Steward Health CEO Held in Criminal Contempt by Senate Committee

(Bloomberg) -- US senators investigating the collapse of Steward Health Care voted Thursday to pass civil and criminal contempt resolutions against the embattled health system’s chief executive officer after he defied a subpoena to testify about his role in the alleged mismanagement of the firm’s funds.

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The vote comes after Ralph de la Torre, the company’s CEO and majority owner, failed to comply with the Senate Committee on Health, Education, Labor and Pensions’ first subpoena since 1981. His rationale for his absence during the Sept. 12 hearing was to avoid potentially jeopardizing Steward’s precarious bankruptcy, and he sought to postpone his Congressional testimony until after it concluded.

“Time after time, he has arrogantly refused to appear,” said Senator Bernie Sanders, the chair of the committee that issued the subpoena. “Therefore, Dr. de la Torre has given us no choice but to move forward this morning on two resolutions to enforce the subpoena and hold him accountable for his actions.”

The bankruptcy of one of the nation’s largest private health systems has drawn ire from lawmakers on both sides of the aisle amid allegations of insufficient care.

Corporate executives are frequently called to appear before Congress when their business is under heavy scrutiny — but de la Torre’s refusal to testify was a rare move. The Sept. 12 hearing moved forward anyway, with nurses and local elected officials testifying instead, citing harrowing reports of deficient care as Steward’s finances depleted.

A lawyer for de la Torre said last week’s hearing was “seemingly designed as a vehicle to violate Dr. de la Torre’s constitutional rights” in a Sept. 18 letter to Sanders. De la Torre was being targeted “as a criminal scapegoat for the systemic failures in Massachusetts’ health care system,” the letter added.

Both resolutions will now be advanced to the full Senate for consideration. The resolution for civil enforcement of the subpoena instructs Senate Legal Counsel to bring a civil suit in the District Court for the District of Columbia to require de la Torre’s compliance with the subpoena and his testimony before the committee.

The criminal contempt resolution would refer the issue to the US Attorney for the District of Columbia to criminally prosecute de la Torre for failing to honor the subpoena. If the US attorney presses charges, the executive could be sent to prison.

“Today we are making clear to Dr. de la Torre and the other CEOs, private equity investors and corporate executives who treat the health-care system like their own personal piggy bank, that your millions do not shield you from accountability to a legal order issued by the United States Senate,” said Massachusetts Senator Ed Markey during the vote.

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