A whistleblower has come forward to Congress alleging that Steward Health Care CEO Ralph de la Torre and other Steward executives illegally conspired with foreign officials to secure an overseas hospital contract, CBS News has learned.
“In touting Steward’s alleged competitive advantage in Malta … de la Torre boasted that he could issue ‘brown bags’ to government officials if necessary to close deals,” Ram Tumuluri, a health care executive who has worked with the Maltese government, wrote in a complaint to Congress, shared with CBS News.
In his complaint, sent to a U.S. Senate committee investigating the hospital company’s bankruptcy, Tumuluri describes a 2017 meeting attended by Steward’s CEO and alleges that de la Torre “insinuated that he would pay bribes to officials of the government of Malta.” A committee member confirmed receipt of the complaint and said they were reviewing it.
In a statement, a spokesperson for de la Torre called Tumuluri’s allegations “absurd” and said Steward’s international arm had acted “lawfully and transparently throughout the period the company operated in Malta.”
“There is no basis to accuse Dr. de la Torre of anything, and there is no evidence that he or anyone at Steward International engaged in any wrongdoing,” the spokesperson wrote.
Michael Nagle/Bloomberg via Getty Images
Tumuluri’s allegations come as a flood of scrutiny has descended on Steward, which declared bankruptcy earlier this year. A federal grand jury in Boston investigating the company is examining the compensation, expenses and travel of its top executives, including de la Torre, a person familiar with the matter told CBS News. And the whistleblower complaint comes as de la Torre has asked to postpone his testimony on Capitol Hill. response to a subpoena asking him to appear on September 12.
Meanwhile, the Dallas-based company is struggling to find buyers for more than 30 hospitals it owns across the country. Last week, Two Steward Facilities in Massachusetts Closeleaving about 1,200 workers out of work, according to the state.
CBS News reported on Steward’s activities as part of a A year and a half investigation document how private equity and other investor groups have siphoned off hundreds of millions of dollars community hospitals with .
Records reviewed by CBS News showed that Steward hospitals across the country left a trail of unpaid bills, sometimes risking a shortage of potentially vital supplies.
Last month, patients as young as five had to be abruptly transferred out of a behavioral health hospital run by Steward in Phoenix after its air conditioning system failed and temperatures inside the facility reached 99 degrees.
An investigation by the Arizona Department of Health, which ordered the hospital to shut down, found that the facility was consistently understaffed and discovered “multiple problems with HVAC systems, elevators and kitchen equipment with no documentation of repairs made.”
The grand jury convening suggests the troubled health care company and its executives could face criminal charges, although no charges have been filed.
De la Torre’s spokesman declined to say whether the CEO was a target of the federal investigation, but said any compensation investigation “would show that Steward’s executives, including Dr. de la Torre, were paid below market and industry standards.”
The money trail
A review of financial disclosures and bankruptcy filings raises questions about whether de la Torre used company money to fund a lavish lifestyle, which included two corporate jets owned by a Steward subsidiary worth $95 million, according to the Senate panel.
In 2021, Steward’s owners paid themselves millions of dollars in dividends, the same year de la Torre acquired a 190-foot yacht valued at $40 million.
In the year before his bankruptcy, Steward also paid tens of millions of dollars to other companies in which de la Torre held significant stakes. Those payments included $37 million in “management fees” to a company called CREF in which de la Torre held about a 40% stake, according to a person familiar with the ownership structure.
A CREF spokesman said the company provided a range of “real estate and facilities-related services” to Steward hospitals and that de la Torre sold his stake last month.
The spokesperson also confirmed that CREF had won a bid to oversee 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. Bankruptcy filings show that Steward also donated $3 million directly to the school in 2023.
In her statement, de La Torre’s spokeswoman said the CEO had “invested more — professionally, personally and financially — in Steward Health Care than he took out,” noting that he had used his stake in Steward and other assets to personally guarantee loans to the company.
“Dr. de la Torre has done everything in his power to help Steward Health Care overcome many industry obstacles and challenges, including personally purchasing equipment and supplies needed to meet patient needs and personally guaranteeing loans for the business with his assets,” the spokesperson wrote.
She referred to a recent bankruptcy filing, which showed the company reimbursed him for more than $1 million in vendor expenses he personally paid between May 2023 and April 2024.
The same file shows that during this period, de la Torre received a salary of more than 4 million dollars.
Are you defying a subpoena?
On Wednesday, de la Torre’s attorney, Alexander Merton, wrote to the Senate committee investigating Steward, saying his client “would not participate” in the hearing, saying testimony should be postponed until the bankruptcy proceedings are resolved.
“Unfortunately, as Dr. de la Torre continues to fight for Steward Hospitals and the patients and communities they serve, the members of this committee continue to discredit Dr. de la Torre and appear determined to turn the hearing into a pseudo-criminal proceeding,” Merton wrote.
The letter sparked a backlash from both sides. Senator Bill Cassidy of Louisiana, the ranking Republican member of the committee, said that “defying a congressional subpoena is consistent with a disregard for norms,” adding that it was important for de la Torre to address “allegations that assets were drained” for his financial benefit.
In a joint statement, Senators Elizabeth Warren and Edward Markey, both Democrats of Massachusetts, said de la Torre “must be held in contempt of court if he fails to appear before the committee.”
“Dr. de la Torre’s refusal to comply with a Senate subpoena is outrageous,” their statement read. “He must be held accountable to the public and Congress for his appalling greed.”
An “illegal campaign of coercion”
Steward’s dealings in Malta have attracted the interest of U.S. prosecutors, according to people familiar with the matter. In July, CBS News was the first to report Federal prosecutors from the U.S. Attorney’s Office in Boston were investigating Steward on various allegations, including fraud and violations of the Foreign Corrupt Practices Act.
A lawyer for the whistleblower, Andrew Bakaj, told CBS News in a statement that Tumuluri first reported his allegations that Steward violated the law — which prohibits U.S. citizens and entities from engaging in corrupt activity — to the Justice Department in April 2023.
Tumuluri’s company won a contract to manage three of Malta’s public hospitals in 2015. In its complaint to Congress, Tumuluri alleges that de la Torre and other executives “conspired with” Maltese officials in a “campaign of unlawful coercion” to gain control of the contract that Tumuluri’s company won.
According to the complaint, which runs to more than 500 pages, the plot allegedly involved an attempt to arrest Tumuluri and included repeated death threats against him.
De la Torre’s spokesman said Steward took over the Maltese hospital contract only after Tumuluri’s company “failed to deliver” and government officials were looking to replace it.
Last year, a Maltese judge annulled the contract in its entirety. An appeals court upheld the decision, citing “collusion between Steward and senior government officials or its agencies,” according to a report in the Times of Malta.
“As more damaging information comes to light every day, we call on the Justice Department and Congress to finally hold Steward accountable for putting his personal gain above the health of the patients he treats,” Bakaj said in a statement.
A Maltese magistrate has recommended corruption charges against de la Torre and other Steward executives in an investigation that de la Torre’s spokesman said “was not based on an objective or reliable investigation, and there is no evidence of wrongdoing or illegal conduct by Steward International or its executives.”
The office of the Attorney General of Malta did not immediately respond for comment.
The magistrate also recommended prosecution of Tumuluri, but Bakaj said he was unaware of any action by the Maltese government and described the investigation as “far from independent, having been initiated by political actors”.
“Mr Tumuluri has repeatedly offered his assistance and testimony to the Maltese authorities to ensure justice for the Maltese people,” Bakaj wrote. “Ignored by Malta, Mr Tumuluri contacted the US authorities for this reason.”
