Steward Health CEO refuses to testify despite Senate panel subpoena

The CEO of Steward Health Care told a Senate panel he won’t testify at a hearing next week as part of an investigation into the company’s bankruptcy, in defiance of a subpoena.

In a letter to the Senate Health Committee sent Wednesday, attorneys for Ralph de la Torre said it would be inappropriate for him to testify on matters related to Steward’s bankruptcy while those proceedings are ongoing. They asked for a postponement until the proceedings are resolved.

Steward filed for bankruptcy in May and has been trying to sell all 30 of its hospitals across eight states. A federal bankruptcy judge on Wednesday cleared the way for the company to sell five hospitals in Massachusetts.

The letter further accused members of the committee of trying 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.”

“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,” the letter stated.

The committee in July issued a subpoena to compel de la Torre to testify about the failure of Steward Health Care. The committee voted on a strong bipartisan basis 16-4 to authorize the subpoena, the first in its history.

De la Torre for years has faced accusations that he has personally profited while Steward’s hospitals across the country have been failing financially, but he has so far avoided any public response. He declined an earlier opportunity to testify, lawmakers said, and offered no counter date or alternate company official.

Last month, on the same day Steward announced it would close two Massachusetts hospitals that it could not find buyers for, de la Torre was attending Olympic equestrian events in Paris.

Steward took over a failing hospital system run by the Archdiocese of Boston in 2010, and backed by private equity company Cerberus Capital Management, converted it into for-profit institutions before buying up hospitals across the country.

While the hospitals were struggling, to the point where bills weren’t being paid and medical instruments were being repossessed, the owners paid themselves millions in dividends.

According to the committee, de la Torre owns a 190-foot, $40 million yacht; a $15 million sportfishing boat, as well as a mansion in Dallas. De la Torre also had a majority stake in a Steward affiliate that owned two corporate jets that committee chairman Sen. Bernie Sanders (I-Vt.) valued at $95 million.

“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 health care providers, is refusing to testify in the HELP Committee in defiance of a subpoena,” Sanders said in a statement.

Sanders and committee Democrats have characterized Steward’s failure as an example of what happens when private equity firms get involved in health care.

Sanders said he is working with members of the committee “to determine the best path forward. But let me be clear: We will not accept this postponement. This committee intends to move forward aggressively to compel Dr. de la Torre to testify to the gross mismanagement of Steward Health Care.”

In a separate joint statement, Massachusetts Sens. Elizabeth Warren (D) and Edward Markey (D) also condemned de la Torre’s refusal to testify.

“He owes the public and Congress answers for his appalling greed — and De la Torre must be held in contempt if he fails to appear before the Committee,” the Massachusetts Democrats said.

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