US Pharm. 2010;35(9):66-70.
Former Rhode Island Majority Leader Gerard Martineau’s prison sentence for corruption charges associated with taking bribes from CVS and Blue Cross & Blue Shield of Rhode Island will not be reduced following his appeal.1 While this case in and of itself is not necessarily striking to the pharmacy community, the background is a fascinating journey into the political corruption that goes on behind the scenes, even in the smallest of states.
The series of events that will be described here raises the question: What is the difference between a state legislator supporting the political positions of constituents and fraud or abuse of office as a result of direct financial gain to the lawmaker? One of the most important factors that should be understood is that holding office in the Rhode Island General Assembly (legislature), where these events occurred, is considered a part-time position; the pay is quite low, and legislators are expected to hold other jobs to earn adequate income.2 In these so-called “citizen legislatures,” the members of these governmental offices regularly work for companies and organizations that might have proposed laws, amendments to existing legislation, or new policy questions to come before the legislature. Thus, conflicts of interest might be more common in states with this form of government. Obviously, it would be up to the individual legislator to decide whether to be excused from voting when potential or actual conflicts arise or to take other action that informs the deliberative body that there are issues that should be considered when the individual with the conflict speaks in favor of or against a particular issue.
Understand that the Martineau case is nothing more than the antecedent for this story. In addition, although CVS and Blue Cross are named players in this case, this article is not aimed at discrediting them in any way. Any other pharmacy or prescription drug benefit provider could be identified in the same position. In addition, the names of the two chain drugstore executives at the center of this story have been intentionally omitted because their identities are not relevant to the points being made.
The Case
Martineau admitted in February 2008 at his sentencing hearing that he voted in favor of legislation that would benefit CVS and Blue Cross at the same time he was on the payroll of or allegedly working for and financially benefiting from the two companies.3 At no time did he disclose to anyone in the government his conflict of interest.
Pursuant to an agreement with federal prosecutors, Martineau pled guilty to two counts of mail fraud in devising a scheme to fraudulently deprive the state of Rhode Island and its citizens of their intangible right to “honest services” in violation of federal law.4 Basically, this involved using his positions as chairman of the House Committee on Corporations and House Majority leader to exercise inappropriate influence over pending legislation that would affect the operations and, presumably, the profitability of the two companies he was being paid by. He earned roughly $900,000 for allegedly selling paper and plastic bags to CVS and Blue Cross while working to defeat legislation the companies opposed.5
Elected to the Rhode Island House in 1986, Martineau rose to chairman of the House Corporations Committee in 1993 and House Majority leader in 1998. Also in 1998, he left his job as a salesman for a paper and plastic bag manufacturer and created his own company, which he ran out of his house. He sold bags to CVS from 1999 through 2002, when he left office. He earned $716,000 in commissions from CVS during that time and continued the relationship up until the federal indictment was handed down.
At the same time, a Blue Cross executive solicited business from Martineau and billed the company for over 10 million bags although Blue Cross received only 2 million. Martineau received $175,000 in payment from Blue Cross over a 3-year period while he was in office. He stopped selling bags to Blue Cross almost immediately after he left office, and Blue Cross refused to pay him another $195,000 that he claimed he was owed.
Although Martineau faced a prison term of up to 7.5 years, he was sentenced to 37 months of incarceration in a federal correctional facility and fined $100,000. In addition, it was determined that his improper influence peddling had earned him over $900,000, for which he would have to pay restitution.
The sentencing judge noted that while Martineau demonstrated genuine remorse for his actions, his conduct in office was used “in the most perverse way.”6 By accepting the plea agreement as a convicted felon, he gave up any right to appeal his conviction, would relinquish his right to vote, and be barred from ever holding another public office.
In February 2009, Martineau filed an appeal with the sentencing judge asking that his prison sentence, fine, and restitution penalties be reduced to zero using a federal statute that allows prisoners to seek modification of their federally imposed punishment.7 (He did not appeal his conviction, as this avenue was foreclosed by his plea bargain.) The basis for this request stemmed from a Rhode Island Supreme Court decision, decided after his sentencing, that held that Rhode Island legislators have limited immunity for acts in office resulting from efforts by constituents to influence their votes on pending legislation.8 The federal judge ruled that the Rhode Island Supreme Court decision has no bearing on individuals charged with federal crimes. Thus, Martineau’s original sentencing and penalties would not be modified.
The Story Behind the Case
At the time of his sentencing, Martineau was cooperating with federal investigators with an ongoing investigation called “Operation Dollar Bill.” Meeting with the investigators several times, Martineau agreed to appear before a federal grand jury to testify at the corruption trials of two CVS executives accused of paying off Martineau and another state legislator, John Celona. At approximately the same time, Blue Cross agreed to pay $20 million and make other reforms to avoid criminal charges for dealing with Martineau and other legislators.9
Investigation
Earlier, investigators charged former Rhode Island House Representative John Celona with corruption charges following a 4-year probe into influence peddling in the state legislature.10 This is where the focus of this article really begins. During his guilty plea that lead to 30 months of federal incarceration, Celona agreed to help investigators open 14 more investigations involving seven more politicians and seven companies. Celona was charged with having hidden financial ties to CVS and Blue Cross. His testimony led to the indictment of two CVS executives, and evidence and testimony he provided was also critical to the indictment and ultimate guilty plea of Martineau.
In 1998, after Celona voted against legislation opposed by CVS, he received a campaign contribution with a note from a CVS executive stating he looked forward to working with the legislator on future issues of mutual interest.11 The contribution appears to have been $50. A federal prosecutor alleged that this was the beginning of a profitable and corrupt friendship.12 According to documents produced in the case, Celona was hired by CVS as a consultant to be paid $1,000 monthly, and from early 2000 to the fall of 2003 he received about $45,000 along with lavish golf trips to Florida and California, stays in luxury resorts, and tickets to professional sporting events.
With Celona ostensibly hired to improve the public image of CVS, the real scheme was for him to advance the company’s legislative agenda through illicit payments, according to the prosecution. Celona’s efforts at killing legislation that would have opened pharmacy networks to hundreds of other pharmacies (“pharmacy choice”) in Rhode Island that CVS held a grip on “helped protect millions of dollars of sales,” according to one CVS executive.13 While two CVS executives were charged in the bribery case, CVS itself was not indicted. Apparently there was no evidence that the bribery plot extended to other executives who may or may not have known about the Celona and Martineau connections.
On paper, Celona was listed as a “Community Service Consultant” and paid from an account used for consultants and ancillary personnel. Later, without informing other CVS personnel or its lobbyists, payments to Celona were charged to the Government Affairs budget under the heading “political contributions.” Apparently, only the two executives charged in the CVS case were responsible for or even aware of this significant change. The shift was noteworthy because it became an explicit acknowledgement, according to prosecutors, that Celona was now on the payroll as a biased authority—no less than a paid lobbyist—for the company while holding office and influencing the votes of his colleagues.
In 2003, another CVS executive told Celona that the company would have to stop payments to him because of increased public scrutiny. Apparently there was some discussion within the ranks of the executives as to the ethical implications of this arrangement. The termination chat with Celona occurred at a CVS-sponsored charity golf outing in San Diego where Celona’s expenses were paid for by the drugstore.
Drugstore Executives’ Trial
Two CVS executives were charged with 23 counts of conspiracy, bribery, and honest-services mail fraud, all based primarily on paying the representative his monthly stipend and expenses for appearances at CVS-sponsored events. The entire trial consisted of one question: Was Celona hired to help promote the drugstore’s image or to take care of the chain’s financial interests in the Rhode Island State House?
A competitor of CVS testified that Celona had been a steadfast supporter of the pharmacy choice legislation that would have opened up the network of pharmacies that could compete for business in Rhode Island. After Celona went to work for CVS, he opposed the legislation and missed a crucial vote on the legislation. Unbeknownst to the competitor, Celona had become a paid consultant for CVS one month before the roll-call vote was taken.
The star witness for the prosecution against the CVS executives would be the previously convicted Celona, who had admitted selling his office and was serving a 2.5-year prison term for his cooperation in Operation Dollar Bill. Think about that for a second: the star witness against the defendants is a convicted felon whose sentence was based, in part, on his cooperation with federal prosecutors to be a stool pigeon against other alleged felons. Does that raise even an ounce of suspicion about his credibility as a witness?
There was no question that Celona was paid $45,000 by CVS, during which he voted in support of several bills that would favor CVS’s position on political issues. Celona was also paid by CVS to attend golf trips in California and Florida, where he stayed at the posh Pelican Hills Golf Club and the Four Seasons Hotel. In addition, he received tickets to The Oprah Winfrey Show and was given tickets near the dugout at Fenway Park for a Boston Red Sox baseball game.
One of the defendants appeared on Celona’s cable television show (The Celona Statehouse Report) promoting CVS as a good choice for senior citizens who were looking for the best deal on prescription drugs. After the appearance, that defendant made a big deal inside the company about how much he had done for the public image of CVS in the state. Pride goeth before the fall?
Choices
Based on this evidence, would you vote to convict or acquit the CVS executives? Maybe the closing arguments will influence your decision. Celona was on the witness stand for 4 days, three of which were under cross-examination for the CVS defendants. He admitted he did the legislative bidding of CVS while neglecting his other duties as a legislator, all while he was on CVS’s payroll. He also admitted changing his position on the pharmacy choice issue, primarily because of his relationship with CVS. This is all making the prosecution’s case look pretty good, right?
But on cross-examination, Celona was confronted with evidence that he cheated on his taxes, failed to correct his tax problems as agreed to in his plea agreement, and lied to investigators and prosecutors more times that he could remember about his actions. And then there was that niggling detail that he was a convicted felon whose plea bargain and criminal sentence were predicated on his helping the prosecution point the finger at other potential felons. Pretty good facts for the defense, yes?
In fact, they were so good that the defense attorneys did not feel any compulsion to call either defendant as a witness to explain why they paid Celona $1,000 per month as consultant, either for the Government Affairs department or as a lobbyist from 2000 to 2003. Not calling your own clients as witnesses makes for pretty good TV and movie dramas, but in reality this is a gutsy move that can often backfire. Jurors usually like to hear from the defendants, judge their credibility, and listen to their side of the story before rendering a verdict. Not letting them testify deprives jurors of critical information that could make a big difference in the outcome.
Over the course of 5 hours the prosecutors argued that Celona abused his office at the behest of the defendants. The defense attorneys countered that Celona was hired for a legitimate purpose and that the appearance of one of the defendants on his cable TV show was for a genuine cause—to promote health care for senior citizens.
Decision
The jury of eight men and six women reached their verdict in less than 2 hours. The defendants were judged not guilty of any of the 23 counts alleged against them. Reporters who questioned the jurors afterward learned that Celona was not a credible witness—he was a convicted felon who lied about a number of collateral issues and was not truthful about his tax records. He did not truthfully disclose his relationship with CVS or Blue Cross. The jurors no doubt had a hard time finding that he was being frank about his relationship with CVS. The verdict should have been a surprise to no one.
Analysis
As indicated, the Martineau case was just a basis for the beginning of the important lesson here. Martineau’s appeal only led to the primary question under consideration: When does a lawmaker’s influence on pending legislation go from being acceptable advocacy for a constituent’s political agenda to improper—and illegal—corruption of the democratic process?
The facts here are egregious. Both of the legislators crossed the line from support for voters to bribery and fraud. The fact that the folks who offered the illegal gains got off more or less scot-free is practically irrelevant to the central issue of political corruption. There will always be companies and organizations willing to buy a politician. Perhaps the reality of the situation is that there will also be politicians willing to be bought. As this case demonstrates, convicting those who offer the bribes and payoffs is difficult.
The next time you vote for candidates for public office, consider not only their party affiliations and positions on the various issues of importance, but also their integrity. Are they being elected to serve you and the people who vote for them, or are they more likely to be influenced not by just normal everyday lobbying for a position but subject to bribery and fraud? There may be a very fine line between bowing to special interest groups, accepting political contributions, and outright corruption compared to representing the electorate and doing the right thing for the right reasons. At the very least, think about this the next time you vote.
REFERENCES
1. Martineau v. US, Slip Op No. CR 07-129-ML (June 1, 2010). 2010 US Lexis 53605.
2. Full and part-time legislatures. National
Conference of State Legislatures. June 2009. www.ncsl.org/?tabid=16701. Accessed August 15, 2010.
3. Judge: no early prison release for ex-RI lawmaker. Boston Globe. June 2, 2010. www.boston.com/news/local/
4. 18 USC §§1341 and 1346.
5. Ex-R.I. lawmaker given 37-month prison term. Boston Globe. February 23, 2008. www.boston.com/business/
6. See Note 4, supra.
7. 28 USC §2255.
8. Irons v. Rhode Island Ethics Commission, 973 a2d 1124 (RI 2009).
9. See Note 4, supra.
10. Stanton M. Former R.I. House majority leader admits selling office to CVS, Blue Cross. Providence Journal. November 3, 2007. www.projo.com/news/content/
11. Stanton M. 2 CVS officials charged with conspiracy, bribery. Providence Journal. January 19, 2007. www.projo.com/news/content/
12. See Note 11, supra.
13. See Note 11, supra.
To comment on this article, contact rdavidson@uspharmacist.com.
