R.I. Ethics Panel Nixes Settlement with Former Senate President Irons

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The Rhode Island Ethics Commission has rejected an offer by former Senate President William Irons to settle conflict-of-interest charges related to his business dealings with CVS Corp.

After a closed-door meeting, Commission Chairman James Lynch Sr. refused to say why the commission decided to turn it down. He said the case would now be scheduled for a trial-like hearing, though a settlement is still possible.

Irons, an insurance agent as well as a former legislative leader, declined to discuss what happened in the meeting, but said he was proud of his 20 years of public service and looked forward to a hearing. Both sides declined to discuss details of the proposed settlement.

“There are matters that we have to address with the commission — we’ll do that on the record,” said John Tarantino, a lawyer for Irons.

Irons resigned as Senate president in 2004 after questions arose about his votes against legislation opposed by CVS at the same time he was an insurance broker on a CVS employee health insurance policy provided by Blue Cross & Blue Shield.

Irons owns Irons & Associates Insurance Agency in Warwick, and has been active in local agent associations.

The government watchdog group Operation Clean Government filed a complaint with the state Ethics Commission in January 2004, accusing Irons of having a conflict of interest and alleging that he received “significant” broker commissions from Blue Cross & Blue Shield for the health insurance policy.

Irons, an East Providence Democrat, was chair of the powerful Senate Corporations Committee in 1999 and 2000 when it considered legislation called Pharmacy Freedom of Choice.

The legislation would have barred health insurers from limiting where customers could fill their prescriptions. Blue Cross operated a restricted network for subscribers that included CVS and select other pharmacies. Both CVS and Blue Cross strongly opposed the legislation.

Irons said he relied on a 1999 advisory opinion from the Ethics Commission that permitted him to vote on the legislation, which never got out of committee when he was chairman.

Katherine D’Arezzo, an ethics commission prosecutor who negotiated the proposed settlement with Irons’ lawyer, said it was premature to say how the case would resolve.

“We could be back here with a settlement agreement in short order or it could take some time” or it could proceed to a hearing, D’Arezzo said.

She said Irons could face a fine of up to $50,000.

Lynch said he personally found the proposed settlement acceptable, though other commission members objected to it. He said it was unusual for the commission to reject a settlement.

Robert Arruda, the former OCG president who filed the complaint in 2004, said he was pleased the commission had rejected a settlement.

“I wanted to see this done in an open forum, not behind closed doors,” Arurda said. “I was somewhat concerned about the idea of a plea agreement, and that plea agreement was turned down by the commission.”