US senators investigating the collapse of Steward Health Care, one of the nation’s largest private health systems, are confronting a problem they rarely face: a corporate leader who refused to testify before Congress.
The Senate Committee on Health, Education, Labor and Pensions is holding a hearing on Thursday focused on the crisis spawned by Steward’s financial woes, including allegations of poor care, hospital closures and state bailouts aimed at preventing even more shuttering.
The main person the senators want to talk to is Steward’s majority owner and Chief Executive Officer Ralph de la Torre. They even went so far as to issue the committee’s first subpoena since 1981. But de la Torre didn’t show up, citing a risk of jeopardizing Steward’s precarious bankruptcy and a not-yet-finalized legal settlement meant to keep most of its hospitals open and preserve about 30,000 jobs.
The hearing went ahead anyway, with nurses and local elected officials testifying instead. The Steward bankruptcy has attracted criticism from both Republican and Democrat lawmakers amid harrowing reports of deficient care. Even without de la Torre’s physical presence, his role in Steward’s financial unraveling and his personal enrichment while leading the faltering hospital chain was under scrutiny.
Steward executives “looted hospitals across the country and took millions in profit for themselves,” Massachusetts Senator Ed Markey, a Democrat, said in a statement. “We need answers and accountability.”
Senator Bill Cassidy, a Louisiana Republican, said in the hearing that he and Senator Bernie Sanders, a Vermont Independent who chairs the committee, would seek a resolution to authorize civil enforcement and criminal contempt proceedings against de la Torre to require him to comply with the subpoena.
“A witness cannot disregard and evade a duly authorized subpoena,” Cassidy said.
Corporate chiefs are frequently called to appear before Congress when their business is under scrutiny. It’s unusual for executives to refuse a request to testify, even if their company is embroiled in litigation.
The heads of Johnson & Johnson, Merck & Co. and Bristol-Myers Squibb Co. were questioned by the same committee in February about high drug prices. Former Boeing Co. CEO Dave Calhoun testified in June after a midair blowout of a 737 Max jet sparked scrutiny of its manufacturing practices. Former Lehman Brothers CEO Richard Fuld was grilled about bonuses and the firm’s substantial leverage in 2008 just weeks after it collapsed.
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