Ex-CVS Executives Win Acquittal in Bribery Trial (Update3)
Ex-CVS Executives Win Acquittal in Bribery Trial (Update3)
By Jef Feeley and Janelle Lawrence
May 30 (Bloomberg) — Two former CVS Caremark Corp. executives were acquitted of bribing a Rhode Island state senator to secure his backing for the second-largest U.S. drugstore chain’s legislative agenda.
A federal jury in Providence, Rhode Island, deliberated an hour and a half today before exonerating John R. Kramer, 75, and Carlos Ortiz, 64. The men were charged with fraud, conspiracy and bribery in connection with the hiring of former Senator John Celona as a consultant.
“We thought the evidence justified a conviction; the jury didn’t,” Robert Corrente, the U.S. Attorney for Rhode Island, said in an interview following the verdict. “We brought the charges we thought were justified based on the evidence we had.”
The acquittals are the latest setback for a federal corruption probe in Rhode Island code-named Operation Dollar Bill. A U.S. appeals court overturned the earlier convictions of two hospital executives accused of hiring Celona as a consultant to buy his vote. Prosecutors have vowed to retry that case.
Kramer said he was “ecstatic” with today’s verdict. “This has been an unfair and unjust prosecution,” he said.
The government said Kramer and Ortiz, who worked as government-affairs executives at CVS, paid Celona more than $40,000 in consulting fees to drop his support for pharmacy- choice legislation opposed by the company. The bill would have removed limits on where consumers covered by Blue Cross & Blue Shield of Rhode Island could fill prescriptions.
CVS Favored
CVS rivals such as Deerfield, Illinois-based Walgreen Co. and Royal Ahold NV, the Dutch owner of the U.S.’s Stop & Shop supermarket chain, have complained that the restrictions favor Woonsocket, Rhode Island-based CVS.
Celona, a Democrat and once one of Rhode Island’s most powerful lawmakers, was sentenced to 30 years in prison last year after being convicted of fraud. He agreed to cooperate with prosecutors as part of a plea agreement and testified against Kramer and Ortiz.
“I feel bad for” Celona, Kramer said today. “It’s what happens when plea agreements are dangled at people.”
The pair agreed to pay Celona $1,000 a month between February 2000 and September 2003 in return for his help on legislative issues, such as the pharmacy-choice legislation and bills that would have allowed Canadian pharmacies to do business in Rhode Island, prosecutors alleged.
`Honest Services’
Neither Kramer nor Ortiz took the witness stand, relying on cross-examination of the government’s witnesses to show they never intended to bribe Celona and deprive Rhode Island residents of his “honest services.”
After the verdict, Ortiz was asked if he regretted his involvement with Celona. “You always do a lot of Monday morning quarterbacking in these situations,” Ortiz said. “I’ve been doing that a lot over the last three years.”
Lawyers for the pair argued that Celona was hired to promote CVS’s community-oriented programs on his weekly cable-access TV show and not to act as the chain’s legislative ally.
The corruption probe has targeted other Rhode Island political figures. In February, former House Majority Leader Gerard M. Martineau was sentenced to 37 months in federal prison for shepherding legislation that benefited CVS and Blue Cross & Blue Shield of Rhode Island.
While steering the bills, Martineau also was a vendor for the companies, selling them more than $800,000 in paper and plastic bags. Blue Cross agreed last year to pay $20 million to avoid prosecution for its dealings with Celona, Martineau and other legislators.
The case is U.S. v. John R. Kramer and Carlos Ortiz, U.S. District Court, District of Rhode Island (Providence).
To contact the reporter on this story: Jef Feeley in Providence at jfeeley@bloomberg.net; Janelle Lawrence in Providence at jmlawren@aol.com.
Last Updated: May 30, 2008 13:50 EDT
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