A whistleblower has come before Congress alleging that Steward Health Care CEO Ralph de la Torre and other Steward executives illegally conspired with foreign officials to win hospital contracts overseas, CBS News has learned.
“In touting Steward’s alleged competitive advantage in Malta … de la Torre boasted that he could ‘brown bag’ government officials if necessary to stop the practice,” said Ram Tumuluri, a health care executive who worked with the Maltese government. was, the complaint wrote. For Congress, shared with CBS News.
In the submission, which was sent to a US Senate committee investigating the collapse of the hospital company, Tumuluri described a 2017 meeting involving the Steward CEO and alleged that de la Torre had “bribed Maltese government officials”. An employee of the committee confirmed receipt of the complaint and said they were reviewing it.
In a statement, a spokesman for de la Torre called Tumuluri’s allegations “outrageous” and said Steward’s international arm had “acted lawfully and transparently during the period the company was managing Malta.”
“There is no basis to accuse Dr. de la Torre of anything, nor is there any evidence of wrongdoing by him or anyone at Steward International,” the spokesperson wrote.
Tumuluri’s allegations come as an avalanche of scrutiny has fallen on the steward, who declared bankruptcy earlier this year. A federal grand jury in Boston is investigating the company, which is investigating the compensation, expenses and travel of its top executives, including de la Torre, a person familiar with the matter told CBS News. And the whistleblower complaint comes after de la Torre asked to postpone testifying on Capitol Hill. Answer to subpoena He needs to appear on September 12.
Meanwhile, the Dallas-based company is struggling to find buyers for the more than 30 hospitals it owns around the country. last week, Closes two Steward facilities in MassachusettsLeaving about 1,200 workers unemployed, according to the state.
CBS News reports on Steward’s activities in part A year and a half long investigation Documenting how private equity and other investor groups Hundreds of millions of dollars have been siphoned off as well as from community hospitals.
Records reviewed by CBS News show that hospitals across the country sometimes left a trail of unpaid bills. Risk of possible life-saving supply shortages.
Last month, patients as young as five had to be suddenly evacuated from a behavioral health hospital run by Steward in Phoenix after the air conditioning system failed and temperatures inside the facility reached 99 degrees.
A survey by the Arizona Department of Health, which ordered the hospital to cease operations, revealed that the facility was chronically understaffed and had “multiple problems with HVAC systems, elevators and kitchen equipment with no documentation of repairs.”
Grand jury planning suggests the embattled health care company and its executives are likely to face criminal charges, though no charges have been brought.
A spokeswoman for de la Torre declined to comment on whether the CEO is the target of a federal investigation, but said any investigation into compensation “would show that Steward’s executives, including Dr. de la Torre, were paid below market by acceptable industry standards.”
Money Trail
According to the Senate panel, a review of financial disclosures and bankruptcy filings raised questions about whether de la Torre was using company money to fund a lavish lifestyle, including two corporate jets owned by Steward affiliates valued at $95 million.
In 2021, Steward’s owners paid themselves millions in dividends, the same year de la Torre acquired a 190-foot yacht estimated to be worth $40 million.
In the year before he declared bankruptcy, Steward also paid millions of dollars to other companies in which de la Torre held significant stakes. Those payments included $37 million in “management fees” to a company called CREF in which De La Torre owns about 40%, according to a person familiar with the ownership structure.
A spokesman for CREF said the company provided “real estate and facility-related services” to Steward’s hospitals and that de la Torre sold his stake last month.
The spokesperson also confirmed that CREF won a competitive bidding process to oversee the construction of a new science center named after de la Torre’s mother at a private school in Dallas — an arrangement. First reported by the Boston Globe. Steward also donated $3 million directly to the school in 2023, bankruptcy filings show.
In her statement, De La Torre’s spokeswoman said the CEO had “invested more — professionally, personally and financially — than she took out in Steward Health Care,” noting that she used her stake in Steward and other assets to personally guarantee the loan. had done did to the company.
“Dr. De La Torre did everything in his power to help Steward Health Care overcome numerous industry hurdles and challenges, including personally purchasing equipment and supplies needed to address patients’ needs and personally guaranteeing loans for the company with his wealth. ” the spokesperson wrote. .
She pointed to a recent bankruptcy filing, which shows the company reimbursed her for more than $1 million in vendor expenses she personally paid between May 2023 and April 2024.
The same filing shows that during that period, de la Torre was paid more than $4 million in salary.
Ignoring a subpoena?
On Wednesday, de la Torre’s attorney, Alexander Merton, wrote to the Senate committee investigating Steward saying his client “will not participate” in the hearing, requiring the testimony to be postponed until the bankruptcy proceedings are resolved.
“Unfortunately, while Dr. de la Torre continues to fight to steward hospitals and the patients and communities they serve, members of this committee continue to cast aspersions on Dr. de la Torre and appear determined to turn the hearing into a pseudo-criminal one. Next,” Merton wrote.
The letter triggered a bipartisan pushback. Louisiana Sen. Bill Cassidy, the committee’s ranking Republican member, said that “ignoring congressional subpoenas is consistent with ignoring norms,” adding that it was important for de la Torre to address “allegations that assets have been drained” for his financial gain.
In a joint statement, Senators Elizabeth Warren and Edward Markey, both Democrats from Massachusetts, said de la Torre “should be held in contempt if he fails to appear before the committee.”
“Dr. De la Torre’s defiance of the subpoena to appear before the Senate is outrageous,” his statement read. “They owe it to the public and Congress to answer for its monstrous greed.”
“Campaign of Unlawful Coercion”
Steward’s dealings in Malta have drawn the interest of American prosecutors, according to people familiar with the matter. In July, CBS News first reported Federal prosecutors from the US Attorney’s Office in Boston were investigating Steward on various charges, including fraud and violations of the Foreign Corrupt Practices Act.
The whistleblower’s attorney, Andrew Bakaj, told CBS News in a statement that Tumuluri first raised his allegations that Steward violated that law — which prohibits US citizens and entities from engaging in corrupt activities — to the Justice Department in April 2023.
The company from Tumuluri won the contract to run three public hospitals in Malta in 2015. In a complaint to Congress, Tumuluri alleged that it had “conspired” with Maltese officials on an “illegal pressure campaign” to gain control of Tumuluri’s contracts. The company won.
According to the complaint, which spans over 500 pages, the conspiracy allegedly involved an attempt to arrest Tumuluri and repeated death threats in view of it.
A De La Torre spokesman said Steward took over the Maltese hospital contract after Tumuluri’s company “failed to deliver on its promises” and government officials were looking to replace it.
Last year, a judge in Malta voided the agreement entirely. An appeals court upheld the decision, citing “collusion between the steward and senior government officials or its agencies”. According to a report by the Times of Malta.
“As more damaging information comes to light every day, we call on both the Justice Department and Congress to finally hold stewards accountable for personally profiting over the health of the patients they serve,” Bakaj said in a statement.
Maltese magistrates have recommended corruption charges against de la Torre and other steward officials as part of the investigation. His leadership.”
The Attorney General’s office in Malta did not immediately respond for comment
Magistrates also recommended charges against Tumuluri, but Bakaj said he was not aware of any action by the Maltese government and that the inquiry was “far from independent of being launched by political actors.”
“Mr. Tumuluri has, on multiple occasions, offered his assistance and testimony to the Malta authorities to ensure justice for the Maltese people,” Bakaj wrote. “Ignored by Malta, that is why Mr. Tumuluri approached the US authorities.”
Michael Kaplan is an award-winning reporter and producer for the CBS News investigative unit. He specializes in securing scoops and creating long-form television investigations. His work has appeared on “60 Minutes,” CNN and The New York Times.
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