One of my longstanding positions has been that societies do not prosper when they are divided. Dialogue is one of the best solutions for societal division – the more the better. A second best is getting information from both sides of ideological divisions so one can at least know what the other side is thinking and why.

Although I am a lifelong Democrat and center-left, I have long subscribed to the Wall Street Journal. Now that conservatism now means MAGA rather than gray-suited pro-business Republicanism, I also subscribe to the Epoch Times. I will make the occasional run on OANN (One America News Network). In Texas, you get Fox News about half the time you go into a bar or restaurant. Because Fox has a paywall – I do my Fox listening on Sirius XM.

For mainstream and leftist, there is the New York Times, the Washington Post, CNN, and the Week. For international news, the Guardian, the Economist, Courrier International (a French compilation of news stories around the world), the Sydney Morning Herald and Folha de São Paulo. On business, Fortune and the much better Business Week. Then there are the academic journals.

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But back to the main point, reading across the political spectrum has its advantages. One of the best advantages is when their side comes up with material for your side that your side would never have bumped into in a million years.

Which brings us to today’s juicy scandal from the Wall Street Journal. The story is about an unbelievably shady operator of a hospital chain. I read what this guy did and it was just one OMG after another after another. The fact that he is running a set of hospitals and the victims were sick medical patients makes everything about thirty times worse.

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Are all capitalists or super-rich entrepreneurs like this?

No.

Did the free market punish his behavior?

Yes. He was driven to bankruptcy – although he acquired significant wealth from his shenanigans that he may be able to preserve.

Are publicly run health care systems immune from terrible administration?

The waits are awfully long at the British National Health Service.

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That said, if you wanted Exhibit A for what is wrong with letting unregulated capitalists do with hospitals as they damn well please, this is the strongest Exhibit A you can think of. The villain of this story is not as rich as Elon Musk. By America’s standards in plutocrats, he is Tier 6 Level C – a small time but nontrivial CEO.

But if you want to know what is wrong with letting corporate executives and the 1% do whatever they want, this is what is wrong with letting corporate executives and the 1% do whatever they want.

Read the Wall Street Journal even if you have to subscribe to get around the paywall.

There is much to learn about the bad stuff going on that you can’t see.

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The CEO Who Made a Fortune While His Hospital Chain Collapsed

By Jonathan Weil

Aug. 18, 2024 5 30 am ET

Steward Health Care System was in such dire straits before its bankruptcy that its hospital administrators scrounged each week to find cash and supplies to keep their facilities running.

While it was losing hundreds of millions of dollars a year, Steward paid at least $250 million to its chief executive officer, Dr. Ralph de la Torre, and to his other companies during the four years he was the hospital chain’s majority owner.

Steward filed for bankruptcy in May, becoming one of the biggest hospital failures in decades. Conditions at some of its hospitals have grown dire. In one Florida hospital, a pest-control company last year found 3,000 bats.

This month in Phoenix, where temperatures topped 100 degrees, the air conditioning failed at a Steward hospital, forcing patients to be transferred elsewhere, according to a court filing. Also, the kitchen was closed because of health-code violations. The state last week ordered the hospital to cease operations.

Steward’s bankruptcy has drawn government scrutiny. A Senate committee has launched an investigation and subpoenaed de la Torre to testify next month.

Last month, on the day Steward said it would close two Massachusetts hospitals, de la Torre was in France to attend Paris Olympics equestrian events at the Palace of Versailles.

The former cardiac surgeon owns a 190-foot, $40 million yacht called Amaral and a 90-foot, $15 million sportfishing boat called Jaruco, according to the Senate committee. He owns an 11,108-square-foot Dallas mansion, valued at $7.2 million by the county. Other residents of his exclusive Preston Hollow neighborhood include George W. Bush and

Mark Cuban.

He paid at least $7.2 million in 2022 for a 500-acre ranch 45 miles south in Waxahachie, according to the property deed. Two private jets that the same Senate committee valued at $95 million were owned by a Steward affiliate that is majority-owned by de la Torre.

Massachusetts Gov. Maura Healey called for de la Torre to be federally investigated. “He basically stole millions out of Steward on the backs of workers and patients and bought himself fancy yachts, mansions and now apparently lavish trips to Versailles,” Healey said.

De la Torre declined to be interviewed. He said in a statement that the two boats are worth less than the Senate committee said. “These values are obviously inflated,” he said.

A spokeswoman for de la Torre said “he was regrettably on a family vacation that was planned and paid for last year” when the hospital closures were announced.

Once a renowned surgeon, de la Torre became CEO of Steward’s predecessor in 2008 and took over majority ownership of Steward from its private-equity owner in 2020.

De la Torre could have “become one of the most recognized heart surgeons in the world,” said Paul Levy, who was chief executive at Beth Israel Deaconess Medical Center in Boston when de la Torre worked there. “But he was driven to be something different, and the something different was to be rich and famous and a big commercial success.”

De la Torre’s spokeswoman said, “Dr. de la Torre made more money as a heart surgeon than in his first years as a corporate CEO.”

Several current and former colleagues said de la Torre, a Harvard Medical School graduate, is brilliant and charming but also domineering, demanding absolute loyalty. Some said they witnessed him yelling and cursing at people who disagreed with him. “It would be career suicide to take him on in a public meeting,” said a person who has worked for de la Torre at Steward. “He did not want to hear multiple viewpoints or thoughts. He wanted people to agree with his idea and basically just move on.”

Dr. Michael Callum, a friend of almost 30 years who is a top Steward executive and board member, said that de la Torre is hard-charging and passionate but that he never saw him curse at anyone. “I would say I think Ralph has been severely mischaracterized recently,” Callum said.

Steward has been trying to sell the 30 hospitals it operated in eight states. The two Massachusetts hospitals Steward flagged for closure had failed to get qualified bids.

The $250 million in payments from Steward to de la Torre and to his businesses are based on public disclosures from Steward or companies it dealt with. The total likely understates the full tally because Steward’s bankruptcy-court disclosures in most cases have covered only the 12 months before it filed for chapter 11. Some of the $250 million was paid to de la Torre directly. Other payments were to companies that did business with Steward where he had big ownership stakes.

De la Torre got his majority stake in Steward in 2020 when the company’s private-equity owner, Cerberus Capital Management, transferred its 90% stake to a physician group he led in exchange for a $350 million promissory note.

The next year, while the company struggled financially during the Covid pandemic, Steward distributed $111 million to its shareholders. A review of public filings and internal Steward records shows that de la Torre owned about 73% of the company, implying his share of the distribution was about $81 million. Later that year, de la Torre bought his $40 million yacht.

De la Torre’s spokeswoman said he received the cash to partially repay a loan to a Steward affiliate that he had guaranteed personally.

Steward’s finances worsened after that. By the end of 2021, Steward’s liabilities exceeded its assets by $2 billion, compared with a $1.5 billion deficit a year earlier. Steward lost $365 million in 2021 and $269 million in 2022, according to previously undisclosed Steward financial statements viewed by The Wall Street Journal.

Another payout came in 2022, when Steward sold a healthcare business it owned to CareMax, a public company, in a cash-and-stock deal. Steward transferred $99 million worth of the shares it got to a company owned by de la Torre, according to CareMax disclosures. That was most of the shares CareMax paid. Since the deal, CareMax’s stock is down 98%. CareMax filings show de la Torre hasn’t sold any shares.

Steward also made payments to two of de la Torre’s other companies. It was paying a management-consulting firm majority-owned by him at a rate of $30 million a year, a bankruptcy-court filing shows.

Steward said the firm, Management Health Services, employed 16 people, including Steward executives. Steward said they “provide executive oversight and overall strategic directive.” Steward effectively paid its CEO’s firm, which employed Steward executives, for executive management services for Steward.

De la Torre’s spokeswoman said the only payments he received from MHS were for salary. She called MHS a payroll vendor. But it also owned hard assets including the two private jets, according to RZJets, which tracks aircraft history. One, a Bombardier Global 6000, was valued at

$62 million, according to the Senate panel, while the other, a Dassault Falcon 2000LX, was worth $33 million. The pilots were on MHS’s payroll, according to people familiar with the matter. Both jets were sold this year.

Steward also paid $37 million to a company called CREF from May 2023 to May 2024, according to a bankruptcy-court filing. CREF is 40%-owned by de la Torre, according to people familiar with the matter, and provides real-estate and facility-management services. The other 60% is owned by CREF’s founder and CEO, Robert Gendron, who was a Steward executive vice president from 2018 to 2022 in charge of real estate and facilities.

A CREF spokesman said that de la Torre first invested in CREF in 2021 and that the company “has delivered the highest quality services to Steward hospitals, as it strives to do for all its clients.”

Steward’s filing didn’t say how much it paid CREF in previous periods.

De la Torre’s spokeswoman said CREF made no cash payments to him.

Levy, de la Torre’s former boss, said from Steward’s early days it was clear to him that the hospitals spent too much, including on well-known doctors and splashy advertising. De la Torre funded a national expansion by selling Steward’s real estate to a large hospital landlord, Medical Properties Trust, leaving Steward with hefty rent payments.

De la Torre’s lifestyle extended to the world of equestrian sports. His wife, Nicole Acosta, 29 years old, competes on her horse, Dante SPH, and trains at a facility down the road from the ranch in Waxahachie. It couldn’t be determined how much they paid for the horse, but it was sold at auction in 2014 to a Russian couple for 2.8 million euros, equivalent then to $3.5 million. She and de la Torre, 58, married in 2022 at an elaborate wedding in Ravello, Italy, on the Amalfi Coast.

Education, Labor and Pensions in a bipartisan vote authorized an investigation and subpoenaed de la Torre to testify at a Sept. 12 hearing. A federal grand jury in Boston is investigating Steward, including whether it violated antibribery laws in a deal to run state-owned hospitals in Malta.