CVS in scandal...but are we really surprised?

Former Blue Cross executive dropped in Operation Dollar Bill probe

01:00 AM EDT on Wednesday, October 29, 2008

By Mike Stanton

Journal Staff Writer

PROVIDENCE –– Thomas A. Lynch, the former Warwick state senator and Blue Cross executive who was a prominent figure in the origins of Operation Dollar Bill, is no longer under investigation in the long-running State House corruption probe.

A spokesman for U.S. Attorney Robert Clark Corrente confirmed yesterday that Lynch was sent a letter last week informing him that he is no longer a target of a grand-jury investigation, similar to a letter that went out on Oct. 15 to former Senate President William V. Irons.

As the $250,000-a-year vice president and chief lobbyist for Blue Cross & Blue Shield of Rhode Island, Lynch drew on relationships developed in his earlier two decades in the Senate to advocate for the state’s largest health insurer. He golfed and schmoozed with lawmakers, paid Irons’ greens fees and rented his family’s Nantucket summer home to the family of then-Speaker John B. Harwood.

Several months before Blue Cross and Lynch parted ways in November 2004, the new Senate president, Joseph A. Montalbano, went to bat for his former colleague, calling him “a friend” who had done a “wonderful job” representing Blue Cross’s interests in the Senate.

But Lynch had also helped put another former senator, John A. Celona, on TV, in a public-access cable show financed by Blue Cross over the objections of Lynch’s subordinates at Blue Cross. At the time, Celona chaired the Senate committee that regulated health care.

After The Providence Journal revealed the arrangement, the authorities launched what quickly grew into a wide-ranging influence-peddling probe. Celona wound up in prison, after admitting to selling his office to Blue Cross, CVS and Roger Williams Medical Center. Last December, Blue Cross avoided criminal charges against the company by taking responsibility for the actions of unnamed former executives in corrupting politicians, and agreeing to contribute $20 million for affordable health care in Rhode Island.

But Lynch, who left Blue Cross in November 2004, will not be charged.

Lynch did not respond to requests for comment. The letter from the U.S. Attorney’s office, dated Oct. 20, was sent to the Boston office of Lynch’s late lawyer, Richard M. Egbert, who died earlier this year.

In an interview last week, Corrente, speaking generally, said some of the cases spawned by Operation Dollar Bill are bumping up against statute-of-limitations deadlines and that prosecutors have to make decisions in the coming months about whether they have enough evidence to move forward.

When Celona was sentenced to 2½ years in prison early last year, a federal prosecutor told the judge that the ex-lawmaker’s cooperation had resulted in active investigations of seven politicians and seven companies. But since then, authorities have seen Celona’s credibility eroded following withering cross-examinations in corruption trials involving Roger Williams and CVS.

Convictions of Celona, ex-House Majority Leader Gerard M. Martineau and former Roger Williams president Robert Urciuoli have been balanced by the acquittals of two CVS executives and, now, the dropped investigations of Irons and Lynch. Other investigations, including one probing the legislative ties of Beacon Mutual Insurance Co., remain active.

Sen. William Walaska, D-Warwick, a business partner of Lynch’s, said the shadow of the investigation has taken its toll. Although Lynch, a lawyer, maintains a law office in Providence, Walaska said Lynch has been selling credit-card services to small businesses. Lynch is also a minority owner in Walaska’s auto-parts business.

“I wonder if they sent him an apology, and a check for the money he spent [on legal fees],” said Walaska. “I’m sure it’s been a struggle. You wake up every morning thinking: Is today going to be the day? It costs you your livelihood. The question is, how can you get it back again?"