Sen. Bernie Sanders (I-Vt.), chairman of the Senate Health, Education, Labor and Pensions Committee, delivers closing statements at a hearing examining short-term and long-term challenges for public schools, Thursday, June 20, 2024, on Capitol Hill.
The Senate Health Committee has launched an investigation into the bankruptcy of Steward Healthcare, a Dallas-based hospital chain with a large presence in eastern Massachusetts, and is expected to vote next week on issuing a subpoena to the company’s CEO, Ralph de la Torre.
Steward operates 31 hospitals in eight states, including eight in Massachusetts. The company filed for Chapter 11 bankruptcy protection in May and is considering selling all of its hospitals, but bankruptcy documents show it has paid millions of dollars to executives, including De Torre.
Committee Chairman Bernie Sanders (Independent, R-Vermont) and Ranking Committee Member Bill Cassidy (R-Louisiana) announced Thursday that the committee will vote on July 25 to subpoena de la Torre to compel him to testify at a hearing on September 12.
“Given that Steward’s bankruptcy and financial arrangements have caused serious harm and uncertainty to hospitals, patients and health care workers across the country, Dr. de la Torre had no choice but to compel him to testify at this hearing,” Sanders and Cassidy said in a joint statement.
Steward took over a struggling hospital system run by the Archdiocese of Boston in 2010 and converted it into a for-profit facility with the backing of private equity firm Cerberus Capital Management, then went on to buy hospitals across the country.
Cerberus siphoned off the hospital’s funds, then sold all of its land to a real estate investment firm for more than $1 billion, agreeing to lease it back for millions of dollars per year in rent. Steward allegedly used the money from this deal to further expand the hospital rather than investing in the existing hospital.
Even before the bankruptcy, Steward was being sued by at least two dozen vendors who allegedly weren’t paying for goods and services.
At the same time, de la Torre was amassing a personal fortune, reportedly living in a Dallas villa with George W. Bush and Mark Cuban and owning a $40 million yacht and a luxury fishing boat. He was paid an estimated $16 million a year in compensation, and Cerberus made $800 million in profits, according to the committee.
In separate statements, Sanders and Sen. Edward Markey (D-Mass.) blasted Steward and de la Torre as classic examples of corporate greed.
“There’s no clearer example of this than the enormous fortunes that Wall Street private equity vultures have made by buying up hospitals, stripping them of their assets and lining their own pockets,” the senators said.
“Enough is enough. It’s time for Dr. de la Torre to get off his yacht and explain to Congress how he profited financially while bankrupting his hospital,” Sanders and Markey said.
Some of Steward’s hospitals have been forced to close. Others have been unable to pay providers or purchase supplies. Now communities across the country are facing the possibility of losing their local hospitals.
