Press Releases

LOWELL, MA – Today, Congresswoman Lori Trahan (MA-03), a member of the House Energy and Commerce Committee’s Health Subcommittee, wrote to the U.S. Department of Justice (DOJ), U.S. Department of Health and Human Resources (HHS), and the Federal Trade Commission (FTC) requesting that they investigate actions by Steward Health Care that led to the company’s bankruptcy and proposed closure of hospitals, including Nashoba Valley Medical Center in Ayer and Carney Hospital in Dorchester.

“I write to you with great urgency to ask you to heavily scrutinize these closure announcements as well as the decisions by Steward C.E.O Ralph de la Torre and his colleagues that led to this outcome, including the reported surveillance of potential critics and whistleblowers who could have sounded the alarm on this crisis sooner,” Trahan wrote. “Accordingly, I also urge you to hold Mr. de la Torre and his co-conspirators accountable for their roles in causing this crisis and increase transparency and accountability for predatory private equity firm purchases of healthcare systems in the future.”

Late last year, news broke of Steward’s dire financial situation that caused widespread concern about the company’s ability to continue operating its nine hospitals in Massachusetts. Following a series of questionable decisions by Steward executives, including engaging in a sale-leaseback agreement that saw the company sell off the land its hospitals operated on only to have to pay exorbitant rent prices that it could not afford, Steward announced in May that it was filing for chapter 11 bankruptcy. As part of the filing, Steward announced it would be looking to sell all of its hospitals, including those in Massachusetts. Last year, Steward sold its hospitals in Utah in a move that sparked outrage because of the company’s business practices and unpaid debts.

Reporting about Steward executives’ egregious salaries and shady business practices has shined a light on potential investigation points for federal enforcers. Following the sale-leaseback agreement that jumpstarted the company’s financial slide, Steward’s owners paid themselves more than $100 million in dividends. Around the same time, Steward CEO Ralph de la Torre purchased one of his two yachts – this one costing $40 million and that, as of February, was reportedly docked in the Galapagos Islands. Earlier this month, an investigative report also found that while the company was struggling financially, Steward executives spent more than $7 million to surveil potential critics and whistleblowers, and gather intelligence that could be used against them. Those expenses include more than $1.6 million paid to a British private intelligence from February to April of this year, just before the company’s bankruptcy filing.

“As PE investments continue to rise in the healthcare industry, we have seen an increase in bad actors using the healthcare system to make a quick profit at the expense of patients and providers,” Trahan continued. “These predatory private equity companies have placed stakeholder profits squarely above the communities they are supposed to serve.”

In March, the FTC, DOJ, and HHS launched a cross-department inquiry into the impact of private equity and corporate greed in health care. Trahan applauded the creation of this initiative and wrote to the federal enforcers in June encouraging them to look into the business practices of Steward executives that caused this crisis. Earlier this month, it was reported that Steward is under federal investigation for fraud and violations of the Foreign Corrupt Practices Act. Trahan’s request today would expand the scope of that investigation to include potential domestic crimes as well as the consumer harms patients have faced because of the company’s actions.

A digital copy of the letter sent today can be accessed HERE.

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