Earlier this year, a Maltese magistrate concluded a four-year investigation into the matter and recommended that Ernst and de la Torre be charged with money laundering, criminal association, and corruption of public officials, including the nation’s former prime minister, Joseph Muscat, the Globe reports.
Meanwhile, new allegations of domestic dealings continue to come to light. In a separate investigative story Monday, the Globe reported that Steward executives used Steward-owned malpractice insurer TRACO “like a piggy bank.” The Panama-based TRACO was supposed to work like an independent insurer for the hospital chain; Steward would pay TRACO malpractice insurance premiums on behalf of its doctors and the pooled money would be used to litigate and pay out claims. But, instead of paying premiums, Steward gave TRACO IOUs. By the end of 2023, TRACO’s accounting records showed $99 million in outstanding loans, most owed by Steward, and $176 million in “accounts receivable,” also mostly owed by Steward.
With Steward now in bankruptcy, insurance coverage for health care providers is now in question, as are payouts to patients who were harmed by Steward’s care. The Globe noted the case of Yasmany Sosa, whose 35-year-old wife, Yanisey Rodriguez, died a preventable death after giving birth at Steward North Shore Medical Center in Florida in September 2022. Steward agreed to a $4 million settlement with Sosa in March, but the money hasn’t appeared, leaving Sosa in limbo and struggling.
“They killed my wife, that’s for starters. Second of all, they destroyed my family,” Sosa told the Globe through a translator. “This has all become a bunch of loopholes, legal strategies. This really is very difficult for me… I’ve already lost everything.”
Enlarge/ The empty chair of Steward Health Care System Chief Executive Officer, Dr. Ralph de la Torre who did not show up during the US Senate Committee on Health, Education, Labor, & Pensions Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care.
In a federal lawsuit filed Monday, Steward CEO Ralph de la Torre claimed the senators “bulldozed over [his] constitutional rights” as they tried to “pillory and crucify him as a loathsome criminal” in a “televised circus.”
The Senate committee—the Committee on Health, Education, Labor, and Pensions (HELP), led by Bernie Sanders (I-Vt.)—issued a rare subpoena to de la Torre in July, compelling him to testify before the lawmakers. They sought to question the CEO on the deterioration of his hospital system, which previously included more than 30 hospitals across eight states. Steward filed for bankruptcy in May.
Imperiled patients
The committee alleges that de la Torre and Steward executives reaped millions in personal profits by hollowing out the health care facilities, even selling the land out from under them. The mismanagement left them so financially burdened that one doctor in a Steward-owned hospital in Louisiana said they were forced to perform “third-world medicine.” A lawmaker in that state who investigated the conditions at the hospital described Steward executives as “health care terrorists.”
Further, the financial strain on the hospitals is alleged to have led to the preventable deaths of 15 patients and put more than 2,000 other patients in “immediate peril.” As hospitals cut services, closed wards, or shuttered entirely, hundreds of health care workers were laid off, and communities were left without access to care. Nurses who remained in faltering facilities testified of harrowing conditions, including running out of basic supplies like beds. In one Massachusetts hospital, nurses were forced to place the remains of newborns in cardboard shipping boxes because Steward failed to pay a vendor for bereavement boxes.
Meanwhile, records indicate de la Torre and his companies were paid at least $250 million in recent years and he bought a 190-foot yacht for $40 million. Steward also owned two private jets collectively worth $95 million.
While de la Torre initially agreed to testify before the committee at the September 12 hearing, the wealthy CEO backed out the week beforehand. He claimed that a federal court order linked to the bankruptcy case prevented him from speaking on the matter; additionally, he invoked his Fifth Amendment right to avoid self-incrimination.
The HELP committee rejected de la Torre’s arguments, saying there were still relevant topics he could safely discuss without violating the order and that his Fifth Amendment rights did not permit him to refuse to appear before Congress when summoned by a subpoena. Still, the CEO was a no-show, and the Senate moved forward with the contempt charges.
“Not the way this works”
In the lawsuit filed today, de la Torre argues that the senators are attempting to punish him for invoking his Constitutional rights and that the hearing “was simply a device for the Committee to attack [him] and try to publicly humiliate and condemn him.”
The suit describes de la Torre as having a “distinguished career, bedecked by numerous accomplishments,” while accusing the senators of painting him as “a villain and scapegoat[ing] him for the company’s problems, even those caused by systemic deficiencies in Massachusetts’ health care system.” If he had appeared at the Congressional hearing, he would not have been able to defend himself from the personal attacks without being forced to abandon his Constitutional rights, the suit argues.
“Indeed, the Committee made it abundantly clear that they would put Dr. de la Torre’s invocation [of the Fifth Amendment] itself at the heart of their televised circus and paint him as guilty for the sin of remaining silent in the face of these assaults on his character and integrity,” the suit reads.
De la Torre seeks to have the federal court quash the Senate committee’s subpoena, enjoin both contempt charges, and declare that the Senate committee violated his Fifth Amendment rights.
Outside lawyers are skeptical that will occur. The lawsuit is a “Hail Mary play,” according to Stan M. Brand, an attorney who represented former Trump White House official Peter Navarro in a contempt of Congress case. De la Torre’s case “has very little chance of succeeding—I would say no chance of succeeding,” Brand told the Boston Globe.
“Every time that someone has tried to sue the House or Senate directly to challenge a congressional subpoena, the courts have said, ‘That that’s not the way this works,’” Brand said.
Enlarge/ Ralph de la Torre, founder and chief executive officer of Steward Health Care System LLC, speaks during a summit in New York on Tuesday, Oct. 25, 2016.
A Senate committee on Thursday voted overwhelmingly to hold the wealthy CEO of a failed hospital chain in civil and criminal contempt for rejecting a rare subpoena from the lawmakers.
In July, the Senate Committee on Health, Education, Labor, and Pensions (HELP) subpoenaed Steward Health Care CEO Ralph de la Torre to testify before the lawmakers on the deterioration and eventual bankruptcy of the system, which included more than 30 hospitals across eight states. The resulting dire conditions in the hospitals, described as providing “third-world medicine,” allegedly led to the deaths of at least 15 patients and imperiled more than 2,000 others.
The committee, chaired by Senator Bernie Sanders (I-Vt.), highlighted that amid the system’s collapse, de la Torre was paid at least $250 million, bought a $40 million yacht, and owned a $15 million luxury fishing boat. Meanwhile, Steward executives jetted around on two private jets collectively worth $95 million.
De la Torre initially agreed to appear at the September 12 hearing but backed out the week beforehand. He claimed, through his lawyers, that a federal order stemming from Steward’s bankruptcy case prohibited him from discussing the hospital system’s situation amid reorganization and settlement efforts. The HELP committee rejected that explanation, but de la Torre was nevertheless a no-show at the hearing.
In a 20–0 bipartisan vote Thursday, the HELP committee held de la Torre in civil and criminal contempt, with only Sen. Rand Paul (R-Ky.) abstaining. It is the first time in modern history the committee has issued civil and criminal contempt resolutions. The charges will now go before the full Senate for a vote.
If upheld by the full Senate, the civil enforcement will direct the Senate’s legal counsel to bring a federal civil suit against de la Torre in order to force him to comply with the subpoena and testify before the HELP Committee. The criminal contempt charge would refer the case to the US Attorney for the District of Columbia to criminally prosecute de la Torre for failing to comply with the subpoena. If the trial proceeds and de la Torre is convicted, the tarnished CEO could face a fine of up to $100,000 and a prison sentence of up to 12 months.
On Wednesday, the day before the committee voted on the contempt charges, a lawyer for de la Torre blasted the senators and claimed that testifying at the hearing would have violated his Fifth Amendment rights, according to the Boston Globe.
In a statement Thursday, Sanders slammed de la Torre, saying that his wealth and expensive lawyers did not make him above the law. “If you defy a Congressional subpoena, you will be held accountable no matter who you are or how well-connected you may be,” he said.
