Whistleblower tells Congress Steward Health Care CEO Ralph de la Torre bragged he could sway foreign officials with "brown bags" of cash
A whistleblower has come forward to Congress alleging Steward Health Care CEO Ralph de la Torre and other Steward executives illegally conspired with foreign officials to secure a hospital contract abroad, CBS News has learned.
"In touting Steward's supposed competitive advantage in Malta… de la Torre boasted that he could issue 'brown bags' to government officials if necessary to close transactions," Ram Tumuluri, a health care executive who worked with the Maltese government, wrote in a complaint to Congress, shared with CBS News.
In the submission, which was sent to a U.S. Senate committee investigating the hospital company's collapse, Tumuluri describes a 2017 meeting involving the Steward CEO and alleges de la Torre was "insinuating he would bribe officials of the Government of Malta." A committee staffer confirmed receipt of the complaint and said they are reviewing it.
In a statement, a spokesperson for de la Torre called Tumuluri's allegations "preposterous" and said Steward's international arm acted "in a lawful and transparent manner throughout the period in which the company was operating 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 engaged in wrongdoing," the spokesperson wrote.
Tumuluri's allegations come as an avalanche of scrutiny has fallen on Steward, which declared bankruptcy earlier this year. A federal grand jury in Boston probing the company is examining 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, emerges as de la Torre has asked to postpone testifying on Capitol Hill in response to a subpoena requiring him to appear on Sept. 12.
Meanwhile, the Dallas-based company has been struggling to find buyers for more than 30 hospitals it owns around the country. Last week, two Steward facilities in Massachusetts closed, leaving about 1,200 workers jobless, according to the state.
CBS News has been reporting on Steward's activities as part of a year-and-a-half-long investigation documenting how private equity and other investor groups have siphoned hundreds of millions of dollars from community hospitals with devastating public health consequences.
Records reviewed by CBS News showed Steward hospitals around the country left a trail of unpaid bills, at times risking a shortage of potentially life-saving supplies.
Last month, patients as young as five years old had to be abruptly transferred out of a Steward-run behavioral health hospital in Phoenix after its air conditioning system failed and temperatures inside the facility reached 99 degrees.
A survey by Arizona's Health Department, which ordered the hospital to cease operations, revealed the facility was consistently understaffed and found "multiple issues with the HVAC systems, elevators, and kitchen equipment with no documentation of repairs being made."
The convening of a grand jury suggests there is potential for the embattled health care company and its executives to face criminal charges, though no charges have been brought.
De la Torre's spokesperson declined to comment whether the CEO is a target of the federal probe, but said any investigation into compensation would "show that Steward's executives, including Dr. de la Torre, were paid under market by acceptable industry standards."
The money trail
A review of financial disclosures and bankruptcy filings raises questions about whether de la Torre was using company money to fund a lavish lifestyle, that included two corporate jets owned by a Steward affiliate worth $95 million, according to the Senate panel.
In 2021, Steward's owners paid themselves millions in dividends, the same year de la Torre acquired a 190-foot yacht estimated to be worth $40 million.
In the year before it declared bankruptcy, Steward also paid tens of millions of dollars to other companies where de la Torre held significant stakes. Those payments included a $37 million for "management fees" to a company called CREF where de la Torre owned about a 40% stake, according to a person familiar with the ownership structure.
A spokesperson for CREF said the company provided an array of "real estate and facility-related services" to Steward's hospitals and de la Torre sold his stake last month.
The spokesperson also confirmed CREF won a competitive bidding process to oversee construction of a new science center named after de la Torre's mother at the Dallas private school his children attended — an arrangement first reported by the Boston Globe. Bankruptcy filings show Steward also donated $3 million directly to the school in 2023.
In her statement, de La Torre's spokesperson said the CEO had "invested more — professionally, personally and monetarily — into Steward Health Care that he has taken out of it," noting that he used his stake in Steward and other assets to personally guarantee loans made to the company.
"Dr. de la Torre did everything in his power to help Steward Health Care overcome numerous industry headwinds and challenges, including personally purchasing necessary equipment and supplies in order to address the needs of patients and personally guaranteeing loans for the company with his assets," the spokesperson wrote.
She pointed 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 filing showed during that time period, de la Torre was paid a salary of more than $4 million.
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, asserting the testimony needed to be postponed until after the bankruptcy proceedings were resolved.
"Unfortunately, while Dr. de la Torre has continued to fight for Steward hospitals and the patients and communities they serve, members of this Committee continue to cast aspersions on Dr. de la Torre and appear determined to turn the hearing into a pseudo-criminal proceeding," Merton wrote.
The letter triggered bipartisan pushback. Sen. Bill Cassidy of Louisiana, the committee's ranking Republican member, said "defying a congressional subpoena is consistent with a disregard for norms," adding 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 from Massachusetts, said de la Torre "must be held in contempt if he fails to appear before the committee."
"Dr. de la Torre's defiance of a subpoena to appear before the Senate is outrageous," their' statement read. "He owes the public and Congress answers for his appalling greed."
A "campaign of unlawful coercion"
Steward's dealings in Malta have drawn the interest of American prosecutors, according to people familiar with the matter. In July, CBS News first reported federal prosecutors at the U.S. Attorney's Office in Boston were investigating Steward on various allegations including fraud and violations of the Foreign Corrupt Practices Act.
An attorney for the whistleblower, Andrew Bakaj, told CBS News in a statement Tumuluri first raised his allegations that Steward violated that law — which prohibits U.S. citizens and entities from engaging in corrupt activities — to the Department of Justice in April 2023.
Tumuluri's company won a contract to run three of Malta's public hospitals in 2015. In his complaint to Congress, Tumuluri alleges de la Torre and other executives "conspired with" Maltese officials on a "campaign of unlawful coercion" to gain control of the contract Tumuluri's company had won.
According to the complaint, which spans more than 500 pages, the conspiracy allegedly involved an effort to have Tumuluri arrested and included repeated death threats aimed at him.
De la Torre's spokesperson said Steward took over the Maltese hospital contract only after Tumuluri's company "failed to deliver on its promises" and government officials were looking to replace it.
Last year, a judge in Malta canceled the contract altogether. An appeals court upheld the decision, citing "collusion between Steward and senior government officials or its agencies," according to reporting by the Times of Malta.
"As more damaging information is brought to light every day, we call on both the Department of Justice as well as Congress to finally hold Steward accountable for placing personal gain over the health of the patients they serve," Bakaj said in a statement.
A Maltese magistrate has recommended corruption charges against de la Torre and other Steward executives as part of an inquiry de la Torre's spokesperson wrote "was not based on an objective or reliable investigation, and there is no evidence of wrongdoing or illegal conduct by Steward international or its leadership."
The Attorney General's office in Malta did not immediately respond for comment
The magistrate also recommended charges against Tumuluri, but Bakaj said he is not aware of any action by the Maltese government and called the inquiry "far from independent, having been initiated by political actors."
"Mr. Tumuluri, on multiple occasions, has offered his assistance and testimony to the Malta authorities to ensure justice is done for the Maltese people," Bakaj wrote. "Ignored by Malta, this is why Mr. Tumuluri approached the U.S. authorities."