Steward CEO refuses to testify before Senate committee

Photo: Michael Duva/Getty Images

Steward Health Care CEO Dr. Ralph de la Torre is refusing to appear before a Senate committee next week, despite being issued a subpoena to answer questions about the health system's bankruptcy.

The Senate Committee on Health, Education, Labor and Pensions (HELP) issued a subpoena in July for de la Torre to appear on September 12. 

On Wednesday, de la Torre's attorney Alexander Merton, a partner at Quinn Emanuel, sent a letter to the committee saying it would be inappropriate for his client to appear while bankruptcy proceedings were ongoing. He suggested the hearing be rescheduled.

HELP Committee Chairman Bernie Sanders (I-Vt.) replied in a statement that the committee would not accept the postponement and was determining the best path forward.

"This Committee intends to move forward aggressively to compel Dr. de la Torre to testify to the gross mismanagement of Steward Health Care," Sanders said. "It is time for Dr. de la Torre to get off of his $40 million yacht and explain to the American people how much he has gained financially while bankrupting the hospitals he manages."

Merton said in the letter: "It is not within this Committee's purview to make predeterminations of alleged criminal misconduct under the auspices of an examination into Steward's bankruptcy proceedings, and the fact that its members have already done so smacks of a veiled attempt to sidestep Dr. de la Torre's constitutional rights by seeking sworn testimony on matters for which the committee has predetermined his guilt."

He added, "Unfortunately, while Dr. de la Torre has continued to fight for Steward hospitals and the patients and communities they serve, members of this Committee continue to cast aspersions on Dr. de la Torre and appear determined to turn the hearing into a pseudo-criminal proceeding in which they use the time, not to gather facts, but to convict Dr. de la Torre in the eyes of public opinion."

WHY THIS MATTERS

Steward filed for bankruptcy in May and made a plan to sell its 30 hospitals across eight states. 

A federal bankruptcy judge on Wednesday cleared the way for the company to sell five hospitals in Massachusetts, according to The Hill.

THE LARGER TREND

On August 28, Steward prohibited Dr. de la Torre from speaking on its behalf regarding any "bankruptcy-related issues," because those matters had already been delegated exclusively to an independent subcommittee of Steward's board of managers that was established on December 19, 2023, according to Merton.

Dr. de la Torre needs to respect the ongoing reorganization and settlement effort announced on August 30 by remaining silent regarding the reasons for Steward's bankruptcy, particularly because a federal court order prohibits him from discussing anything exchanged in a mediation effort that led to the recently announced agreement in principle, Merton said.

Sanders said in a statement: "I am disappointed, but not surprised, that Dr. Ralph de la Torre, the CEO of Steward Health Care, who has made hundreds of millions of dollars ripping off patients and healthcare providers, is refusing to testify in the HELP Committee in defiance of a subpoena. Perhaps more than anyone else in America, Dr. de la Torre is the poster child for the type of outrageous corporate greed that is permeating through our for-profit healthcare system.

"Working with private equity vultures, he became obscenely wealthy by loading up hospitals across the country with billions in debt and selling the land underneath these hospitals to real estate executives who charge unsustainably high rent. As a result, Steward Health Care, and the more than 30 hospitals it owns in eight states, were forced to declare bankruptcy with some $9 billion in debt."

Email the writer: SMorse@himss.org

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