A Senate panel investigating the bankruptcy of hospital chain Steward Health Care voted on Thursday to hold the company's CEO in contempt of Congress for defying a subpoena and refusing to appear at a hearing.
The Health Education Labor and Pensions (HELP) Committee overwhelmingly adopted two contempt resolutions: one for civil enforcement and another that would refer the matter to the U.S. Attorney for the District of Columbia to criminally prosecute Ralph de la Torre for failing to comply with the subpoena.
Both resolutions passed 20-0 and will now advance to the full Senate for a vote. Contempt of Congress is a misdemeanor, and could be penalized with fines or imprisonment.
Sens. Bernie Sanders (I-Vt.) and Bill Cassidy (R-La.) — the chair and ranking member, respectively, of the Senate HELP Committee — said de la Torre needs to answer questions about how Steward managed its hospitals, as well as how he was able to reap millions of dollars even as the system was failing.
“Even though Dr. de la Torre may be worth hundreds of millions of dollars, even though he may be able to own fancy yachts and private jets and luxurious accommodations throughout the world, even though he may be able to afford some of the most expensive lawyers in America, no, Dr. de la Torre is not above the law,” Sanders said during the hearing.
The HELP committee in July issued a subpoena to compel de la Torre to testify, the first issued by the panel in decades.
De la Torre told the committee he wouldn’t participate in the hearing while Steward was still in the middle of bankruptcy proceedings and asked for the hearing to be postponed.
But the committee rejected his request and told de la Torre to appear. When he did not, they initiated contempt proceedings.
On Wednesday, de la Torre’s attorney informed the committee he would be invoking his Fifth Amendment rights against self-incrimination because the hearing “was seemingly designed as a vehicle to violate Dr. de la Torre’s constitutional rights.”
The committee rejected that move as well.
Witnesses must show up to the hearing in response to the subpoena and assert their Fifth Amendment rights in response to specific questions, Sanders and Cassidy said. The Fifth Amendment can’t be invoked after the fact.
“A witness cannot disregard and evade a duly authorized subpoena. It's unfortunate we've got to this point, but if someone shows contempt for the American people by defying a subpoena and refusing to provide answers, that is contemptible,” Cassidy said Thursday.
Steward filed for bankruptcy in May and has been trying to sell all 30 of its hospitals across eight states. A federal bankruptcy court last week approved the sale of six Steward Massachusetts hospitals. But two others were closed when no adequate bids were received.
Steward took over a failing hospital system run by the Archdiocese of Boston in 2010, backed by private equity company Cerberus Capital Management. Cerberus sold the real estate that the hospitals were built on to fund debt-fueled purchases of hospitals across the country.
The company agreed to lease the land back for millions of dollars in rent each year. Steward used the money from the deal to finance more expansion, allegedly without investing in its existing hospitals.
While the hospitals were struggling, to the point where bills weren’t being paid and medical instruments were being repossessed, the owners paid themselves millions in dividends.
Steward shut down pediatric wards in Massachusetts and Louisiana, closed neonatal units in Florida and Texas, and eliminated maternity services at a hospital in Florida.
During last week’s hearing, senators heard from nurses at two Steward hospitals in Massachusetts who talked about the impact of corporate ownership on patients, including dangerous levels of understaffing. At one point, there were 11 nurses on the floor for 95 patients in the emergency room.
In another instance, one of the nurses said Steward failed to pay a vendor who supplied bereavement boxes for the remains of newborn babies who had died. Instead, the nurses were forced to use cardboard shipping boxes.
At the same time the hospitals were struggling, de la Torre bought a $40 million yacht and a $15 million luxury fishing boat, Sanders said.
“If you defy a congressional subpoena, you will be held accountable, no matter who you are or how well connected you may be,” Sanders said Thursday.
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