October 10, 2007

Re: Corrente: Martineau latest to cop a plea

Monique Chartier

US Attorney Robert Clark Corrente reminds us in his October 9 press release

Even though Martineau has signed an agreement to plead guilty, he has not yet entered a plea.

This presumably will happen on Friday, the day Former House Majority Leader Gerard Martineau (D) is scheduled to be arraigned, according to the Providence Journal.

In the meantime, one item in the Plea Agreement caught my eye.

3. The defendant understands that the Government has developed evidence that the defendant also participated in and favorably influenced the outcome of Capital Gains Legislation at the behest of "The Pharmacy", as that term is defined in the Information, while being paid undisclosed income by The Pharmacy ("the Matter under Investigation"). This Criminal Information and Plea Agreement are intended to resolve all criminal charges related to the defendant's conduct as an elected official involving the Pharmacy and the "Health Insurance Company", as that term is defined in the Information, except for the Matter Under Investigation. The Defendant understands that, becausehe is not admitting to any criminal conduct involving Capital Gains Legislation, he may be charged in the future with an offense or offenses related to the Matter under Investigation. The defendant specifically waives any double jeopardy and statute of limitation protection he may have relative to any such charges.

In short, even if the Plea Agreement is formalized on Friday, US Attorney Corrente may not be finished with Mr. Martineau.


The Providence Journal reports this morning:

Six years ago, legislative leaders Gerard M. Martineau and William V. Irons strongly advocated reducing the Rhode Island capital-gains tax.

Martineau, the House majority leader, called it one of his priorities for the 2001 session.

Irons, the Senate leader, told a Chamber of Commerce group that CEOs such as Thomas M. Ryan of CVS deserved tax breaks, because they helped drive Rhode Island’s economy.

Today, the FBI is investigating that 2001 tax bill as part of Operation Dollar Bill, the federal State House corruption probe — one that could lead straight to Ryan, chief executive of the nation’s biggest drugstore chain.


Business leaders tell The Journal that Ryan was a strong advocate for the tax cut.

Ryan knew about Irons’ insurance business — Irons, through his lawyer, has acknowledged to The Journal that he asked his friend Ryan about getting the business. But CVS refuses to say whether Ryan knew about Martineau’s bag contracts, which Martineau was invited to bid on by another, unnamed CVS executive when the drugstore chain was seeking Martineau’s support on legislation.

Nor will CVS say if Ryan had any meetings or conversations with Irons or Martineau about the capital-gains legislation.

“That is part of an ongoing investigation,” said a CVS spokesman. “We have no comment.”

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And that is exactly as it should be. If he did the crime, he better be ready to do the time.

Posted by: Ben at October 10, 2007 11:25 PM

It'll keep him cooperating until he "bags" even more miscreants - pun intended!

How many Democrats will be left standing once Operation Dollar Bill has cashed out?

Posted by: Ragin' Rhode Islander at October 11, 2007 12:00 AM

what is the capitsal gains legislation???soemthing to do with stock options maybe???

Posted by: johnpaycheck at October 11, 2007 3:51 AM

Who says Assembly Democrats are killing the state's business climate? Look at the effort Martineau and Irons went through to cut taxes for the rich, and this is how the state thanks them?
Justin, does your webmaster provide for a blue sarcasm font?

Posted by: rhody at October 11, 2007 11:04 AM

Does this mean that the ACI could be renamed "The Ryan Center"?

Posted by: Ragin' Rhode Islander at October 11, 2007 11:13 AM


Its worth a look at the before and after tax rates and compare with similar rates in MA and CT. Rhode Islanders are so parochial that they seemingly forget that the people they are expecting the most taxes from have options that are only a 30 minute drive in any direction from anywhere in this state. While you might get people in a functioning, but high tax, state like Minnesota to pay a premium for generally better services, first you need evidence of generally better services. I don't see any.
I am not pleased at the high cost and uncompetitive health care market here and if there is more housecleaning at BC/BS and CVS, then so be it. (I am a 100% co-payer on premiums.)

Posted by: chuckR at October 11, 2007 11:30 AM

I agree with BOTH Rhody and Chuck.

The business climate and tax burden in RI is terrible. Pat Crowley can say this study or that study is wrong, but we all know the truth.

Drive across RI and you'll get a feel for how many new businesses are opening or closing. Look at the neighborhood kid who goes to an Ivy League school on academic scholarship and see where he end up working after graduation. It's usually not RI. Anecdotal, but overwhelming evidence.

As for corporations, Rhody is right. The largest corporations in RI are able to exert enough influence to get what they want. Fly Bill Irons on the corporate jet to a Yankees game and you'll get his vote. Buy a million plastic bags from Martineau and you've got his vote.

The largest corporations can afford to stay in RI because they have the ability to cut special deals for themselves. In this way, they are similar to the unions. It's more about personal economics then political beliefs. Does it really surprise anyone that Montanaro is both the head of a major union (worker side) and the chairman of Blue Cross (management side)?

In many cases, the very business leaders whose support is necessary to create a more competitive RI economy simply sit back because they have been able to cut special deals for themselves and the companies they lead. In the meantime, RI is burning to the ground.

Posted by: Anthony at October 11, 2007 1:58 PM

I don't recall the exact quote, but did not Lincoln Steffens write in the early part of the 20th century that "Rhode Island is a state for sale, and cheap."

The more things change, the more they stay the same.

Posted by: Tom W at October 11, 2007 5:08 PM

Excellent points, Anthony.

That Montanaro is straddling labor and management hadn't occurred to me.

Posted by: Monique at October 11, 2007 9:20 PM
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