The CEO of Steward Healthcare Inc. told a Senate committee he will ignore a subpoena and not testify at a hearing next week as part of the company's bankruptcy investigation.
In a letter sent Wednesday to the Senate Health Committee, Ralph de la Torre's lawyers said it would be inappropriate for him to testify about matters related to Steward's bankruptcy proceedings while the proceedings are ongoing. The lawyers asked for a delay 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 court judge on Wednesday allowed the company to sell five of its Massachusetts hospitals.
The letter further accuses committee members of trying to “turn the hearings into a pseudo-criminal procedure, using their time not to gather facts but to incriminate Dr. de la Torre in the eyes of public opinion.”
“It is beyond the committee's authority to make any pre-judgments regarding allegations of criminal misconduct because of its investigation of Steward's bankruptcy proceedings,” the letter said.
The committee issued a subpoena in July to compel de la Torre to testify about the collapse of Steward Healthcare Inc. The committee approved the subpoena 16-4 with strong bipartisan support, a first in the committee's history.
Delatore has long faced accusations that he personally profited from the financial collapse of Steward's national hospitals but has so far avoided a public response. He previously declined the opportunity to testify and did not offer a date to testify in opposition or a replacement company executive, lawmakers said.
Last month, on the same day that Steward announced it would close two Massachusetts hospitals after failing to find buyers, de la Torre was competing in the Olympic equestrian events in Paris.
Steward took over a struggling hospital system run by the Archdiocese of Boston in 2010 and turned it into a for-profit institution with the backing of private equity firm Cerberus Capital Management, then went on to buy hospitals across the country.
As hospitals struggled, with bills going unpaid and medical equipment being seized, the owners paid themselves millions in dividends.
According to the committee, Mr. De La Torre owns a 190-foot, $40 million yacht, a $15 million sportfishing boat and a mansion in Dallas. Mr. De La Torre also owned a majority stake in a Steward-affiliated company that owns 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, CEO of Steward Healthcare, who has defrauded patients and health care providers out of hundreds of millions of dollars, is ignoring a subpoena and refusing to testify before the HELP Committee,” Sanders said in a statement.
Sanders and other Democrats on the committee have framed Steward's failure as an example of what happens when private equity firms get involved in health care.
Sanders said he is working with committee members to “determine the best path forward,” “but let me be clear: we will not accept this delay. The committee intends to move forward aggressively to have Dr. de la Torre testify about the serious mismanagement at Steward Healthcare.”
In a separate joint statement, Massachusetts Senators Elizabeth Warren and Edward Markey also condemned de la Torre's refusal to testify.
“He is accountable to the public and to Congress for his egregious greed. Mr. Delatore must be held in contempt if he fails to appear before committee,” the Massachusetts Democrat said.
