Updated Sept. 30 at 10:45 a.m.
Ralph de la Torre, M.D., is stepping down from his roles as chair and CEO of the bankrupt for-profit health system Steward Health Care and suing federal lawmakers for allegedly violating his Fifth Amendment rights, a representative for the executive confirmed.
De la Torre, whose resignation is effective Oct. 1., has become a focal point for critics of the health system's financial management. Lawmakers, local leaders and labor groups have pointed to the more than $200 million in total compensation he had claimed in the few years before Steward declared bankruptcy in May.
"While Dr. de la Torre has amicably separated from Steward on mutually agreeable terms, he will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population," his representative said in an emailed statement. "Dr. de la Torre urges continued focus on this mission and believes Steward’s financial challenges put a much-needed spotlight on Massachusetts’s ongoing failure to fix its healthcare structure and the inequities in its state system."
The resignation plans were disclosed to press on Saturday, and come just after the Senate gave unanimous consent to hold de la Torre in contempt for skipping out on a Senate Health, Education, Labor and Pensions (HELP) Committee hearing to which he was subpoenaed. De la Torre, through legal representation, said that testifying would hamper the health system's ongoing bankruptcy proceedings and invoked his Fifth Amendment rights on Sept. 4.
On Monday morning the executive pushed back, filing a lawsuit against the HELP Committee seeking a declaratory judgment that he cannot be compelled to comply or punished for asserting his constitutional rights, as well as injunctions prohibiting enforcement of the subpoena or other punishment.
HELP Committee leaders had responded to the Fifth Amendment invocation by informing de la Torre that he was still required to appear before legislators, where he would then invoke his rights in response to specific questions during testimony.
"Not only is the Committee wrong as a matter of law, the Committee's bottom line was explicit: it was weaponizing Congress’s civil and criminal contempt proceedings to punish Dr. de la Torre ... because his invocation deprived the Committee of a televised opportunity to ridicule him in front of the American public for standing on his constitutional rights," de la Torre's legal representation wrote in the complaint.
Following news of the resignation but prior to the filed complaint, HELP Subcommittee on Primary Health and Retirement Security Chair Edward Markey, D-Massachusetts, had reiterated his belief that the executive should face legal repercussions for hospital closures in his home state and elsewhere.
“Ralph de la Torre’s resignation is not enough, and must be held accountable in the court of law," Markey said in a statement. "This resignation comes too late for the workers, patients and communities that Mr. de Torre harmed and abandoned.”
Massachusetts was among the states most affected by Steward's bankruptcy. Two Steward-owned hospitals have been shut down as six others transition to new owners and operators with the anticipated support of hundreds of millions of state funds.
On Friday the Massachusetts Health Policy Commission, a state regulator, said it had concluded its review of the hospital sales approved in bankruptcy court earlier this month, the last barrier for the parties' Sept. 30 close. Its review of the sale of Steward's physician network, to a Rural Healthcare Group subsidiary, is still ongoing.
Sept. 25
Senate votes to hold Steward Health CEO in criminal contempt of Congress
The Senate has given its unanimous consent on a resolution to hold Steward Health CEO Ralph de la Torre, M.D. in contempt of Congress for defying a subpoena and refusing to appear at a Congressional hearing.
The Senate Committee on Health, Education, Labor and Pensions (HELP) Chair Bernie Sanders, I-Vermont, brought the resolution to the Senate floor Wednesday afternoon. His committee had unanimously voted in favor of both civil enforcement and criminal contempt resolutions (see that story below).
"The passage of this resolution by the full Senate will make clear that even though Dr. de la Torre may be worth hundreds of millions of dollars, even though he may be able to buy fancy yachts and private jets and luxurious accommodations throughout the world, even though he may be able to afford some of the most expensive lawyers in America—no, Dr. de la Torre is not above the law," Sanders said on the floor. "If you defy a Congressional subpoena, you will be held accountable no matter who you are or how well connected you may be."
HELP Committee Ranking Member Bill Cassidy, R-Louisiana, also spoke in support of the resolution ahead of the vote, as did Massachusetts Democrat Edward Markey. Both underscored burdens placed on staff and patients leading up to the bankruptcy as de la Torre and others profited.
"Dr. de la Torre is using his blood-soaked gains to hide behind corporate lawyers instead of responding to the United States Senate's demands for actions," Markey said.
De la Torre's criminal citation is the Senate's first since 1971. The executive, through his legal representation, has said that appearing before Congress to testify would inhibit Steward's bankruptcy proceedings.
Sept. 19
Senate HELP Committee votes for civil, criminal charges after Steward CEO dodges subpoena
The Senate Committee on Health, Education, Labor and Pensions voted unanimously this morning to bring civil enforcement and a criminal contempt charge against Steward Health CEO Ralph de la Torre, M.D., in response to the executive’s refusal to appear before Congress.
De la Torre had been subpoenaed in July to testify about the for-profit’s bankruptcy and his compensation during a period of deteriorating care and shuttering hospitals.
“For months—months—this committee has invited Dr. de la Torre to testify about the financial mismanagement and what occurred at Steward Healthcare,” HELP Committee Chair Bernie Sanders, I-Vermont, said Thursday morning ahead of the votes. “Time after time he has arrogantly refused to appear. … Therefore, Dr. de la Torre has given us no choice but to move forward this morning on two resolutions to enforce the subpoena and to hold him accountable for his actions.”
About a week prior to the Sept. 12 hearing to which he was subpoenaed, the executive informed the lawmakers that he would not be attending due to concerns that his testimony could interfere with ongoing bankruptcy proceedings. That argument was overruled by the committee’s leaders shortly after.
On Tuesday, de la Torre’s legal representation penned a letter to Sanders reiterating concerns that last week’s hearing was a vehicle “to ambush Dr. de la Torre in a pseudo-criminal proceeding.” The letter also informed Sanders that de la Torre was invoking his Fifth Amendment right to refrain from testifying.
In a joint statement released Wednesday, Sanders and Ranking Member Bill Cassidy, R-Louisiana, said that the Fifth Amendment “does not permit a witness to refuse to appear when summoned to testify before a congressional committee,” and that it must be invoked in response to specific questions during the testimony.
The lawmakers reiterated that position in opening statements given just ahead of Thursday morning’s votes.
“A witness cannot evade and disregard and evade duly authorized subpoena. It’s unfortunate we got to this point, but if someone shows contempt for the American people by defying a subpoena and refusing to provide answers, that is contemptable,” Cassidy said.
The HELP Committee’s votes on both the civil action and criminal contempt charge were unanimous. Both will now be brought before the full Senate for consideration.
The Sept. 12 hearing to which de la Torre did not appear featured testimonies from two Massachusetts nurses, Louisiana State Representative Michael Echols, a Republican, and Staci Mitchell, the mayor of West Monroe, Louisiana, and a board member of a Steward hospital. They described unpaid vendor bills, difficulty in providing adequate care and surrounding hospitals and communities having to pick up the slack, to the outrage of the senators.
Though he has declined to testify, a recently published website created by a communications firm Longacre Square Partners sought to tell “the real truth” about de la Torre’s compensation and role at the company. Longacre Square has confirmed de la Torre is one of its clients.
According to a “Myths vs. Facts” section of that website, a $250 million payout figure highlighted by the lawmakers is “grossly misleading,” as it conflates share ownership with financial distribution and includes a dividend de la Torre received to partially offset a $200 million loan he guaranteed at the top of the pandemic. His executive compensation, “even including the use of the [company jet], is still well below market as determined by a third-party independent compensation consultant,” the website reads.
Of note, the website also redirects blame to Steward’s private equity backer Cerberus Capital Management, for taking out $1.1 billion before its exit, and the state of Massachusetts, for not doing enough to financially support Steward hospitals in the state that later closed down.