Steward CEO Allegedly Boasted About Swaying Foreign Officials with Cash

Steward Health Care is facing serious allegations as a whistleblower claims that CEO Ralph de la Torre and other executives engaged in illegal activities to secure a hospital contract in Malta. This information comes to light amid a federal investigation into the company, which declared bankruptcy earlier this year.

The allegations were unveiled in a complaint submitted to Congress by Ram Tumuluri, a health care executive who had dealings with the Maltese government. Tumuluri detailed a 2017 meeting where de la Torre purportedly suggested he could offer bribes to Maltese officials to finalize deals.

In his statement to Congress, Tumuluri reported de la Torre’s boast about Steward’s competitive edge in Malta and alleged that he was prepared to use “brown bags”—often a euphemism for cash bribes—to secure contracts. Tumuluri’s claims have led a Senate committee to begin reviewing the complaint.

A spokesperson for de la Torre dismissed Tumuluri’s allegations as “preposterous” and asserted that Steward’s actions in Malta were conducted lawfully and transparently. The spokesperson emphasized that there is no evidence implicating the CEO or the company in any wrongdoing.

The scrutiny facing Steward is mounting, with a federal grand jury in Boston looking into the compensation and spending practices of the company’s top executives, including de la Torre. The whistleblower complaint coincides with de la Torre’s attempt to defer his appearance before Congress in response to a subpoena that requires him to provide testimony.

Meanwhile, Steward Health Care is grappling with the fallout from its bankruptcy and is struggling to sell over 30 hospitals it operates nationwide. Recent closures of two Steward facilities in Massachusetts have left approximately 1,200 employees without jobs, further complicating the company’s already fraught situation.

Previous investigations have highlighted alarming issues related to Steward’s financial practices, demonstrating how private equity and investor groups have extracted substantial amounts of money from community hospitals. Reports indicated that various Steward hospitals were burdened with unpaid bills, endangering essential medical supplies.

In a striking incident, young patients were hastily transferred from a Steward-operated behavioral health hospital in Phoenix due to a malfunctioning air conditioning system, which caused indoor temperatures to soar to 99 degrees. A subsequent review by Arizona’s Health Department, which ordered the facility to halt operations, revealed chronic understaffing and significant issues with the hospital’s infrastructure.

The investigation by the grand jury raises the prospect of potential criminal charges against the struggling health care company and its executives. While no charges have yet been filed, the allegations of mismanagement and misconduct are serious. De la Torre’s representative has not confirmed whether he is being targeted in the federal probe but noted that any investigation regarding compensation would reveal that Steward executives were compensated at or below industry standards.

Financial disclosures and bankruptcy filings have also elicited questions regarding de la Torre’s financial dealings, including his ownership of two corporate jets valued at $95 million and a 190-foot yacht acquired for around $40 million after his ownership group paid themselves millions in dividends in 2021.

Steward’s financial entanglements extend beyond lavish corporate expenditures. Recent bankruptcy documents noted that Steward paid tens of millions to various companies where de la Torre had significant stakes, including $37 million to a company called CREF, which provided management services to Steward hospitals.

While de la Torre’s spokesperson claims that he has invested more into Steward than he has taken out, recent filings indicate that he was reimbursed over $1 million for vendor expenses that he personally covered. Additionally, he reportedly earned a salary exceeding $4 million during the same period.

The discussion around de la Torre’s defiance of congressional subpoenas has sparked bipartisan criticism, with multiple senators voicing their concerns over what they perceive as an unwillingness to respond to serious allegations. Some lawmakers have suggested that de la Torre could face contempt charges if he fails to appear before the Senate committee.

Steward’s dealings in Malta have attracted interest from U.S. prosecutors, and the whistleblower claims to have first raised concerns about possible violations of the Foreign Corrupt Practices Act back in April 2023. Tumuluri’s company previously secured a contract to manage several Maltese hospitals, but there are now allegations that Steward executives conspired with governmental figures to undermine Tumuluri’s agreement.

The ongoing investigation continues to unfold, with calls for justice growing stronger as new information comes to light. Critics of Steward demand accountability for purported actions that have prioritized personal gain over patient welfare, urging both the Department of Justice and Congress to take decisive action against the company.

As of now, a magistrate in Malta has suggested that corruption charges may be warranted, a recommendation that both implicates Steward and Tumuluri, potentially complicating the already intricate situation.

Source: CBS News