Senate Votes Unanimously To Hold Steward Health Care CEO In Criminal Contempt

Dive Brief:

• The Senate voted unanimously on Wednesday to hold Ralph de la Torre, CEO of Steward Health Care, in criminal contempt for snubbing a congressional subpoena and failing to appear at a September committee hearing. 
• Lawmakers issued the subpoena in July after the executive no-showed multiple invitations to voluntarily testify before committee field hearings. De la Torre initially seemed willing to testify, however, he sent word through his attorneys that he would not attend the hearing as scheduled earlier this month.
• The matter will now be referred to the U.S. Attorney for the District of Columbia. Contempt of Congress is a misdemeanor and carries penalties ranging from fines to imprisonment. 

Dive Insight:

The Senate vote marks the first time in over 50 years that the chamber has referred a contempt charge for criminal prosecution, according to Sen. Edward Markey, D-Mass.

Lawmakers are seeking answers for de la Torre’s role in “the financial chicanery surrounding Steward Health Care,” said Sen. Bernie Sanders, I-Vt., on the Senate floor Wednesday. However, they have been stymied by de la Torre’s defiance.

De la Torre was set to attend a hearing on Sept. 12. However, in the week prior he sent word that he would not appear as scheduled, saying it was inappropriate to do so before the conclusion of federal bankruptcy proceedings.

The Health, Education, Labor and Pensions Committee found that logic unconvincing and voted unanimously to hold de la Torre in contempt of Congress on Sept. 19.

Sanders urged the Senate to do the same prior to their vote Wednesday, saying the charge would send the message that the healthcare executive is not above the law.

“If you defy the congressional subpoena, you will be held accountable no matter who you are or how well connected you may be,” Sanders said.

For months preceding the subpoena, members of the HELP committee held field hearings related to Steward’s impending financial collapse and urged de la Torre to attend, so they might hear his perspective first hand.

The executive declined each offer. Meanwhile, his company — a 31-hospital health system spanning eight states — declined further.

In May, Steward filed for Chapter 11 bankruptcy protections, kicking off a hospital fire sale in which Steward raced to find buyers before cash ran out.

As of September, Steward has closed two hospitals in Massachusetts. In Pennsylvania, the future of Sharon Hospital remains uncertain. 

Sen. Bill Cassidy, R-La., called the July subpoena a “last resort” to get answers from the elusive executive about how his company was driven into financial straits while de la Torre himself walked away with $250 million in compensation over the last four years.

The executive has drawn scrutiny for amassing a collection of luxury items — including private jets, a yacht and properties around the world — as well as engaging in questionable business practices overseas.

De la Torre is accused of spending millions to spy on political adversaries, according to reports from the Boston Globe. 

He is also being personally accused of conspiring to obtain foreign contracts in Malta.

A separate Department of Justice investigation is currently looking into Steward’s Malta contracts.

De la Torre’s spokesperson decried the contempt charges as an attempt to compel testimony in a “pseudo-criminal proceeding,” in a statement to Healthcare Dive on Thursday.

The representative maintained that de la Torre be able to invoke his Fifth Amendment right to avoid self-incrimination.

“The way the vote was presented today makes no mention that Dr. de la Torre asserted his constitutionally protected right to invoke the 5th Amendment,” she said.

Editor’s note: This story has been updated to include comments provided by Ralph de la Torre’s spokesperson.