Former U.S. Secretary of Defense James Mattis testified on Wednesday in Elizabeth Holmes’ federal fraud trial that she misled him into believing the Theranos technology could save the lives of troops in battle.
Four-star Gen. Mattis testified that he first met Holmes in 2011 while still serving in the Marine Corps. where he oversaw troops and the wars in Iraq and Afghanistan. After his retirement from the U.S. in 2013, Mattis joined Theranos’ board of directors and invested $85,000 of his own money into the Silicon Valley startup, according to multiple media reports. He later became the secretary of defense under former President Donald Trump in 2017.
Mattis said that Holmes appeared to be in control of the company and allegedly told board members what to discuss with the press during her time at the helm, The Verge reports. He also said that he seems to have been misled about the capabilities of Theranos’ Edison device. Mattis said during testimony that Holmes presented herself as “sharp, articulate, committed” in meetings and was “aggressive” about trying to work with the Department of Defense, multiple media outlets report. He said that Holmes did not say that Theranos didn’t have the resources to work with the U.S. government and she did not mention a commercial launch of the device.
Holmes notably claimed that the Edison could perform multiple blood tests with just a drop of blood. Mattis testified that he thought that technology was “pretty breathtaking” for potential applications on the battlefield. To his knowledge, Mattis said the Theranos blood analyzing technology was never deployed in a clandestine operation, military helicopters or anywhere else in the military, The Verge reports. The testimony differs from Holmes’ message to investors in which she alleged the Edison devices were being deployed in Afghanistan.
Mattis also testified that he visited the startup’s headquarters in 2013 after his retirement from the military. During his visit, he saw the Theranos analyzer but didn’t see any of the commercially available equipment that both Erika Cheung and Surekha Gangakhedkar testified was being used for most blood tests.
Holmes appointed Mattis to Theranos’ board of directors as a board member for a $150,000 annual salary, though he testified that he would have done it for free because he believed in Holmes and the company, Spectrum News reports.
Mattis had lost faith in Holmes by the time of his departure in late 2016 after a number of articles from the Wall Street Journal in 2015 unveiled some of the happenings at the young company.
“There became a point where I didn’t know what to believe about Theranos anymore,” Mattis testified, Spectrum News reports.
The Theranos board of directors consisted of a number of high-level executives with little connection to the medical device and biomedical industries, including former secretaries of state George Shultz and Henry Kissinger, former defense secretary William Perry and former Wells Fargo Bank CEO Richard Kovacevich.
Holmes and Theranos were once believed to be the next shining stars of Silicon Valley. Holmes claimed her company would revolutionize blood testing with technology that could analyze tiny amounts of blood and inked retail partnerships with Walgreens and Safeway. Forbes in 2015 recognized Holmes as America’s richest self-made woman based on Theranos’ multibillion-dollar valuation at the time.
Investigative reporting soon dismantled Holmes’ technological claims, raising questions about whether she and others misled investors. The downward spiral culminated in the 2018 shutdown of the company, with the U.S. Securities and Exchange Commission accusing Holmes and Balwani of what it described as a “massive fraud.”
Holmes, along with former Theranos president and COO Sunny Balwani, faces 10 counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that she knowingly misled investors by claiming Theranos technology could revolutionize blood testing. They have both pleaded not guilty to all charges.
Balwani’s trial is expected to follow the Holmes trial.
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