Senate Committee Expected To Hold Steward CEO In Contempt

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Dive Brief:

• There is bipartisan support to hold Steward Health Care CEO Ralph de la Torre in contempt of Congress after the executive failed to attend a Thursday congressional hearing, despite receiving a subpoena to appear in July.
• The hearing, which continued in spite of the executive’s absence, centered around how de la Torre allegedly contributed to his company’s bankruptcy through financial mismanagement. Nurses and public officials testified that Steward hospitals routinely offered low-quality care due to a lack of supplies and staff, while de la Torre took home millions of dollars in profit.
• Senators will vote on Sept. 19 on whether to pursue civil enforcement or submit a certification to the United States Attorney for criminal contempt.

Dive Insight:

De la Torre’s subpoena from the Health, Education, Labor and Pensions Committee was a rare event — the first legal summons from the committee in over twenty years. 

Sen. Bill Cassidy, R-La., called the subpoena a “last resort” after the elusive executive declined invitations to testify at similar field hearings. 

Steward captured lawmakers’ attention earlier this year after the health system abruptly closed several facilities across its eight-state portfolio and received warnings from state lawmakers about escalating signs of financial distress, including bills to vendors routinely going unpaid and patient care being disrupted due to short staffing.

The CEO in particular drew scrutiny for his abundant wealth amid the company’s financial failure. In the years proceeding Steward’s Chapter 11 bankruptcy filing, De la Torre purchased luxury items including yachts and multiple private jets and took in $250 million in compensation, according to July testimony from Sen. Bernie Sanders, I-Vt.

Until Sept. 4, it seemed that the executive would come forward to testify about his financial practices as scheduled. However, de la Torre told Congress through his lawyers last week that he would not appear, saying it was inappropriate to do so before Steward’s Chapter 11 bankruptcy proceedings concluded.

The senators will reconvene next week to vote on next steps.

The first resolution would bring a civil case against the executive and require him to appear before the committee. The second would refer the matter to the U.S. Attorney for the District of Columbia for criminal prosecution.

If approved by the committee, the resolutions would proceed to the Senate for a floor vote.

“Witnesses cannot disregard and evade a duly authorized subpoena,” Cassidy said during the Thursday hearing.  

During the hearing, nurses and public officials testified about a litany of problems at Steward facilities. Nurses said that they often didn’t have supplies to do their jobs — including basics like diapers and formula. 

Ellen MacInnis, a former nurse at St. Elizabeth’s Medical Center in Boston, told the committee she saw patients suffer — and die — from medically preventable harms caused by understaffing in Steward’s emergency departments.

Steward is also being investigated by the Department of Justice for allegations of fraud and corruption for its overseas conduct in Malta.

A spokesperson for Steward declined to comment on the executive’s decision not to attend the hearing.