How Private Equity and an Ambitious Landlord Put Steward Health Care on Life Support
Source: Organized Crime and Corruption Reporting Project (OCCRP)
As bankrupt Steward Health Care faces ongoing Congressional and grand jury probes over the failed management of its hospitals in the United States, OCCRP has found new evidence that Steward’s landlord and a private equity firm, working alongside the hospital chain’s CEO, created deals that severely hamstrung Steward but enriched themselves.
The end result was a zombie hospital chain that chronically lost money but lived on for years, propped up by the landlord with hidden cash infusions that made Steward look like a thriving business even after executives privately conceded it was insolvent.
More than 295,000 documents obtained by OCCRP, working with the Boston Globe, give new insight into how private equity firm Cerberus Capital Management, Steward’s landlord Medical Properties Trust (MPT), and longtime CEO Ralph de la Torre saddled the health care operation with billions of dollars of unsustainable debt. Meanwhile, Cerberus and de la Torre extracted more than $1.3 billion from the financially troubled company, and MPT profited from charging Steward exorbitant rents that the firm could not afford.
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Massachusetts senators Elizabeth Warren and Edward J. Markey described the mechanism through which MPT provided capital to Steward so it could keep paying rent as having the hallmarks of a Ponzi scheme. In a letter just before the hospital chain filed for bankruptcy urging MPT to play its part in keeping Steward’s hospitals open, the senators said: “MPT has — along with Steward — plundered these hospitals.”
Read more: https://www.occrp.org/en/investigation/how-private-equity-and-an-ambitious-landlord-put-steward-healthcare-on-life-support
It's a very long article on a complex subject; but reading it can help one understand how such crimes can be orchestrated in our era of finance capital, and why vigilance and enforced regulation is crucial to the continued stability of our society. To put it bluntly, capitalists can never be trusted and must always be under serious scrutiny from powerful oversight authorities wielding the most severe penalties humans can think of. As this case shows, people tend to die as part of the process of creating billionaires.
If you have Amazon Prime, OCCRP did a three-part documentary (one hour each) called "Mafias and Banks" on the relationship between organized crime, international financial organizations and politicians that's showing on that streaming service now. It's a history of international criminal money laundering, and business and political complicity thereof, from Al Capone to very recently. It'll make your hair stand up, your skin crawl and your blood boil.
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