Whistleblower tells Congress Steward Health Care CEO Ralph de la Torre that he bragged he could lie to foreign officials about

A whistleblower has appeared in Congress accusing Steward Health Care CEO Ralph de la Torre and other Steward executives of illegally conspiring with foreign officials to get a hospital contract abroad, CBS News learned.

“Discussing the competitive advantage of Steward Malta … de la Torre boasted that he could ‘brown bags’ government officials if needed to close deals,” Ram Tumuluri, director of health worker with the Maltese government, wrote in the complaint. in Congress, shared with CBS News.

In that information, sent to the committee of the United States Senate investigating the collapse of the hospital company, Tumuluri describes a meeting in 2017 related to the Director General and accusing de la Torre “he was giving bribes to the authorities of the Government of Malta.” A committee official confirmed that he had received the complaint and said that they were investigating it.

In a statement, de la Torre’s spokesman called Tumuluri’s allegations “absurd” and said Steward’s international arm operated “in a legal and transparent manner throughout the company’s operations in Malta.”

“There is no basis to accuse Dr. de la Torre of anything, nor is there any evidence that he or anyone at Steward International has done anything wrong,” the spokesperson wrote.

Tumuluri’s charges come as more scrutiny falls on Steward, which declared bankruptcy earlier this year. A federal grand jury in Boston investigating the company is looking into the compensation, spending and travel of its top executives, including de la Torre, a person familiar with the matter told CBS News. And the whistleblower complaint, it appears as de la Torre asked to postpone the testimony on Capitol Hill to. call response wants him to be born on September 12th.

Meanwhile, the Dallas-based company is struggling to find customers for the more than 30 hospitals it owns around the country. Last week, Two Steward facilities in Massachusetts have closedleaving about 1,200 workers without jobs, according to the government.

CBS News has been reporting on Steward’s activities as part of the year and a half research documenting how private equity and other investor groups they won hundreds of millions of dollars from public hospitals with .

Records reviewed by CBS News showed Steward’s hospitals around the country left behind a series of unpaid bills, in some cases. risking a shortage of life-saving equipment.

Last month, patients as young as five had to be evacuated from a Steward-run behavioral health hospital in Phoenix after its ventilation system failed and the temperature inside center up to 99 degrees.

An investigation by the Arizona Department of Health, which ordered the hospital to cease operations, revealed that the facility was chronically understaffed and found “numerous issues with HVAC systems, elevators and equipment.” of kitchens without maintenance documents.”

The convening of the grand jury suggests that there is a possibility that the embattled health company and its executives could be indicted on criminal charges, although no charges have been brought.

A spokesman for De la Torre declined to comment on whether the CEO is a target of the federal investigation, but said any compensation probe would “show that Steward’s executives, including Dr. de la Torre, they are paid below market at acceptable industry standards.”

The way of money

A review of financial statements and bank statements raises questions about whether de la Torre used company money to support a lavish lifestyle, which included two business jets owned by Steward’s worth $95 million, according to the Senate panel.

In 2021, Steward’s owners paid out millions in dividends, the same year de la Torre acquired a 190-foot yacht estimated at $40 million.

In the year before it declared bankruptcy, Steward also paid tens of millions of dollars to other companies in which de la Torre had significant capital. Those payments included $37 million for “management fees” to a company called CREF in which de la Torre has about a 40% stake, according to a person familiar with the ownership structure.

A CREF spokesman said the company provided “a number of real estate services” to Steward Hospitals and de la Torre sold his stake last month.

The spokesman also confirmed that CREF won a competitive bid to oversee the construction of a new science center named after de la Torre’s mother at the Dallas private school her children attended – an arrangement first reported by the Boston Globe. Bank records show Steward also gave $3 million directly to the school by 2023.

In a statement, de La Torre’s spokeswoman said the CEO “has made a significant investment — professionally, personally and financially — in Steward Health Care that he has spun off,” saying he used his stake in Steward and other assets to secure loans. made in the company.

“Dr. de la Torre did everything in his power to help Steward Health Care overcome many of the challenges and challenges of the industry, including purchasing the equipment and supplies necessary to address the needs of patients and guaranteeing the company’s loans with his assets,” the spokesperson wrote.

He pointed to a recent bank statement, which showed the company reimbursed him more than $1 million in vendor expenses he paid between May 2023 and April 2024.

The same filing showed at the time, de la Torre was paid a salary of more than $4 million.

Resist the call?

On Wednesday, de la Torre’s lawyer, Alexander Merton, wrote to the Senate committee investigating Steward that his client “will not participate” in the trial, insisting that testimony needs to be postponed until after the bank’s cases are settled.

“Unfortunately, while Dr. de la Torre continues to fight for Steward Hospitals and the patients and communities they serve, members of this Committee continue to criticize Dr. de la Torre and appear to intends to turn the case into a criminal proceeding,” Merton wrote.

This letter caused two reactions. Sen. Bill Cassidy of Louisiana, a member of the Republican state committee, said that “condemning the congressional subpoena is consistent with a disregard for procedure,” adding that it is important for de la Torre to deal with “allegations that the property was removed” from his financial interests.

In a joint statement, Senators Elizabeth Warren and Edward Markey, both Democrats from Massachusetts, said de la Torre “must be censured if he fails to appear before the committee.”

“Dr. de la Torre’s defiance of the order to appear before the Senate is offensive,” read their statement. “He owes the nation and Congress answers for his appalling greed.”

“Unlawful pressure campaign”

Steward’s dealings in Malta have caught the interest of US prosecutors, according to people familiar with the matter. In July, CBS News first reported it federal prosecutors in the US Attorney’s Office in Boston were investigating Steward on various charges including fraud and violations of the Foreign Corrupt Practices Act.

A spokesman for the whistleblower’s agent, Andrew Bakaj, told CBS News in a statement that Tumuluri first brought his allegations that Steward violated the law — which prohibits US citizens and corporations from engaging in corrupt practices — to the Department of Justice in April 2023.

Tumuluri’s company won the contract to run three public hospitals in Malta in 2015. In his complaint to Congress, Tumuluri says de la Torre and other executives “conspired” with Maltese officials to “a campaign of illegal coercion” to gain control of the Tumuluri contract. the company had won.

According to the complaint, which runs to more than 500 pages, the conspiracy involved attempts to have Tumuluri arrested and included repeated death threats directed at him.

A spokesman for De la Torre said Steward only took on the contract for the Malta hospital after the Tumuluri company “failed to live up to its promises” and government officials wanted it replace it.

Last year, a judge in Malta annulled the contract completely. The appeals court upheld the decision, citing “cooperation between Steward and senior government officials or its agencies,” according to a Times of Malta report.

“As negative information is revealed every day, we call on the Department of Justice and Congress to finally be held accountable for putting personal gain over the patients they serve,” Bakaj said in a statement.

A Maltese magistrate recommended corruption charges against de la Torre and other Steward executives as part of an investigation de la Torre’s spokesman wrote “was not based on objective or credible investigations, and no is evidence of wrongdoing or illegal behavior by the International Steward or its leadership.”

The Office of the Attorney General in Malta did not immediately respond for comment

The magistrate also recommended charges against Tumuluri, but Bakaj said he had no knowledge of the Maltese government’s actions and called the investigation “far from independent, as it was initiated by political actors.”

“Mr. Tumuluri, on many occasions, has provided assistance and testimony to the Maltese authorities to ensure that justice is done to the people of Malta,” Bakaj wrote. “Ignored by Malta, that’s why Mr. Tumuluri went to the US authorities.”