TL/DR –
Steward Health Care, a for-profit hospital system, spent over $7 million from 2018 to 2023 on research, intelligence-gathering, and surveillance services, despite running short of critical supplies for its hospitals. The surveillance targeted individuals deemed problematic by the company’s executives, and was authorized by the company’s General Counsel, Herbert Holtz, even as bills from medical vendors and staffing services piled up. Steward filed for bankruptcy on May 6th, 2024, and still paid its CEO Ralph de la Torre over $4.1 million in gross salary in the year preceding the bankruptcy filing.
Steward Health Care Spent Heavily on Surveillance While Facing Financial Struggles
While Steward Health Care was struggling with payments to vendors and running low on vital hospital supplies, it spent nearly $1.6 million on surveillance activities. This is according to documents that disclose six payments made to British private-intelligence company Audere International between February and April 2024. The largest bill, from February, was $465,204.
Steward declared bankruptcy on May 6, 2024. A recent investigation by the Globe Spotlight Team disclosed that the company relied on Audere to surveil individuals deemed problematic by Steward’s executives. Evidence, including emails, encrypted messages, and financial records obtained by the Organized Crime and Corruption Reporting Project, shows that Steward’s senior executives authorized over $7 million on research, intelligence-gathering, and surveillance services from 2018 to 2023.
Audere’s surveillance efforts included searching a former executive’s phone for compromising information and enlisting a subcontractor to surveil a critical financial analyst. The analyst was under surveillance for six days in March 2023, including monitoring visits to his daughter’s school.
Despite the company’s financial troubles, Steward’s general counsel, Herbert Holtz, insisted on prompt and full payment to Audere. The intelligence firm’s services were part of a “spare no expenses mission” explicitly ordered by Steward’s CEO, Ralph de la Torre, according to a January 2022 voicemail left by Holtz for the company’s financial officer.
The bankruptcy court documents disclosed that Steward Health Care paid de la Torre a gross salary of over $4 million in the year before filing for bankruptcy. The salaries of a dozen other top Steward executives also exceeded $1 million. However, a Steward spokesperson stated these figures were inflated and corrected information would be refiled soon.
De la Torre also received another $1.4 million for benefits, insurance premiums, non-business flights, and expense reimbursements in the year leading up to Steward’s bankruptcy filing. The document does not detail executive salaries and benefits from previous years, making it unclear whether these figures represent total compensation or if additional distributions were made to de la Torre and others who are also owners of the healthcare company.
De la Torre engineered the sale of the Caritas Christi chain of Catholic hospitals to New York private equity firm Cerberus Capital Management in 2010. As CEO, de la Torre expanded Steward’s operations into eight states. After buying out Cerberus and selling the hospitals’ land and buildings to a real estate investment trust, the new management team paid about $111 million in dividends to its stockowners, with the majority going to de la Torre, the largest shareholder.
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