.
 
So how about a Providence Mobster Museum and Hall of Fame on Federal Hill, to celebrate our bygone years as New England’s headquarters of organized crime? We have plenty to glorify, since Providence gangsters still get play in contemporary works, like The Departed and The Sopranos. And that doesn’t even get into past dark deeds at City Hall, which should warrant an entire floor, with dioramas depicting Joe Doorley slumped behind his desk with a drink in his hand, the Bud-I browbeating hang-dog members of the University Club, and Frank Corrente slipping an unmarked envelope into his pocket while a camera hidden in a briefcase rolls tape.
 
We could add a Disneyesque animated robots kick line of cops, firefighters, and public works employees doing their Rockettes’ impersonation while singing “Look for the Union Label.”
 
What better time to launch such a project, when the current mayor of Our Little Towne, David “Little Chi-Chi” Cicilline, just happens to be the son of the famed defense lawyer Jack Cicilline, who defended a number of clients with dubious pasts and associates, such as one Raymond L.S. Patriarca, a sweet, charming, shy, mysterious, diamond geezer of a guy.
 
Jack deserves special mention, because he always assured us that there was no such thing as the Mafia. Hey, just a bunch of old “hats” standing outside social clubs on the Hill, minding their own business, if you please. And what body in a car trunk? He was probably just looking for his spare tire when he fell in, shot himself in the back of the head, and locked himself in.
 
Ah, imagine the glory of the opening day for such a paean to our past. How lovely it would be to see little children playing stickball in the street on a beautiful summer day on Atwells Avenue, across from the new museum on the site of the former Patriarca-owned Coin-O-Matic vending machine company.
 
Sinatra songs will be pumped into the air as we inaugurate the first class of honorees with plaques that include both head-on and profile images of the new Hall of Famers, a la police mug shots. Raymond, Junior, Baby Shacks, Buckles, the Saint, and the Moron, we salute you!
 
Not for nuthin’, but it brings a fuckin’ tear to your eye, know what I mean?

From the US Attorney's office:

The United States Government and Blue Cross & Blue Shield of Rhode Island (BCBSRI) have reached an agreement under which the insurer will pay $20 million to resolve matters related to the government’s ongoing public corruption investigation. BCBSRI has also agreed to a series of ethical reforms concerning the insurer’s relationship with state officials.

 

 United States Attorney Robert Clark Corrente and Assistant Attorney General Alice S. Fisher of the Criminal Division announced the agreement, which the parties signed today.

 

Former State Senator John Celona and former House Majority Leader Gerard Martineau have pleaded guilty to public corruption charges as part of this public corruption investigation.

 

 BCBSRI acknowledged in the agreement that while lobbying Celona on legislation, its executives caused the insurer to pay $74,000 to a communications company to produce a cable access program hosted by Celona. Celona was paid $13,565. Likewise, BCBSRI acknowledged that, while its executives were lobbying Martineau on legislation, members of the insurer’s executive management caused the insurer to pay about $175,500 to a business run by Martineau for the purchase of paper prescription bags.

 

BCBSRI further acknowledges that it paid $400,000 in insurance brokerage commissions to an unidentified former Rhode Island Senate President while its executives were lobbying him concerning legislation.

 

As part of the agreement entered today, BCBSRI will continue to cooperate fully with the government’s ongoing investigation. As long as BCBSRI complies with the terms of the agreement, the government agrees not to criminally prosecute BCBSRI for any conduct described in the agreement and in the plea agreements of the former state senators.

 

 BCBSRI acknowledges and accepts responsibility for conduct of certain former executives, who caused the payments in question to be made, knowing that its executives were lobbying the legislators. The company also acknowledges that the executives were acting within their apparent authority as executives of Blue Cross Blue Shield of Rhode Island. The agreement also notes that BCBSRI has already replaced certain members of its executive management team.

 

Under the terms of the non-prosecution agreement, BCBSRI has agreed to pay $20 million to the government and not to seek any rate increases specifically to recoup the $20 million. The money will go into a fund to be administered by the Rhode Island Foundation. The earnings and interest from the $20 million fund will be used to support projects designed to provide quality, affordable health care services in Rhode Island.

 

BCBSRI has also agreed to a series of ethical reforms that it has already implemented and will maintain.  These reforms include: compliance oversight by a Corporate Compliance and Ethics Committee; a full time corporate compliance officer and ethics department; a code of ethics governing the conduct of directors, officers and employees; and ethics training programs. The insurer also agrees to hire a government-approved monitor to oversee its ethics reform and its compliance with the agreement. The monitor will be in place for at least two years.

US Attorney Robert Clark Corrente is due to start a news conference at 11, regarding a matter of, yep, "public integrity."

Meanwhile, Mike Stanton reports today on how yesterday's Blue Cross news is related to Operation Dollar Bill.

As coincidence would have it, both the ProJo's Charlie Bakst and Mary Ann Sorrentino, writing in the Phoenix, take a look today at the intersection between URI, basketball, and CVS CEO Tom Ryan.

Bakst first:

We are at the University of Rhode Island’s terrific $54-million Thomas M. Ryan Center and here is Thomas M. Ryan himself.

It’s halftime at Tuesday night’s URI-Providence College game. The five-year-old arena is packed, the Rams are leading, and Mr. CVS, who donated $2 million and whose company gave $3 million, tells me the place turned out exactly as he had hoped. “This is a perfect college basketball atmosphere,” the URI alum declares, accurately.

It wasn’t the best moment, but I felt I had to ask Ryan about corruption: Two former lawmakers have pleaded guilty to selling their office to CVS; two former company officials are under indictment. What does Ryan want you to know of CVS? “It’s an ongoing investigation and we’re cooperating and we think the justice system will work its way.”

The rest of Charlie's piece is devoted to the love that local pols, even those that didn't go to URI, hold for the school's basketball team.

Sorrentino, by contrast, writes about how Ryan, whose company has come under scrutiny in Operation Dollar Bill, the ongoing federal probe of State House influence-peddling, and US Attorney Robert Clark Corrente -- the guy directing the aforementioned action -- are considered "regular guys."

Asked if he ever worries that the university could be embarrassed if the CVS probe blows up, [URI President Robert] Carothers prefers not to speculate.
 
He confirms that Ryan and former State president William V. Irons still regularly attend URI basketball games, sitting in the same row opposite former governor Lincoln Almond, a one-time US attorney himself.
 
Carothers notes that Ryan deals daily with the major issues typical of a big national company. He stresses that Ryan travels widely and is not necessarily focused on “what is happening in Rhode Island.”
 
Regarding Ryan’s $2.5 million personal gift to URI — which was made public just hours after [Carlos] Ortiz and [Jack] Kramer were indicted — Carothers blames the university for the questionable timing, saying that Ryan made the gift long before the press release was issued.
 
Though he says he “thought about” the vacancy created by the stepping back of US District Court Judge Ernest Torres, Corrente is committed to doing as much as he can in his “time-limited” job — which, he notes, depends on the “political landscape.”
 
Corrente meets regularly with his staff and keeps his fingers on the pulse of the ongoing investigations.
 
Similarly, despite Ryan’s public silence, one can assume that a CEO who calls a manager about one store’s lighting probably doesn’t like being kept in the dark about more important matters.
 
Rhode Islanders, meanwhile, wait for the next installment in this drama starring two unlikely “regular guys.”

House Speaker William J. Murphy just returned the call I placed earlier today to his spokesman, Larry Berman. Murphy declined to answer questions about the issues surrounding the tax break not received by Duie Pyle, but he did share these words, seemingly reading from a statement and making some contemporaneous changes:

The project status tax break for Duie Pyle was a back-burner issue that has turned into a political football. It’s time to set the record straight.

 

The Duie Pyle project status proposal was never in Governor Carcieri’s budget that he sent to the House of Representatives. The House Finance Committee held a public hearing on May 23, 2007, concerning EDC’s request for project status for Duie Pyle. No one from the governor’s office showed up to testify in favor of the proposal for project status. No one from the Town of Johnston came to testify in favor of the Duie Pyle proposal. No one from Duie Pyle nor their representative testifed in favor of their proposal for project status.

 

When the House Finance Committee approved its budget on June 8, the Duie Pyle proposal was not in the budget. As per House rules, the budget remained on the desk for seven days. And at no point prior to or on June 15, 2007, when the budget came before the full House of Representatives, did any member of the House of Representatives move to amend the budget by offering any amendment on the Duie Pyle project status proposal.

 

Yesterday, October 29, 2007, was the first time that I heard from Governor Carcieri concerning Duie Pyle. The company has held a groundbreaking and begun operations in the state of Rhode Island without receiving a tax break. In a very difficult year, the House Finance Committee’s decision has saved $330,000 for the taxpayers of this state.

 

I have not met anyone from the Duie Pyle corporation. I have heard some very positive things about the company. And I am glad that they are in Rhode Island. The issue at hand is similar to the Brown & Sharpe/Hexagon proposal in 2005, when the General Assembly held firm and refused to go along with the governor’s proposal to build a new building for the company at taxpayer expense.

 

The Assembly in 2005 was able to develop legislation to keep Brown & Sharp/Hexagon here, and to protect taxpayers of Rhode Island. In my opinion, the Duie Pyle issue has become this year’s political football and it did not seem to be a concern of the above-mentioned parties while the process was proceeding.

Jeff Britt, a central figure in the FBI's investigation of possible State House chicanery and A. Duie Pyle's non-receipt of a $333,000 tax break, was previously Governor Carcieri's liaison to "dissident Democrats" in the General Assembly.

A few years ago, these dissident Democrats mounted an unsuccessful challenge to House Speaker William J. Murphy.

Today, Mike Stanton reports,

Though Rhode Island House Speaker William J. Murphy says he didn’t know about a proposed tax break for a Pennsylvania trucking company, a Johnston lawmaker says that he told a federal grand jury recently that he spoke to Murphy in the waning days of the 2007 session about the legislation.

Rep. Stephen R. Ucci, D-Johnston, testified that he took his concerns to Murphy that Senate Finance Chairman Stephen D. Alves was purportedly opposed to the tax break because the Town of Johnston had failed to invest pension funds with Alves, a stockbroker. The legislation — which would have granted a $330,000 tax break to A. Duie Pyle for bringing jobs to Johnston — died at the State House in June and has since become the subject of an FBI corruption investigation.

Could the demise of Duie Pyle's tax break, perhaps, be related to Murphy's presumed pique toward Britt? This theory has gained at least a little consideration at the State House.

Stanton's story includes this:

Murphy declined to talk to The Journal yesterday, instead issuing a statement that the House Finance Committee, after a public hearing, determined that the tax break for Duie Pyle “was not worthy of further consideration.”

“If circumstances should change, the matter could be revisited in the future,” Murphy’s statement continued.

As for whether he or other House leaders have been contacted by federal investigators or subpoenaed to appear before the grand jury, Murphy’s statement said, “Unlike others, I will not comment on any questions involving purported court proceedings in the above-entitled matter.”

 I placed a call this morning to Larry Berman. If he gets back to me with comment, I'll post an update.

The ProJo's Mike Stanton offered a well-etched piece yesterday about the retirement from the FBI of W. Dennis Aiken, one of the best sources for whom an investigative reporter could hope.

Although some of the background will be familiar for readers of Stanton's The Prince of Providence, Aiken's departure, after a lengthy career investigating corruption and other crime, is significant in itself, particularly for those following Operation Dollar Bill:

Some people will be happy to see Aiken go. He understands this. Told that others may be nervous, given that his departure may signal that much of his work is done, Aiken says, “They should be.”

Stanton describes Aiken's listening ability as a key part of his success:

Beyond the documents, it’s all about getting someone to tell you what happened.

“People have a desire to tell you the truth,” says Aiken. “You just have to find the common ground. I try to be up front with people and not try to trick them. Though they may be adversaries in the beginning, I look at them as potential witnesses later on, and try to treat them with respect.”

Aiken's conversational ability figured prominently in the source-confidentiality case a few years back involving WJAR reporter Jim Taricani.

As I wrote in 2004:

So there was Taricani, a news veteran familiar with the frequent juxtaposition of local politics and criminality, having a cup of coffee at the Au Bon Pain near Providence’s federal courthouse on the morning of his November 18 trial, when in walks W. Dennis Aiken, the FBI agent who led the effort to nail Cianci.

Taricani, who has known Aiken for more than 20 years and considers him a friend, says the agent "puts his arm around my shoulder, shakes my hand, and says, ‘Good luck today.’ " The two men proceeded to talk, Taricani says, about special prosecutor Marc DeSisto’s attempt to identify the source of the leaked videotape by getting those who had access to it to sign waivers that would release reporters from promises of confidentiality. Taricani, describing how prosecutors can pressure people to sign the documents, allowed that his source had already signed such a waiver, and that DeSisto had shown it to him. Thus, in a move that Taricani says was unintentional, he made it possible for the prosecutor to identify his source as lawyer Joseph A. Bevilacqua Jr., since his waiver was the only one that DeSisto had shown Taricani. "It’s my mistake," Taricani told the Phoenix in a recent interview. "I have to take responsibility for it."

Taricani says Aiken’s "very jovial and very friendly" manner led him to think they were talking "Dennis to Jim, rather than agent versus reporter," adding, "I didn’t think for one minute that he was going to use this information." Aiken, however, thought otherwise, reporting their conversation to US Attorney Robert Clark Corrente (no relation to Frank Corrente, the Cianci bagman caught on tape), setting the stage for DeSisto’s blockbuster December 1 announcement that he had identified Taricani’s source as Bevilacqua.

. . .

There’s the utter irony of how Taricani, after steadily refusing to reveal his source for several years, unwittingly did so during his November 18 coffee-shop conversation with FBI agent Aiken. (Not that you’d necessarily glean this from the local media coverage. The "chance encounter" between the two men, described in a court filing by DeSisto, wasn’t mentioned until the 30th paragraph of Tracy Breton’s December 2 story in the Providence Journal. Breton says the placement reflected a decision to build a chronological narrative based on how Bevilacqua got the tape and how Taricani got it from him.)

Even now, Taricani questions whether his chat with Aiken was truly a "chance encounter." The Au Bon Pain where the reporter was having his coffee is located in the lobby of 50 Kennedy Plaza, which also houses the US Attorney’s Office. "This could be very far-fetched," Taricani cautions. But he saw Richard W. Rose, the lead prosecutor in the Cianci case, come into the coffee shop that morning, and he doesn’t know whether Rose saw him. Within a very short time after Rose left, Aiken turned up, without a coat (the Providence FBI office is located in a different building around the corner). The coincidence leaves Taricani wondering, "Was Dennis Aiken [who could have been upstairs at the US Attorney’s Office, where Rose might have alerted him to Taricani’s presence] cooperating with Marc DeSisto, and did he purposely bring up this thing and try to get me to say something about it? I have questions in my mind." (Aiken did not return a call seeking comment.)

CVS and Blue Cross & Blue Shield of Rhode Island have been shown to figure in the ethics scandals of former state Senator John Celona and former House majority leader Gerry Martineau. Yet Bob Arruda, the longtime Operation Clean Government stalwart who now has a lead role with the Rhode Island Statewide Coalition, blames legislators for setting the environment that allows corrpuption to take place in Rhode Island.

While asserting that many lawmakers do good work, Arruda, during a taping this morning of WPRI-WNAC's Newsmakers, faulted those who break the law for creating a "pay to play" environment for corporate entities. Arruda said he expects "a number" of legislators to be indicted, and that some corporations will get a close look, before Operation Dollar Bill runs its course.

Arruda had harsh words for the General Assembly's taking off authority from District Court for choosing the top job at the Traffic Tribunal. Referring to previous reforms meant to better insulate judicial appointments from the legislature, he characterized the Traffic Tribunal issue, and the selection of Bill Guglietta for the top post, as another instance of one step forward, two steps back, in Rhode Island.

Lawyer Lou Pulner, who is representing one of the plaintiffs in the same-sex divorce case before the Rhode Island Supreme Court, also appears on this week's show. Newsmakers is broadcast Sunday, at 5:30 am on Channel 12, and at 10 on Fox 64.

A quick audio clip in which House Speaker William J. Murphy expressed sympathy for Gerry Martineau got a lot of play on talk radio this morning, leading some to wonder about his level of sympathy for Rhode Island taxpayers.

This isn't entirely fair to Murphy. If he could do it all over again, the speaker, I suspect, might have put things a bit differently when reporters surrounded him as he emerged yesterday from a budget meeting with the governor. But he's no babe in the woods, and it's fair to take his words at face value.

Yet after the Martineau bit, Murphy, in response to a subsequent question, also said that if anyone did anything wrong at the State House, shame on them and let the chips fall where they may.

Using just part of this conversation offered reassurance for those inclined toward a dim view of the General Assembly, but it didn't tell the whole story.

The latest instance of that timeless Rhode Island tradition -- the perp walk and arraignment of a public figure in a corruption case -- is scheduled in federal court for 3 pm Friday.

The details surrounding former House majority leader Gerard Martineau's plea agreement lend fresh relevance to part of a story that I wrote more than a year ago. While my focus at the time was former Senator John Celona's starring role in the trial of officials from Roger Williams Medical Center, this hit on still-unresolved questions in the ongoing Operation Dollar Bill investigation:

Celona’s testimony has again made clear just how easy it is to focus on scattered instances of legislative corruption in Rhode Island. It’s only fair to wonder, though, about the guys who played a role in doing the corrupting, and about why the private sector isn’t being held to the same standards as the public sector.

Celona got jammed up in late 2003, when the Providence Journal’s Katherine Gregg revealed that CVS, the Woonsocket-based drugstore giant, had made significant and undisclosed payments to the senator, the chairman of a Senate committee overseeing health-care legislation.

This revelation was significant. In a state where the ProJo has long played an outsized role by exposing the mighty — and sometimes prosaic — lapses of predominantly Irish-American and Italian-American legislators, recent years have shown how some of the state’s most powerful private sector entities, including CVS and Blue Cross & Blue Shield of Rhode Island, have figured in the action.

It’s no coincidence that lawyers for the companies and individuals that remain under investigation are attending the US District Court trial of former Roger Williams president Robert Urciuoli and two colleagues.

While the outcome of the ongoing probe of State House influence-peddling remains uncertain, the Roger Williams case shows how federal investigators are starting to address questions about the private sector’s responsibility. And the top question remains just how far this investigation will go.

From US Attorney Robert Clark Corrente:

For many months, this office, along with Public Integrity Section of the Department of Justice, the FBI and other federal law enforcement officials, and the Rhode Island State Police, has been actively engaged in a large and complex public corruption investigation into relationships between Rhode Island legislators and entities that have interests in legislation and activities of the General Assembly. To date, that investigation has yielded a number of convictions, one former state senator is in federal prison, and the Roger Williams Medical Center is operating under the terms of a deferred prosecution agreement.

 

We are here today to announce a major development in the investigation.

 

The United States has charged former House Majority Leader Gerard Martineau with two counts of honest services mail fraud for engaging in extensive and undisclosed personal business dealings with a pharmacy company and a health insurer and, in return, steering the outcome of legislation in which those companies were interested.

 

Martineau is alleged to have been paid more than $900,000 in the two schemes.  A two-count information has been filed today in United States District Court here in Providence, along with a Plea Agreement under which Martineau agrees to waive

indictment and plead guilty to both charges.  Each count carries a maximum penalty of five years’ imprisonment and a fine of $250,000 or twice the amount of gain or loss.

 

 An information is merely an allegation and a defendant is presumed innocent unless and until proven guilty. Even though Martineau has signed an agreement to plead guilty, he has not yet entered a plea. He will have an opportunity to formally enter a plea at a federal court hearing that has not yet been scheduled.

 

In substance, here is what the information alleges. In 1998, Martineau formed a personal business entity called The Upland Group. In reality, this was not a “group” at all – it was just Martineau. Thereafter, he arranged to sell paper bags to the health insurance company, for use as promotional items, and both plastic and paper bags to the pharmacy company for use in its merchandising. In return, according to the information, he used his position to affect legislation that was important to the two companies.

 

Among the most important pieces of legislation was the so-called Pharmacy Freedom of Choice or Any Willing Provider legislation, which both companies opposed.

The office of US Attorney Robert Clark Corrente has called a 2 pm news conference, regarding "a criminal matter involving public corruption."

Two different pots are simmering, heading toward a potential boil -- Governor Carcieri's plan to cut the budget, and the intensifying state of Operation Dollar Bill, the federal probe of the State House.

As I recently wrote, ongoing acrimony between the governor and the General Assembly could result in a prolonged stalemate on Smith Hill. Steve Peoples reports today:

"I’m reading about this in the newspaper. I don’t think that’s very good labor relations,” said J. Michael Downey, president of the largest state employees union, Council 94 of the American Federation of State, County and Municipal Employees.

“Workers shouldn’t be treated this way. Every time they turn around it’s, ‘I’m going to lose my job,’ or ‘I’m going to lose my benefits,’ ” Downey said. “We don’t really know what he’s going to do. We’re sitting here holding our breath until Oct. 15.”

Carcieri plans to release the details — where the staffing cuts would take place, what benefits he would target and what social services he would cut — at a news conference Oct. 15. In the meantime, he pledged to sit down with the General Assembly and labor leaders behind closed doors to discuss his plans.

But as fellow panelist Arlene Violet said during a taping this morning of WPRI-WNAC's Newsmakers, indictments growing out of Dollar Bill could also add to Carcieri's political capital.

Operation Clean Government's Chuck Barton was among the guests on the show. A lot of people would agree with his belief that a more competitive two-party system would enhance Rhode Island's body politic.

Yet local Republicans -- including Carcieri -- bear a chunk of the blame for the perennially anemic state of the party. The governor, after all, came into office with plans for growing Republican representation. But will anyone be surprised, even the with potential fallout from Dollar Bill, if the RI GOP maintains its also-ran status well into the future?

Speaking this morning on the John DePetro Show, Governor Carcieri added his voice to Gio Cicione in calling for state Senator Stephen Alves to resign his Senate Finance Committee chairmanship while he remains under federal scrutiny.

Carcieri called for the state Ethics Commission -- which he has strengthened -- to take a harder line in policing potential conflicts of interest involving legislators.

The governor also said that the state Economic Development Commission, not the General Assembly, the appropriate forum for considering tax incentives deals. Putting this power in the hands of the legislature, he says, unnecessarily politicizes the process. Carcieri said the legislature could still use hearings to offer some oversight on tax incentives.

Yesterday, the state GOP put out a statement encouraging Senate President Joseph Montalbano to ask Alves to resign his chairmanship:

 “Now that it’s clear we know Senator Alves’ activities in office are being investigated by the FBI, there should be no question that the leadership should insist that Senator Alves’ refrain from acting in his official capacity as Finance Chair while such a serious inquiry is underway,” says Chairman Giovanni Cicione.

 “Until this FBI cloud hanging over Senator Alves is resolved one way or another, for him 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.”

Meanwhile, after a seeming lull in Operation Dollar Bill, Mike Stanton reports today that John Celona has been back in town since August.

Speaking of the ProJo, the Sunday version of Rhode Island's statewide daily was on its game yesterday with a quartet of stories that combine to sum up some of the state's greatest challenges:

-- Things had been quiet on the surface for months with Operation Dollar Bill before Mike Stanton swooped in with an update: in short, the FBI is scrutinizing whether state Senator Stephen Alves of West Warwick -- who is no longer in the employ of UBS Financial Services -- killed a tax-incentive measure for a Pennsylvania company to punish Johnston mayor Joseph Polisena for not investing town funds with Alves. While the probe raises questions of a possible pay-to-play scenario, the fact that the company located in Johnston even without the tax-incentive underscores the generally dubious quality of using tax-incentives in economic-development.

-- Katie Mulvaney had the story of how the oysters, quahogs, and crabs that once flourished in salt ponds like Charlestown's Foster Cove have become scarce, most likely because of development.

-- Steve Peoples recounts the growth of the state Department of Children, Youth and Families, whose budget has increased to about $230 million, from $30 million in the early '80s, and how despite that, the state's child welfare chief is leaving DCYF because, he says, Governor Carcieri has not properly prioritized protecting vulnerable children.

-- Writing in the business section, Benjamin Gedan notes how hundreds of layoffs at Amgen are raising serious questions about the state's biotech sector.

In short, corruption remains a concern, the environment is going to hell, social dysfunction is rampant, and the economic outlook is, at best, mixed. Any questions?  

Departing Representative Peter Ginaitt of Warwick, who has attracted bipartisan plaudits, leads the cast of guests on Newsmakers this week. (The show is broadcast Sunday, at 5:30 am on Channel 12, and at 10 am on Fox 64.)

Ginaitt shared an interesting anecdote off-camera. After being elected during a special election in 1992, he put the usual legislative license plate on a family car. Since sore feelings remained from the state credit union crisis, one unhappy Rhode Islander focused his ire on Ginaitt's wife, spitting at the car while she was in it with their two young children. The episode led Ginaitt to take the legislative plate off the car.

After 16 years on Smith Hill, Ginaitt suggests it's the relative small number of ethically challenged lawmakers who give the General Assembly a bad name.

Speaking of dubious behavior in public office, things have been quite quiet, at least on the surface with Operation Dollar Bill, the federal probe of legislative influence-peddling.

After striking a high profile with this probe, US Attorney Robert Clark Corrente still needs to deliver.

Longtime RI broadcaster Ron St. Pierre, who maintains friendly ties with former Providence Mayor Vincent A. "Buddy" Cianci Jr., asserts that Buddy has "no bitterness" about his lengthy stay in federal prison and will have "no agenda" upon his return to Providence.

While some have speculated that Buddy, who is considered likely to take up a talk-show perch -- perhaps as colleagues with St. Pierre, John DePetro, and Dan Yorke at WPRO AM -- will be a thorn in the side of David N. Cicilline, St. Pierre does not expect that to be the case.

Speaking during a taping this morning of WPRI-WNAC TV's Newsmakers, St. Pierre said that Cianci, because he maintains his innocence, has no remorse. (A jury convicted RI's rascal king of a single count of racketeering conspiracy back in 2002.) The show will be broadcast Sunday, at 5:30 am on WPRI (CBS) and at 10 am on Fox Providence.

St. Pierre, who remains in contact with Cianci and has visited him at the federal prison in Fort Dix, New Jersey, says the former mayor has lost about 60 pounds, largely by walking, and has a good tan from spending time outdoors. Without his array of hairpieces, Cianci now resembles the late actor Peter Boyle, St. Pierre said.

Cianci is due to be released later this month to the Coolidge House, a halfway house in Boston, and he has work lined up at Fifteen Beacon, a posh hotel near the Massachusetts State House. (Last year, I wrote about the possible fallout of Buddy's return to Rhode Island.) He is expected to return to Rhode Island following the formal completion of his sentence in July.

The WPRO talker says he has no idea whether Cianci will land a talk-radio gig in RI, although it would be a natural thing for him to do.

The affection held by many Rhode Islanders for Cianci is misplaced, because of the corruption associated with his two tenures at Providence City Hall, St. Pierre said, but as with the Sopranos, there's sometimes little restriction on public fascination with dubious behavior.

Since Buddy Cianci is due to released later this month from the federal prison in Fort Dix, New Jersey (before spending some time in a halfway house), the former Providence mayor is claiming a growing amount of attention. This will rise to a crescendo, of course, the closer that Buddy gets to Rhode Island.

Writing in last week's Phoenix, Mary Ann Sorrentino puts out the possibility that time may have passed Buddy by:

Will local charities want him as honorary chairman, or invite him to their ribbon-cuttings? Will businessmen seek his counsel? Will lawmakers care about Buddy’s ideas on how to get things done? Probably not.
 
Controversy is unappealing for people in positions of power and influence. When Buddy was powerful as well as controversial — when he could still set the wheels in motion to give them something they wanted or needed — the elite was willing to deal with him. Now, the label of controversy sticks while the powerful tail on that engine is gone, and that changes everything.

Offering a different perspective, Charlie Bakst says it would be a disgrace if Cianci, as expected, winds up with a talk-fest gig on WPRO AM:

I’d gone to the Business Expo to see Mayor Cicilline and Governor Carcieri. I wanted to know what they’d think of Cianci’s return to the airwaves.

Cicilline, who prides himself on a record of reform, said, “He’s free to take a job wherever he thinks it’s appropriate. I mean, I think it’s very clear what I’ve done, what we’ve done, in this city over the last four years and what I stand for. … I wish him well in what he does.”

As for the station, Cicilline said, “That’s a business decision they make about what they think will be profitable.”

Carcieri said he was not a big fan of Cianci’s stewardship of the city but, coming out of prison, “he will have served his time and this is a free country.”

If I were an officeholder it would drive me to distraction to think that a hoodlum like Cianci might be on the air every day second-guessing me. It would make me crazy to have aides rush up to me and report, “You’ve got to hear this. He’s talking about you.”

Carcieri laughed and asserted that he doesn’t pay much attention to such things.

 Last summer, I wrote about the possible impact of Cianci's return on City Hall. Meanwhile, Buddy dominated the ProJo's coverage of Operation Clean Government's anti-corruption get-together over the weekend.

News-hungry wretch that I am, N4N ventured out to the local Cumby's yesterday to secure a Providence Sunday Journal after experiencing the problems described in the previous post. It was a good thing that I did, for the ProJo ran off its second consecutive strong Sunday paper in two weeks.

For my money, the best and most enterprising piece was Karen Lee Ziner's tough story about the troubled history of "Carmelo Kercado, the federal government's inspector at the New Bedford factory that was raided last month . . . [He] has a habitual-offender driving record that includes multiple accidents, arrests and convictions for drunken driving, speeding, leaving the scene of accidents and other infractions dating back more than two decades."

Elsewhere:

-- Mike Stanton continued his front-running reporting on Operation Dollar Bill, revealing how investigators have been looking at a $100,000 commission reportedly split by state Senators Stephen Alves and Daniel DaPonte.

-- Charlie Bakst had a good column about the new professional lives of former Linc Chafee aides.

-- Art Martone's sports section continues to impress with a copious amount of Sox coverage. 

Grade: A-

US Attorney Robert Clark Corrente predictably demurred when asked during a taping this week of WPRI/WNAC-TV's Newsmakers about the widening national controversy involving the White House and eight of his fellow federal prosecutors. Not for Nothing, but Corrente, who confirmed his candidacy as a possible replacement for US District Court Judge Ernest Torres, knows how to choose his words carefully.

No big surprise then that the prosecutor was sparse in offering an update on Operation Dollar Bill, the federal probe of State House influence-peddling. Corrente nonetheless makes for a good interview, and the program will be broadcast Sunday at 5:30 AM on Channel 12 and at 10 AM on Fox 64.

While one of his prosecutors previously indicated that seven politicians and an equal number of private sector entities are under scrutiny, Corrente says that this does not amount to 14 separate investigations. When I asked him about the gap of about a year between the indictment of former Roger Williams Medical Center honcho Bob Uricuoli and that of former CVS officials Carlos Ortiz and Jack Kramer, Corrente likened Operation Dollar Bill to a duck gliding on the surface of a pond; it might seem serene on the surface, he said, with a lot of furious paddling going on underneath.

Corrente also said he thinks Rhode Island's ethical climate has improved over the last 10 or 20 years, and that greater public outage about corruption would improve things further. Asked about how Buddy Cianci epitomizes the love-hate relationship that many Rhode Islanders have with wrongdoing and scoundrels, the prosecutor acknowledged Cianci's singular personality while expressing hope that the imprisoned former mayor might be a bit chastened when he returns to Rhode Island later this year. 

Although Governor Carcieri publicly projects a sense of optimism, the state -- to at least some extent -- has gotten bogged down in budget problems and the ongoing federal probe of State House influence-peddling. Despite all this, the governor struck a characteristically upbeat tone during a taping today of WPRI-WNAC's Newsmakers. The show will be broadcast this Sunday, February 11, at 5:30 am on CBS-Channel 12 and at 10 am on Fox 64.

Among other things, Carcieri said he is unfamiliar, beyond press reports, with the political and corporate targets of Operation Dollar Bill. He said he is "infuriated" that corrupt behavior continues to occur in Rhode Island and that it casts a pall over the state.

Carcieri said Michael Marques, the state's top business regulator, will divest his interest in a business involvement with gubernatorial friend Jim Rosati, who oversees Beacon Mutual -- which is regulated by Marques. A related announcement may be made today. 

While the state's structural deficit will remain with the start of the new fiscal year this summer, the governor, based on past experience, remains hopeful about the state revenue estimate to be made in May. Carcieri called tax changes instituted in recent years "some of the most comprehensive reforms of any state in the country," and predicted that Rhode Island's overall economic outlook will brighten with continued efforts.

He didn't bite when I asked about who he would like to see as his successor in 2010. But those who consider him a lame duck have another thing coming, said Carcieri, who vowed to continue pushing hard for his agenda.