Elizabeth Holmes trial: Theranos founder's testimony turns the tide

The Elizabeth Holmes trial: Her testimony may have turned the tide

Elizabeth Holmes Trial, Theranos

12/1/2021 9:05:00 PM

The Elizabeth Holmes trial: Her testimony may have turned the tide

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and start reading now.In early September, at the beginning of the criminal-fraud trial against Theranos' founder, Elizabeth Holmes, her lawyers asserted a subtle but important point about her celebrity during the mid-2010s. Her white-hot public profile, they said, wasn't something she sought. It was a marketing ploy devised by Chiat Day, the image polishers favored by Steve Jobs. Holmes was the star of the show at Theranos because her story was so good: the precocious entrepreneur who set out to democratize healthcare with a revolutionary blood-testing device. It was her story, not her technological prowess, that wowed investors and made her a billionaire.

Holmes has always been the main attraction. So it should have come as no surprise that she would need to occupy center stage at her trial, by taking the stand in her own defense. It's a perilous move for any criminal defendant but perhaps the only move for a performer as gifted as Holmes.

So far, she hasn't disappointed.Indeed, she and one of her top lawyers, Kevin Downey, spent four days in court singing a pitch-perfect duet that attempted to portray her as the biggest victim of the company she founded. The climax came Monday afternoon — all the best moments of this trial have come late in the day — when Downey, having just guided Holmes through jaw-dropping testimony that she had been raped as a Stanford University student and forced into unwanted sex by her much-older boyfriend and business partner, Sunny Balwani, gently asked her a series of leading questions.   headtopics.com

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Had Balwani forced her to talk to investors, he wanted to know. No, she replied. How about journalists? No again. Her business partners at Walgreens and Safeway? Her own board of directors? No, no, and no, Holmes said. What impact, then, did Balwani have on her, Downey asked.

"I don't know," she replied, her voice trembling, her eyes clouding with tears."He impacted everything about who I was, and I don't fully understand that."It was a masterful moment — not for what Holmes said but for what she implied. She stands accused of fraudulently lying to everyone Downey asked her about and faces up to 20 years behind bars if convicted. Until now, her defense had been a matter of straightforward denial: I never lied to anyone, and any misstatements I might have uttered were crafted for me by others. But now, by accusing Balwani of rape, she was adding a second layer to her defense: I can't be held responsible for my own actions, dear jurors, because I was under the spell of an awful man — one who can't take the stand to refute my claims, conveniently, because he's on trial next month over the same crimes of which I'm accused.

Think of it as half a Svengali defense: I didn't do it, but, whatever I did, the devil made me do it.'The Show is here'That Holmes would testify at all was revealed just an hour before the end of a rare five-day court week, on Friday, November 19. Earlier in the day, as the prosecution prepared to rest its case, there had been a sense of anticipation in the courtroom: Would she, or wouldn't she? It felt, suddenly, as though the entire trial had been leading to this moment.

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By chance, I had walked through security that morning just as Holmes and her mother arrived. A US marshal looked past me and turned to a colleague."The Show is here," he said. The next thing I knew, Holmes had passed through the metal detector and was standing next to me. I wished her a good morning, and she cheerfully wished me one back. headtopics.com

Once again, the climax came late in the day, when Downey rose and declared,"The defense calls Elizabeth Holmes."Simply seeing her face was a revelation. Holmes has attended every day of the trial, sitting masked, muted, and erect at the defense table. And now here she was on the stand, looking every bit her famous self. The jury, which had endured week after dutiful week of testimony from duped investors and lab technicians, was suddenly being treated to peak Holmes: the low voice, the confident diction, the charismatic eye contact, the scientific-sounding jargon that signal brilliance and earnest ambition. It was as if Holmes had been frozen in time since mid-2015 and then thawed out to take the witness stand.

And she was good. Downey had her recount how she got started in business, having once dreamed up a pill that could serve as a diagnostic device."Did something like that exist?" he asked her."Not that I knew of," she said."There was glucose monitoring. But no digestibles or wearables." She was as mesmerizing as ever, and exceedingly well-rehearsed. When Downey gave her what seemed like a general instruction to"tell the jury" the basic chemistry of a blood test, she turned her body and talked directly to them.

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Holmes alleged that her former partner, Ramesh"Sunny" Balwani, manipulated her and was responsible for the company's deceptions.Yichuan Cao/NurPhoto via Getty Images (Holmes). Justin Sullivan/Getty Images (Balwani)Downey eventually got down to business, asking Holmes questions that were tailored to rebut the prosecution's four main allegations. Yes, she had personally added the logos of Pfizer and Schering-Plough to reports prepared by Theranos, making it appear that the pharmaceutical giants were endorsing the company's blood-testing device. But she hadn't meant to deceive, and she wished she'd done it differently. Yes, Theranos touted its relationship with the US military — but that's because the company had invested tens of millions of dollars on products designed for the battlefield, even if nothing ever came of them. Yes, she hadn't told investors that Theranos was using conventional blood analyzers, not its own finger-stick devices. But the silence was necessary to protect trade secrets around how it was modifying the commercially available machines. And sure, maybe Theranos had distributed financial projections that were delusional at best — but others, particularly Balwani, were responsible for cooking up the numbers.   

Unlike previous witnesses, who mostly ignored the jury, Holmes stood each time they entered the courtroom and turned to face them as they filed past her. (Only one juror regularly returned her gaze.) But as her testimony proceeded over several days, Holmes became more and more locked in on Downey — especially when the questions turned to her relationship with Balwani. headtopics.com

Before her testimony, Holmes had given little indication that her relationship with Balwani, who served as president of Theranos, was anything but loving. Downey started at the beginning, guiding Holmes through their personal history: how they met when she was 18, how they had kept in touch when she started at Stanford. Downey then asked Holmes a seemingly innocuous question. Why had she left Stanford during her sophomore year to pursue a business venture?

Until now, this moment in her rise to glory had always been a standard part of Holmes' public patter. In her well-worn telling of her origin tale, Holmes would recount how she had skipped so many classes at Stanford because of her startup side project that it made sense to quit school and concentrate on building the business.

Not this time. Following a long pause, she gave a new answer to a question she'd been asked hundreds of times."I was raped when I was at Stanford," she said."I decided to leave to pour myself into building Theranos."Immediately she began to cry."I wasn't going to class," she said."I was questioning how I was going to be able to process that experience and what I was going to do with my life. I decided I was going to try to build a life by building this company."

The room was silent, save for her sobbing. Adriana Kratzmann, a deputy who serves as a stern enforcer of courtroom decorum, stood up and handed Holmes a box of tissues. Holmes took one and wiped her eyes and nose.From there, Downey set out to elicit detailed and often lurid descriptions of Balwani's treatment of Holmes. She described him as initially offering her a feeling of security in the aftermath of her rape."He said I was safe now that I had met him," she testified. But ultimately, Holmes said Balwani morphed into a domineering presence who insisted that she kill the person she was and"become a new Elizabeth." In her telling, Balwani told her when to sleep, when to eat, whom to talk to, and how to act."He felt that I came across as a little girl," she said, and he implored her"not to be giddy in my interactions."  

The notion that Balwani had somehow coerced Holmes came up in detailed pretrial motions — indeed, it's why the two of them are being tried separately. But this was the first time the jury was hearing the tale. Holmes, tellingly, didn't once suggest that Balwani had induced her to commit any crimes — because, remember, she hasn't copped to committing any. But she did paint a pitiful picture of herself."Sunny felt I was too feminine — that I was like a little girl," she said."And that if I wanted to be successful I needed to be like a man. I was a monkey that was trying to fly a spaceship."

Holmes, under Downey's baton, ended with a flourish. Her voice regained its strength as she described her heroic efforts to right the ship at Theranos after Balwani left. She hired a new management team, received limited Food and Drug Administration approvals for some blood tests, and submitted papers about Theranos to scientific journals. It was as if Holmes couldn't abandon the self mythology she had peddled for so many years. Even as the victim of a monster, the story she told about herself had to end as it always ended: with a dazzling display of her determination and brilliance.

The human element vs. the hard facts From a legal standpoint, this new version of events — Holmes, in tears, a woman abused by the man she loved and trusted — has a somewhat tenuous relationship to the charges she faces. It's not enough for the prosecution to prove, as it has amply demonstrated, that Holmes fed investors a steady diet of deception. The government has to make the case that she

intendedto defraud them — that she did it on purpose. In this regard, her story about Balwani is a bit of a gamble. It doesn't matter, in the eyes of the law, whether she was abused while she was committing fraud as long as she knew her actions were fraudulent.

But as a defense strategy, the move left prosecutors in something of a bind. They couldn't ask Balwani to dispute the accusations, because his lawyers have made clear he would avoid self-incrimination by invoking his Fifth Amendment right. And they couldn't press Holmes too hard on the stand, because they could come off as callous and indifferent to her suffering. On Tuesday, as the cross-examination of Holmes got underway, it was left to Assistant US Attorney Robert Leach to steer the jury away from her sob story and back to the case at hand.  

Leach has none of the defense team's sense of timing or flair for the dramatic — he's more of a grind-it-out guy. So he set out to damn Holmes with the same rhetorical device he has relied on throughout the trial: repetition.Over and over, Leach asked Holmes whether she wished she had handled things differently. When she added drug companies' logos to reports Theranos prepared. When she was less than forthright on CNBC about her company's technology. When employees raised issues internally. When the board member Richard Kovacevich, the former CEO of Wells Fargo, asked twice to clarify which types of blood analyzers Theranos was using. The questions were a roundabout way of reminding jurors what really mattered: the way Holmes repeatedly misled about the product she was selling to investors and about the level of backing she had from key business partners. 

The prosecution struggled to trip up Holmes on cross examination, but there's still more questions to come.Kate Munsch/ReutersLeach also took Holmes through her history of her text exchanges with Balwani, hammering home two points. First, he demonstrated there was much that was loving about their relationship — a point intended to counter any suggestion that Holmes lacked agency over her decisions. Second, he showed that Balwani concealed little from Holmes, which would make her a knowing participant in the game they were playing.

Leach scored numerous points in the cross-examination. He reminded jurors that Holmes had personally altered the drug-company reports. He also got her to testify that said she hadn't seen a mental-health professional about her relationship with Balwani until she began mounting her legal defense. But he also missed some opportunities. In an extended riff, he asked Holmes whether she considered the many older men who had served on her board of directors — including Henry Kissinger, George Shultz, James Mattis, and Sam Nunn — to be trusted mentors. But he failed to ask the question he seemed to be building up to: whether she had ever confided in them that she lived in fear of Balwani, as she was now claiming.

At other times, Leach's exchanges with Holmes were simply confusing and awkward. He asked her whether, during her on-again, off-again relationship with Balwani, she had ever had a relationship with someone else. She had, she said.Leach:How long did it last?

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NPR Cookie Consent and ChoicesObviously, this changes everything: women that suffer from abuse cannot possibly be liable for any form of fraud or white collar crime. Case closed. Hereeeeee we go it’s sad that this is the excuse of screwing people out of millions Too little, Too late. No one feels sorry for this lying trick

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NPR Cookie Consent and Choicesthanks Josie Smollette finds her story plausible, so there is one person. Free Britney....

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