On Christmas Eve, 2017, Chris Fearne sold the nation another scam – Steward Health Care, the real deal. We were told they ran 36 hospitals, employed 37,000 professionals and cared for two million US patients. Steward was obliged to invest €200 million of their own money into Malta’s healthcare sector. Surely, nothing could go wrong.
Steward is now millions of dollars in debt. It’s facing several lawsuits, including a $40 million claim for failing to pay US healthcare staff. The future of all 10 of its Massachusetts hospitals is in doubt. They’ve already closed New England Sinai Hospital. A new facility Steward should have built to replace Norwood hospital lies abandoned because contractors weren’t paid.
Steward faces being dragged before Congress for failing to turn over financial statements. And, yet, Steward boss, Ralph de La Torre, acquired not one but two massive luxury vessels – one costing $40 million, the other $15 million.
De La Torre is a familiar face in Malta. In April 2018, he met then prime minister Joseph Muscat in Castille. Muscat bragged that “the relationship (between Malta and Steward) will bring excellent results to Malta’s healthcare”. De la Torre remarked that Steward would be “providing a transparent service”. Tellingly, Muscat took no questions from reporters.
Muscat didn’t want awkward questions. Steward was already facing accusations of financial mismanagement in the US. Their “stellar” track record was nothing but another Labour con.
But Muscat had far more serious issues to hide, particularly his own links to de La Torre. Filings before the US Securities and Exchange Commission (SEC) alleging violations of the Foreign Corrupt Practices Act allege that de La Torre offered Muscat a seat on the Steward board once he left his government role. Those filings were revealed by the OCCRP (Organised Crime and Corruption Reporting Project).
They allege that de La Torre travelled to Malta between September and December 2017 and met with Muscat several times. De la Torre met Ram Tumuluri in February 2017 and allegedly boasted he could issue “brown bags” to bribe Maltese government officials to close the hospitals concession deal. Tumuluri claimed de la Torre offered him €2 million to give up the concession and, if he didn’t, he’d go “over his head” and negotiate directly with Muscat’s government.
Those US SEC filings level more serious accusations at Muscat. During a meeting in Castille, Keith Schembri allegedly pressured Tumuluri to sign the purchase agreement to hand over the concession to Steward. In the middle of that meeting, Muscat allegedly stormed in and threatened: “Do I have to bang your heads to get this done?” He demanded the agreement be signed within half an hour.
The 505-page complaint before the US SEC made more shocking allegations. Shaukat Ali, who, together with Muscat and Tumuluri, received tens of thousands of euros from Accutor AG, allegedly warned Tumuluri that Malta is a “mafia state” where “the cost of life is less than €10,000”. He pointed out that if the government could get rid of Daphne (Caruana Galizia) it could quite easily “get rid of him” too.
Muscat issued a statement denying those allegations. “I was made aware of Steward’s interest in the (hospitals) concession after Steward and VGH (Vitals) reached an agreement in principle,” he declared.
That statement is false.
Muscat told Fearne in October 2017 that Steward would take over the concession, well before the sale of purchase agreement was signed on December 21, 2017.
No wonder Joseph Muscat lobbied Robert Abela in favour of Steward immediately after being ousted- Kevin Cassar
In September 2017, when Vitals was still asking Muscat’s government for documentation to obtain financing from Deutsche Bank, Schembri was already meeting Steward representatives in New York. Muscat was with him on an official visit. Muscat surely knew who Schembri was meeting. Schembri declared under oath that he did nothing behind Muscat’s back.
On November 8, 2017, Konrad Mizzi flew to London on the explicit directions of Muscat to meet Steward Health Care’s CEO. On November 21, Steward’s CEO informed the company legal advisor that the Maltese government intended to meet Tumuluri to terminate its relationship and threaten him with criminal action.
Muscat knew about Steward’s involvement well before any “agreement” was reached between Steward and Vitals. The filings before the US SEC indicate that the “agreement” was only reached after Schembri threatened Tumuluri that he would “fabricate false criminal charges” against him and get him arrested.
As late as January 27, 2018, Armin Ernst, Steward’s CEO, told a company lawyer: “Ralph does not want to wait”, referring to de la Torre. He later wrote to Schembri on his personal e-mail informing him that, “after discussions” with “Ralph”, they wanted to replace the performance bond they were obliged to provide through the banks with a simple performance guarantee in “the form of a letter”.
That same Ralph de la Torre who Muscat met now faces accusations of diverting millions of dollars from Steward into his own pocket and the pockets of private equity. While Steward was selling hospital land and buildings and burdening his company with millions of dollars in annual rent, de la Torre was giving himself massive pay days.
With those millions, de La Torre bought a $40 million 190-foot yacht named Amaral. It has six bedrooms, cabins for 15 crew members, a gym, a living and dining room. He bought another $15 million 90-foot sport fishing boat, Jaruco, described as “the most ambitious custom sportfish boat ever built”.
Meanwhile, Steward hospitals are closing down, supplies are short, staffing is atrocious, medical tools are being repossessed and creditors are owed millions of dollars. Steward is even short of paper on which to print prescriptions. And St Luke’s lies dilapidated.
No wonder Muscat lobbied Robert Abela in favour of Steward immediately after being ousted. No wonder he gave Steward a €100 million termination guarantee. No wonder he’s in such a panic over the Vitals magisterial inquiry.
And Abela keeps praising Steward and protecting Muscat.
Kevin Cassar is a professor of surgery.