A Steward spokesman would not say Saturday whether de la Torre would remain a majority shareholder in the Boston company he helped found in 2010.
De la Torre, the subject of several Globe Spotlight Team reports this summer, confirmed through his personal spokesperson that he has “amicably separated” from Steward.
“Dr. de la Torre calls for continued focus on this mission and believes that Steward’s financial challenges shine a much-needed spotlight on Massachusetts’ continued failure to correct its healthcare structure and the inequities in its state system,” reads a statement from its spokeswoman, Rebecca Kral.
The initial reaction to the end of de la Torre’s reign at Steward was harsh.
“Ralph de la Torre brought an unprecedented level of greed and mismanagement to health care in Massachusetts and could not leave soon enough,” said Governor Maura Healey. “Now, with five Steward hospitals ready to transition to new, responsible operators, we have the opportunity to not only preserve these hospitals, but also make them better for the communities they serve. And that’s exactly what we’re going to do.”
Julie Pinkham, executive director of the Massachusetts Nurses Association, said, “We hope that such a move does not in any way diminish a thorough review with full accountability for everything that occurred under his watch.”
Paul Hattis, senior fellow at the Lown Institute, a health care think tank in Needham, noted that the bankruptcy process had already effectively removed de la Torre from day-to-day control of the company.
“From the standpoint of trying to add value to a healthcare organization and the people it serves, he resigned many, many years ago,” Hattis said. “Everything became about him, not the mission.”
Senator Elizabeth Warren, Democrat of Massachusetts, said “good riddance” to de la Torre in a statement. “Ralph spent nearly two decades sucking all the value out of Steward Health Care, and as the hospitals got poorer, he got richer.”
On Wednesday, the Senate unanimously decided to forward a criminal contempt charge to the Justice Department after de la Torre ignored a subpoena from Congress to testify before one of its committees.
Warren said de la Torre’s resignation would not absolve him of any responsibility and that he would still have to answer for failing to respond to the subpoena. “Ralph is not free yet – authorities still need to prosecute Ralph’s contempt charges and investigate him for other possible crimes he may have committed as CEO of Steward,” Warren said.
De la Torre was essential to the founding of Steward. As CEO of the former Caritas Christi hospital chain, a struggling network of six Massachusetts hospitals owned by the Archdiocese of Boston, de la Torre sought investors who could recapitalize Caritas. Eventually, he struck a deal with New York private equity firm Cerberus Capital Management, which bought the hospitals and placed them under a new affiliate company, Steward. De la Torre remained at the helm of the for-profit business and immediately began expanding the network.
After growing slowly and struggling to maintain a profit, Steward in 2016 made a $1.2 billion deal with Medical Properties Trust, a real estate investment trust, under which MPT owned MPT’s hospital buildings and land. Steward, which Steward rented back. Most of the windfall profits from the sale went not to improve service, but to pay dividends to Steward’s owners, including de la Torre. The high lease obligations to MPT contributed to Steward’s unbearable debt, about $9 billion, according to the bankruptcy filings.
De la Torre’s abrupt resignation comes at a time when many observers question why he was still at the top of Steward, when he faces possible prison time for defying a congressional subpoena and is being investigated by US grand juries. and international.
De la Torre’s ability to maintain power until now has largely been a function of Steward’s board of directors, whose job it is to hire or fire the CEO and launch investigations into alleged misconduct.
The board — a close-knit circle of company insiders and close business associates who reported directly to de la Torre — remained silent about the CEO’s difficulties, and remained so until Saturday’s announcement. The board’s inaction alarmed many inside and outside the company, who said it was a classic case of corporate cronyism and the dangers of island boards.
Beginning in July, the Globe contacted everyone who served on Steward’s board over the past four years multiple times about their oversight of the company and knowledge of de la Torre’s financial dealings. All declined to comment on the record or did not respond to interview requests.
“Two questions,” said Lawrence A. Cunningham, director of the Weinberg Center for Corporate Governance at the University of Delaware, after de la Torre’s announcement: “Why did it take so long for the board to act? And why did they choose to accept his resignation rather than fire him for cause? Termination for cause would have eliminated any ongoing benefits, while dismissal allows those benefits to continue.”
In Quincy, Catherina Brancaccio received la Torre’s news with shock and dismay. For three years, Brancaccio and his family have sought accountability for the 2021 death of his 31-year-old nephew, Gilberto Melendez-Brancaccio, who died alone in an understaffed emergency room at the now-closed Steward-owned Carney Hospital. in Dorchester.
“He left a trail of death and chaos,” de la Torre’s Brancaccio said. “I pray he is held accountable despite his resignation.”
Globe staffers Hanna Krueger, Chris Serres and Elizabeth Koh contributed to this report.
Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him @bostonglobemark. Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.
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