0:00

Is there a story that you just can’t get enough of?

Like you could read a book about it.

You can watch a documentary about it.

You can listen to 100 hours of podcasts about it.

You can read a thousand articles about it and you still will not feel over-served for me.

0:17

It’s obvious.

It is the downfall of fairness and its founder Elizabeth Holmes.

This story is my kettle corn.

If you have not been following here, is a brief summary to whet.

Your appetite in 2003.

Elizabeth Holmes was a 19 year old Stanford.

0:34

Dropout.

She The company fairness, that claimed to revolutionize the blood testing industry.

If you’ve had your blood taken, you know, that this experience is terrible.

There’s a long needle, there’s the rubber band around your arm.

There’s a vial of blood, the whole thing sucks, and their nose comes along, and says, we can do.

0:51

All those same tests for cancer and HIV, and cholesterol with a pin prick, no needles.

A decade into founding the company.

Early 2010’s Elizabeth Holmes is a rock star.

She raises hundreds of millions of dollars.

1:06

She appears the cover of Fortune Magazine, her iconic red lipstick, black turtleneck thing.

She partners with Walgreens to get her Tech into dozens eventually even thousands of stores.

The value of the company soars to nine billion dollars and she becomes for a spell.

1:22

The richest self-made, female billionaire in the world.

Now, it’s October 2015.

Holmes is at the peak of her wealth, and iconic status and the Wall Street Journal publishes a long article by the investigative reporter, John Kerry, Rue the upshot those magical machines that perform hundreds of tests from a drop of blood that are all over Walgreens across the country.

1:47

Yeah, they don’t work.

The tests are unreliable.

The company is basically shipping bricks to health clinics and we later learn, they’re not just shipping Duds.

They are going after.

Former employees, like Tyler, Schultz and Erica Chung names to remember, to keep the truth Under Wraps.

2:04

It doesn’t work, theranos craters.

There are civil and criminal investigations.

There’s a settlement with the SEC and finally, the hammer Falls the Department of Justice Sue’s Elizabeth Holmes for fraud, along with her business, partner and boyfriend.

Sonny, bhawani another name to remember.

2:21

And finally, this brings us to 2021 the United States versus Elizabeth Holmes.

The trial for the last few months.

I have been listening and reading and watching mainlining the story.

And at last, it seems to be reaching its final chapter closing arguments are likely to begin this very week.

2:41

And if convicted Elizabeth Holmes faces up to 20 years in federal prison, plus millions of dollars in fines to talk about this whole story and especially the trial.

We have Rebecca Jarvis, ABC reporter.

2:57

And the host of the extraordinarily addictive podcast, the Dropout we talk highlights.

We talked low lights.

We talked Bombshells, but at bottom, I am interested in two questions.

Number one is of Elizabeth, Holmes is convicted of wire fraud in the next few days or weeks.

3:13

What is the evidence that will be her downfall?

And number two, what are the odds that she pulls?

Another Houdini and is found not guilty.

I’m Derrick Thompson.

This is plain English.

3:50

Rebecca Jarvis is the host of the Dropout podcast.

She is ABC News, Chief business technology and economics correspondent Rebecca.

Welcome to the podcast.

Thank you, Derek.

I love what you’re doing.

So I think before we get into the sort of details and the legal nitty-gritty, the I think I want to observe is that this case is box office.

4:12

Like, every day of the trial.

You’ve had a crush reporters.

The courthouse people lining down the block at 4 a.m.

People coming to the trial dressed as Elizabeth Holmes.

The blond wig red lipstick, black turtleneck, and I’m seeing these reports thinking, like this sounds like a Star Wars premiere.

4:28

Not a big trial for wire fraud in the biotech space.

So lots of questions for Rebecca Jarvis, the star ABC reporter, but first, I want to ask you Rebecca.

Eka the person.

What is it about this story that you think makes it so Blockbuster?

4:45

Well, I think it’s Elizabeth Holmes herself.

The fact that people would actually dress up as her and I’ve also seen a woman who was selling the full Elizabeth Holmes, look for $100 outside the courthouse, the blond wig the black turtleneck and the red lipstick as well as some like blood energy drink that she was selling.

5:03

I did not drink it.

I don’t, I don’t know about that, but I think it’s the fact that Elizabeth.

Is such an enigma, but she’s also an outlier.

She’s someone who was able to raise almost a billion dollars.

When most women are really struggling to raise any kind of money from the Venture Capital world and it’s also a technology that found its way into the mainstream.

5:24

It was inside of Walgreens.

And so the stakes are really high and you start to see as a consumer.

That this is something you might have come in contact with.

And the fact that it got out in front of all these populations and now suddenly Only is is allegedly.

5:39

A fraud is really scary.

Hmm.

Someone once told me they’re only three stories in the world up down and up and down.

So I think they’re all up and down, right?

Don’t they all end up doing that at some point, right?

So up would be like the classic hero’s journey, right?

5:56

Like, you know, Harry Potter, Luke Skywalker orphans rising down, is the great tragedy, you know, King Lear a fellow Hamlet, basically royalty falling and then up and down is the Icarus plot that Underdog Rising.

In Rises and then Falls.

And I feel like in this third genre, the Elizabeth Holmes story is narratively perfect in a way that few real life stories are perfect.

6:17

Like it’s almost too clean.

There’s a Hollywood Sheen to her Icarus plot that probably explains why Adam McKay and Jennifer Lawrence are teaming up to make it a Hollywood movie in any way.

But so you’ve been following this Blockbuster for years on your fabulous.

Podcast the Dropout you have spoken to former Thanos employees biotech expert.

6:37

Patience of the thousands of hours of tape that you’ve recorded.

What is the interview that stuck with you?

The most I think there’s two.

One is sunny Belle.

Whinnies attorney Jeffrey coopersmith because when I spoke to Cooper Smith, this is when Elizabeth and sunny Bell hwanhee were charged together.

6:57

And since then their trials were severed.

And what I find fascinating about this is that back in 2019 Cooper.

Smith was adamant that this was the two of them in it together.

That Sunnyvale wani wasn’t duped by Elizabeth Holmes, that there was nothing there.

7:14

That seemed consequential in their relationship in the interview that I did with coopersmith.

Now, of course, that’s Sonny belmonte’s attorney.

But as people who have been following this know at this point, the relationship is really a big part of the defense’s argument.

7:29

What what?

Yeah.

And just give us 30 seconds on that relationship between homes and Sunday about wanting.

So the allegation is that he was physically.

We mentally and sexually abusive towards Elizabeth Holmes, over their 10-year relationship.

That’s what they have put forward in court.

7:45

That is what Elizabeth Holmes, testified to on the stand.

It is also something that Sunny Bell wani firmly denies.

He’s not being called in this criminal trial.

He’ll have his own criminal trial.

He said through his attorneys that he would plead the fifth if he was called to testify at all in this trial.

8:01

So we haven’t heard from him yet.

But to me, it is pretty interesting that his attorney.

Didn’t he didn’t touch anything relating on any level whatsoever to their relationship.

And then I think the other interview that really stands out, Derek is Erica Chung who she was one of the original whistleblowers.

8:22

People might remember her name with Tyler Schultz, Tyler, Schultz, of course, the grandson of George Shultz who was chronicled in the Wall Street Journal articles.

By John Kerry Roo, Erica.

Charles Schulz, former Secretary of State, and this is his son who worked for Theron a grandson.

Yes, grandson experience.

8:37

And and George Shultz.

Of course, was a very famous board member of their nose.

And so, what, what, stood out to me with Erica is that Erica Chung was afraid when we first met, and this is now many, many years ago, but she believed everything that she was saying was accurate about theranos that.

9:01

There were problems inside the company that they were not following.

The protocols.

Of course, Erica Chung was fresh out of school.

A student who wanted to do the right thing and was only employed at theranos for a handful of months.

But in her eyes, she saw a lot of things that were questionable, but this interview that she, and I did together.

9:18

Now, many years ago.

She was fearful and part of that fear came from the fact that their nose went after her.

When they found out that she was speaking to the Press.

She received notices from David boies, a very powerful attorney who also was on their noses.

9:37

And who also was a major legal counsel to both Elizabeth Holmes as well as the company, their nose.

And just I think that fear, you know, people might speak out against their companies.

They might have something to say that they think is happening inside.

9:54

That’s questionable.

You don’t hear that degree of Fear and anxiety usually from an employee.

So we’re in 2021 the trial.

The United States versus Elizabeth Holmes.

I want to start at the very beginning opening statements.

10:12

What is the prosecution’s case?

What is the defense?

Well, the prosecution’s case is that when Elizabeth Holmes was running out of money.

She lied.

That’s the gist of it.

The defense’s case is that this is a young woman and they Continuously Hammer home this idea that she was 19 years old.

10:32

When she found it.

There are notes.

Of course.

She’s 37 years old today, and there were many years that she ran the company, but the defense continues to go back to this idea that she was 19 years old.

She founded a company.

She’s a True Believer in that company.

And if anything went wrong and yes, there were mistakes at the company that she was doing those things, not because she knew or intended to defraud anybody, but because she was potentially misled by people, like Sunny Bell, wani and many And what we’ve seen throughout this case is that almost everybody in Elizabeth’s orbit.

11:05

Somehow misled her.

If you’re listening to what the defense’s argument is.

Hmm.

So she is charged with wire fraud and conspiracy to commit wire fraud.

And I just wanted to do a quick plain English definition on what that means.

Wire fraud basically means lying for money using Interstate Communications technology.

11:24

So like if you want to steal some money from your neighbor and you lean across the porch, And you shout like hey neighbor.

I invented a miracle drug that promises eternal life.

Give me a thousand dollars a month that is fraud.

But if you start, emailing people around the country about your fraudulent, miracle drug thingy, that is wire fraud.

11:42

So, lying, bad lying for money with technology federal offense and you’ll be prosecuted by the Department of Justice.

So I want to talk about the four key moments of the trial here.

Number one Denise.

Yeah.

Mmm.

11:58

She was one of the first As Witnesses for the prosecution.

She was the corporate controller of fairness.

That means the financial eyes and ears for the company.

She said, Elizabeth was well aware of the financial state of the company.

Why is that a big deal for the prosecution?

12:14

Well, it’s a big deal because it links Elizabeth to the actual finances of the company, which were grossly misrepresented.

If you follow the allegations of the prosecution to investors people like, Like investor Brian Grossman who threw pfm, put a hundred million dollars into theranos and allegedly was told by Elizabeth that the company was banking 200 million dollars in revenue from the dod and that Revenue was allowing the company to continue, moving forward, Revenue that the company never earned.

12:52

There’s also so many places where you see that the company is claiming in in.

Is in various Communications with investors that they’re making huge amounts of Revenue or that they’re forecasting, huge amounts of Revenue to some investors.

13:09

They, they said they portrayed themselves as being able to make a billion dollars by the next year from Pharma companies and hospitals.

Well, that actual number was zero.

So where did these where did these projections come from?

And Denise?

13:24

Yam is the person who qualifies what actually was happening in?

Inside the company and that it would appear the come, the actual numbers were coming out of thin air.

Now, of course, anybody in Silicon, Valley is potentially going to say, things get fast and loose with numbers and projections can be somewhat pie in the sky, but there are places where Denise really called out that and other investors along the way where there was.

13:49

No there there.

There’s not even a speck of it.

You’ve also pointed out that Theron has didn’t have an outside auditor.

Yeah, yeah, or 5 years at a company.

That’s a little strange for a nine billion dollar company in terms of its valuation.

14:07

And it goes again to your first point intent.

If Elizabeth knew she was lying about the company and knew that the company desperately needed money.

You can connect the lies to motivate the fraud.

She’s not just a booster going around.

14:22

Making random grandiloquent promises about what her magical technology can do.

She’s making Promises knowing that the company is running out of money and that seems to go to the prosecution’s case.

So the number that the second biggest Whopper that I’ve taken from your reporting you’ve already mentioned it it’s the Pentagon promise.

14:43

So the board of Thera knows had several high-ranking state department and defense department figures and Elizabeth was very fond of telling investors that the technology was being used by the Pentagon overseas, for example, in Afghanistan in Medevac helicopters.

How true were these claims that their nose was anywhere close to having military contracts?

15:05

Well, Elizabeth Holmes in her own words has said it is not true that it was never used on a Medevac helicopter.

It was never deployed to Afghanistan and yet as you say person, after person from investors to people like Safeway at one point, their nose was attempting to be placed inside of Safeway Steve bird the former CEO of Safeway took the stand and was I mean so complimentary of Elizabeth on the stand and yet as it turned out, there were tons of things that she had told him.

15:40

This is one of them or if that she had, let allegedly told him that were inaccurate.

He made this idea.

He said this, and I’m trying to remember exactly what he said.

In his words.

It was something like she insinuated that it was being used in places that Americans weren’t even aware of this idea that like she couldn’t And fully disclose to him where it was because it was it was secretive.

16:05

And you read this case Elizabeth, this case, Elizabeth might have accidentally told the truth, right?

I can’t even tell you where these medical Technologies are being used.

Yes, because the places in which they’re being used, are a fantasy world in your own head.

Well, and I was going to say, Roger parle off.

16:21

Also, who is the writer?

Who wrote a really beautiful story about fortunate and unfortunate?

Chin magazine about their nose in 2014 that turned out to mostly be untrue.

In that case.

He also testified that she told him.

16:39

I can only tell you this off the Record, but we are very secretive lately using our devices in Afghanistan.

So it was always this idea that, you know, I’m going to let you in on this little piece of information.

At least the way that that everybody has testified.

16:55

I’m going to let you in on this little piece of private information.

About how special our devices are.

So we have Whoppers about Revenue.

We have Whoppers about where the technology is being used.

That brings us to number three.

The Pfizer logo.

17:12

Yeah, and I did not know about this from reading the journal or other reports.

I learned about it from your podcast and this is astonishing.

So 2010, their nose creates a 55 page report about a sec Knology and it prominently displays the logos of Pharma companies like Pfizer like that.

17:31

The imprimatur is in like the top left or top right corner of the page and investors said that these reports help to persuade them to invest in the company.

Rebecca did these reports in fact come from Pfizer?

17:47

And if not who put the logo there.

This was I would say this was one of the biggest bombshell sitting in the courtroom because Elizabeth testified, she put the logo there in the top corner.

She put the Pfizer logo.

She put the schering-plough logo and later.

18:03

In her testimony.

It turned out.

She also put the GlaxoSmithKline logo, and it wasn’t just the logos.

She also changed some of the language inside the report.

So, just to back up a second, Derek, these reports you did a great Preamble about what, what they were Thera toes, had sent these reports.

18:23

Originally to Pfizer, originally to schering-plough.

When these companies reviewed them, they didn’t come back and say yes.

Yes.

Yes, they just reviewed them.

And there was no further anything, but it came from theranos when Elizabeth then sent this out to investors when she shared it with other interested parties.

18:46

She added the company logos to them suggesting that it was coming directly from the company.

Now on the stand.

And you could even feel what what I’m going to back up here for a second, Derek.

And this room.

It’s Really interesting to see the jury.

These 12 people who are mostly hearing the story for the very first time and then you have all the journalists sitting on the other side and the journalists have reactions.

19:11

Not, you know, we can’t people aren’t reacting and in scoffs and coughs and whatever else.

But you can feel the shifts in people seats.

And this was one of those moments where the eye rolls.

You could just feel the eye rolls in the audience because Elizabeth Describe to her attorney that she had no idea that anybody would perceive it in such a way that it came from Pfizer or that it came from schering-plough.

19:38

And I think we’re to me where it gets really hard in a case like this is I look at the jury and I say, okay, these people are supposed to simultaneously, believe that Elizabeth Holmes was Savvy enough to raise almost a billion dollars and start a company and do all these things.

19:58

Things that the average person could never do but at the same time, they have to hold in their head that she’s naive enough to believe that putting a logo on the top of a page.

Altering the language in a document, wouldn’t insinuate that it came from that organization.

20:15

I should make sure I understand what you said because that’s really important detail.

She sent these documents attesting to the quality of theranos technology to Pfizer and to GSK.

And, you know these large Pharmaceutical Companies, they did not respond to those emails.

20:34

And then she put the logos on them.

Like, yes, this is, this is, this is like my first terrible ridiculous laughable example of, you know, having a miracle drug and shouting at my neighbor across the porch.

You want to give me a thousand dollars a month.

If I just send an email to Moderne, you know, to to Pfizer be on deck and say, hey I invented this miracle drug.

20:55

What do you think about it?

And don’t get a response because why in the world?

Do they respond to a random person sending miracle drug?

That is stations.

I could just not good.

This is akin to me, just putting the Pfizer Moderne Beyond Tech logo on a piece of paper and handing it out to my neighbors and emailing that to people across the country.

21:14

I mean, it’s, it is quite a stretch to say that no response equals.

You have our validation, right?

Well and I look, I’ll take a step back.

She was having conversations and I think that’s also where the defense is constantly.

They Constantly return to this idea that there’s a kernel of Truth and things.

21:32

So their nose had been having conversations with Pfizer and GSK in.

Schering-plough.

That is not consummating, anything that is and this is also where a lot of Biotech investing experts will come in and say in its early years.

Their nose was having lots of early-stage conversations with Pharma companies.

21:51

That’s what Pharma companies do.

By the way, they go out and they meet 100,000 their noses every year in the Hopes that they will find the diamonds in the bunch and then they’ll proceed with business.

There knows a lot of these business ventures that began as a sort of feeling out didn’t amount to much after that.

22:11

Number for the final key piece of evidence that I see for the prosecution is the testimony of Adam rosendorf.

Adam rosendorf is the former lab director of theranos.

Tell us a little bit about who rosendorf is, and what he said on the stand rosendorf is an incredibly well.

22:28

Pedigreed scientist who worked for theranos for a number of years as the lab director over saw what was happening inside the company before the rollout happened inside of Walgreens.

So, there are no sir.

Rigidly started talking to Walgreens in 2010 and 2013 towards the end of the year.

22:46

That’s when their nose started rolling out these wellness centers and they ultimately got into 41, Walgreens locations, predominantly in Arizona, one location in California.

Ah, but rosendorf was there.

So he’s overseeing everything behind the scenes and he is saying I told Elizabeth directly.

23:07

I met with Elizabeth directly.

I also sent emails to Elizabeth.

I flagged over and over again that there were problems and we were not ready for this rollout.

And the message I got back from her was that, we needed to move forward, because promises had been made to Walgreens.

23:24

He’s somebody who has legitimate pedigree.

And and is there in a knowing capacity?

And he testified to a meeting for example, that he had face-to-face with Elizabeth, where she seemed very nervous in that conversation before the rollout and she had the countdown clock, going on the window inside of the office.

23:44

So he really places what’s happening internally and all the problems.

The company is having internally and he juxtaposes that with the external rollout and the what, what their nose and Elizabeth were projecting at the time, which is was a completely different.

And picture.

Give us one quick, example of what rosendorf saw internally that made him.

24:05

So concerned about the technology.

Well, the test just weren’t ready to go.

They were, they were getting feedback from the labs that test were coming back inaccurate that their protocols weren’t panning out that the proficiency testing wasn’t working.

So, right from the very early point, they were able to say this isn’t this cannot be rolled out in a clinical context.

24:28

Cassity right.

So basically they have this box, the Edison which is running these tests on the on the small drops of blood.

The company is representing to Walgreens that.

These are magical boxes.

That can run these extraordinary test.

Hundreds of tests on.

24:44

Like I said, everything from cancer to HIV cholesterol and here’s Adam, rosendorf.

The lab director saying, no, they can’t, they can’t run these tests.

They we’re having all sorts of failures in our validation studies.

I think this is a good time to bring in the defense.

25:02

So the defense says Elizabeth Holmes is an ambitious young woman who try to change the world and she failed and failure isn’t a crime and she relied on Experts like rosendorf to fix the technical aspects of the product that she a nineteen-year-old stand for Dropout.

25:19

Could never have had the ability to do on her own.

How important was the cross-examination of former lab.

Adam rosendorf.

It was very important.

Look, every us examination of a credible.

Witness is important, especially in this trial and the defense did a successful job in rosendorf.

25:45

Unlike for example, Safeways Steve bird.

They made him look a little more.

Like he had a bone to pick with Elizabeth.

Like there was something more personal there.

They also really I stood over and over again, that he’s the guy who was supposed to be validating things and he had in fact, validated some things and that’s also something that came up with a lot of witnesses.

26:11

The idea that if you’re the expert internally, who’s supposed to own this singular process and you validated it, whether it was Financial or scientific Elizabeth was relying on you as the person, she hired to make decisions.

26:28

So, they were successful, but I do also think, and I’ve talked to, a lot of legal analyst, he was able to share with the jury, a good picture.

Again, that juxtaposition of the picture at a minimum.

26:44

There were certain things that were coming up inside of their nose that were really antithetical and opposite from the message that their nose was conveying outwardly to Walgreens in the public.

And that is the real Ali when we get to closing arguments that’s going to be a very important piece of what the prosecution does to show how different these two things were So now we have the Blockbuster moment of the trial, the defense calls Elizabeth Holmes to the stand to testify.

27:18

What was the reaction of the courtroom when Elizabeth is called to testify in her own defense.

Well, first of all, the fact that they called her at the very end of the day with the one hour left.

No one was expecting that and I was in New York at the time.

27:36

So my reaction was booking a flight to San Francisco and me.

There was a Friday afternoon.

My colleague Mi Cohen was in the courtroom India Athen both exceptional producers who have worked throughout this trial with with our team with the podcast, but the everyone was shocked and I’ll tell you as soon as that next Monday, rolled around everybody’s waiting in line to get into the courtroom.

27:59

And that’s where the really crazy circus and long lines really started to begin when everyone knew she was going to be on the stand.

I think there’s this moment of first of all, the voice People talk about her voice.

We had yet to hear her voice at this trial.

So there were people who wanted to know how she going to talk.

28:15

But really the question was, what is she going to say?

And now, we have an answer and what did she say?

Well she was on the stand for seven days.

So she settled lat, she said a lot.

I think that the key points are both what she said, her allegations about Sonny bhiwani and then in addition, Into that how she said, a lot of what she said about her company and what was happening?

28:46

There were so many first.

First of all, when you go to the defense and the defense is direct, a lot of it was the origin story and then the Sonny Bill wanting defense, when you go to the cross and the prosecution’s questions.

It returns to everything we heard in the SEC deposition.

29:05

I don’t know, I can’t recall.

I don’t remember.

And then in the rare cases where Elizabeth Both could recall and could remember something.

There was a lot of I wish I had done it differently and this is the real question when it comes to a jury trial at.

And it’s also a question that legal experts look at and say, why do you put a defendant on the stand?

29:25

The question suddenly is not Beyond A Reasonable Doubt suddenly it is, do I trust this person?

And I think one of the real questions I’ve had being in the courtroom and looking at the jury is, do they Just Elizabeth Holmes, when they listen to her, they’re getting this fraction of the story.

29:44

Everybody else people who are listening to this podcast.

You probably know way more about Elizabeth Holmes or you’ve read way more about Elizabeth Holmes, then perhaps what’s been presented inside of the courtroom and and that so I do Wonder as I look at this jury.

30:01

I constantly am in wonder how their perception of her is.

Are they going to feel because they’ve sat in front of this woman.

For three months straight almost four months.

Now, how are they going to feel when it comes to Judgment day, which is right around the corner.

30:17

Are they going to be comfortable?

Putting guilty on a person who has sat in front of them with her family, every day.

They’ve been told by by the that was in the opening statements.

The defense said, she’s here with her family.

She’s a new mom.

30:33

She’s here with her partner.

She’s had a big crowd sitting behind her every day of this trial, right?

She’s testifying that her partner boyfriend, Sonny, bhawani was manipulative that he was emotionally, abusive even sexually.

Abusive, that was the core of the defense.

30:50

In addition to, as you said humanizing, this person showing her biography.

This is not a monster.

This is an ambitious person who made mistakes.

On the other hand.

You have the cross-examination from the prosecution.

That is just one.

I don’t remember after another plus.

31:06

A lot of mistakes were made and I don’t remember the details.

There is Is one exchange that you describe in your podcast, it literally made me spit out my coffee and I just want to read it out.

I think it really goes to How Deep The I don’t remember.

31:21

I can’t recall defense how deep it went.

So Elizabeth is on the stand and the prosecutor Bob Lee just trying to establish.

The fact that she was in charge of an effort to block the Wall Street Journal Expose.

And this is a critical point to make.

Because there’s something you said, it’s hard for homes to claim.

31:37

I was just trying to do the right thing, but also I had to destroy everybody who pointed out that my technology was a piece of junk.

So the prosecutor asks, Elizabeth about the journal Expose and he says, quote, you wanted to get ahead of the story, didn’t you Elizabeth?

I’m not sure what that mean prosecutor.

31:54

You wanted to get ahead of the story.

Elizabeth.

I don’t know what you mean by ahead of it.

Baa bleats, here brings the receipts.

He hands Elizabeth, the transcript of her own text messages to send me bhawani.

And one of them reads need to get Get ahead of all of it.

32:11

He just does that refresh your memory that you were trying to get ahead of it.

Elizabeth.

It doesn’t prosecutor reading these words.

Need to get ahead of it.

Doesn’t refresh your memory parentheses that you needed to get ahead of it.

Elizabeth.

32:26

I have a memory, but I don’t know what I meant.

So like I’m not a lawyer but my God, the legal term for this has to be steaming pile of BS as a reporter.

I wonder, you know, taking stock.

Of this moment as a piece of evidence and being able to see the jury, feel the weight of the courtroom.

32:48

What do moments like this capture?

I, it is such a struggle because I read it, but I feel the exact same way about you and I hear it and I feel the exact same way.

And there were so many times, prosecutor Leach said during the cross, Let me refresh your memory and he had the receipts.

33:05

He had other emails like this one.

This jury has sat day after day silently, without any emotion whatsoever.

Looking at this case, and I’ve talked to you, I haven’t covered.

33:21

Any other trials in, in my, in my career, in the way that I’ve covered this one actually sitting in the courtroom.

I’ve been told by a lot of journalists that jurors typically fall asleep.

And this is a dense dense trial.

So you could see how day after day, they might fall asleep.

33:38

I’ve never seen that once.

In this courtroom.

This jury is attentive, but they’re not a motive.

There’s no leaning in.

It’s not leaning back.

It’s just sitting there and taking it all in.

In and that makes it really hard for me to determine what their what the outcome is going to be.

33:58

Now.

One thing I do think as a small diversion here.

One thing I think is interesting is at the early days of this trial.

Again, people who may have listened to the podcast will remember.

One of the jurors, excused herself on religious grounds from The Trial because she said, My Religion, I’m Buddhist and I can’t pass judgment on someone.

34:18

I can’t put someone in jail, your job as a juror.

As judge oo, explain to her is not to determine whether someone’s in jail, you’re just, you’re looking at the verdict as guilty or not guilty.

Still, the fact that there was an individual at least in the early days of this trial who felt that she would potentially be in a situation.

34:42

She didn’t want to be in to me.

That’s telling that says she felt things were leaning in the direction of guilty that that she felt at least from the early days of testimony and again sitting across from Elizabeth Holmes that there was going to be a punishment for this interesting.

35:03

I want to touch on one more point that the defense has made a lot which is stated plainly the investors were a bunch of idiots.

Yeah, a lot of firms fell for this scam and I think we can say it was a, it was it was scammy whether or not You know, it is it is found to be illegal wire fraud, a lot of firms fell for it.

35:26

But a lot of investors that you spoken to did not fall for it and they’re very critical of the investors who gave Elizabeth Holmes.

Eventually hundreds of millions of dollars say a little bit more about that.

Why do sources from the latter group?

35:42

The investors who didn’t invest in Thera knows what do they say about the people who did throw their money behind Elizabeth?

Well, there’s a lot A lot of Follow the Leader.

There’s a lot of lemmings and they talk about that as part of the culture potentially inside of Silicon Valley, but also a lot of the individuals who ultimately put money with their knows, we’re not traditional biotech feces.

36:05

They were family offices.

Wealthy people Rupert Murdoch, the DeVos family, the Walton family, so they weren’t your traditional Specialists, who invest at the same time, the specialist who do this for a living.

36:22

Talk about the checks and balances you could have called up Pfizer and ask them.

What do they think you could have called up Walgreens?

At some point?

There were things that investors might have been able to do that.

They didn’t do at the same time.

One thing that the defense actually has done is they’ve insinuated that a lot of these investors were really good investors that they should have known better and the idea is more Elizabeth again, nineteen-year-old founder.

36:51

Didn’t know that all of these things, these statements that she was making or the statements coming out of their nose.

Could be confusing, could be misconstrued, but these investors who have hundreds of millions of dollars at their disposal.

They should have known better.

37:07

And and and so it’s this playing off of the idea of her, as sort of this unknowing hopeful optimistic founder and they should have dug in and done their job better.

I think of all the investors to Take the stand Brian Grossman, who I mentioned earlier.

37:24

He was a specialist and he did a lot of the things that you would do as a specialist.

And according to his testimony.

He was just completely misled that 200 million dollars coming from the dod.

That was not actually they’re looking very specifically at the science.

37:42

His team did reach out to Walgreens and got positive feedback.

So it’s more confusing when you look at someone like him.

Yeah.

I want to do a little bit of A break down here and say a bit more about how unusual this company was, and how unusual the investors were like, there is a vein of criticism that says, theranos is the story of Silicon Valley.

38:05

It is the typical story of Silicon Valley and I want to interrogate that a little bit.

If it were true that there are no subtracted, the investment of mostly major Venture venture capitalist firms.

That specialize in biotech then yeah, you could say Just goes to show that Silicon Valley is BS but as you pointed out, there knows did not get the backing mostly from Venture capitalists.

38:29

It, relied on individual investments from the Murdoch family, the Walton family, the DeVos family Betsy DeVos, former education, secretary the Cox family of Cox Enterprises you they the people who did invest invested in the later rounds in a company that did not have audited.

38:46

Financial reports.

You look at the board of directors, Henry Kissinger, former Secretary of State.

Eight, Jim Mattis, former Secretary of Defense, George Shultz, former Secretary of State William Perry, former Secretary of Defense.

This is a fantastic board of directors.

39:02

If your startup idea is to funded anti-socialist coup in Latin America, in 1977, or like plan, a light bombing campaign of the Middle East, like Henry, Kissinger is not an expert in the scientific Frontier of Phlebotomy.

It certainly has some point that must have come up at the trial that bizarre discrepancy between the Forties to the board of directors and the actual work of the company.

39:26

It did.

And yet again, the way that it has come up at the trial is more to validate that Elizabeth Holmes.

It’s come up from the defense.

It’s more to validate in the same way that it publicly validated Elizabeth in articles on big stages in front of giant audiences.

39:48

They’ve actually it’s it’s not they didn’t use it in the way that you’re saying it Derek and it’s but the way that you’re saying it is the way that anybody in the Science Tech, Silicon Valley business, press talks about it.

But this is again.

This is where I have these moments throughout this trial where I look at it through the Spectrum in the prism of my own experience, covering it, but also how the jury is seeing a really different picture in some respects.

40:17

Yeah, I think.

So interesting and you’re right, it goes back to one of the first things.

We said, this is not a trial about whether Elizabeth Holmes is a good person.

It’s not a trial about whether the Edison, the tech box is a piece of brick or a good technology.

40:35

It is about wire fraud.

And when the question is about wire fraud, it holds on, did she with intent lied to investors for money.

And so the composition of the board of directors while you know, interesting to a journalist like me.

Me might not go as directly to the prosecution’s case here.

40:53

As it goes to my case, which is that journalists should have known in, 2013-2014, that something was up because this was a biotech company that did not have the backing of largely the Biotech Industry.

So, I want to round this out, finish the sentence.

41:11

I want to play a game of finish the sentence, finish the sentence.

Number one, if Elizabeth Holmes gets off, if She is found not guilty.

The most important moment of this trial will have been what?

41:27

Elizabeth Holmes, taking the stand.

Say more.

Look my belief and having spoken to numerous legal experts on this topic is that this trial was always going to come down to Elizabeth Holmes and it was a question of whether the defense wanted to put her on the stand or not.

41:45

But if she takes the stand it is either.

Either Elizabeth Holmes, selling the jury, in the same way that she was able to sell investors able to sell her board of directors and able to sell the public.

Or it is the post theranos downfall story, which is if you poke enough holes inside of it people start to see the truth and that to me is like, ultimately what the question is.

42:09

Here are people going to look at her as a sympathetic character who is out to do the right thing or will they?

See her as a manipulator as somebody who couldn’t possibly.

42:24

It’s this idea that you have to hold these two very different people in your head.

Someone who can somehow suddenly managed to raise a billion dollars, get a company off the ground.

Do the unthinkable.

And at the same time be so naive that they make many, many errors, along the way that misrepresent and make people think one thing when something else is true.

42:48

And now the converse finish the sentence if Elizabeth Holmes is convicted the most powerful piece of evidence will have been what?

Again.

I think that Elizabeth Holmes being on the stand again, is the reason at the same time that that people would poke holes that the jury doesn’t believe her.

43:09

That there’s too many inconsistencies at the same time.

I do think that the 29 Witnesses who the prosecution put Our word from Brian Grossman, the investor who really knew his stuff and somehow still got duped to Steve bird, the Safeway CEO who is complementary of Elizabeth, but still showed over and over again through emails that he was being misled about what was actually happening to rosendorf.

43:39

The lab director who it is undeniable that there were red flags that he raised in writing.

He also did them in person and then Erica Ah, Chung who is a very valuable employee, worked hard, tried to do the right thing and Not only was Erica Chung who worked hard tried to do the right thing.

44:02

And as a result was punished by theranos and she told that story and it’s very hard again to see Elizabeth Holmes as an individual, who just wanted to do the right thing was a True Believer, but also hired David boies, who then?

44:18

When after 20 something year old employee who just was trying to make sure that the company was doing the right thing, right?

Rebecca Jarvis.

The Dropout is a must listen for me every single Tuesday.

It is a really special honor, honestly, to be able to talk to the voice that has narrated my coffee making for the last three months.

44:42

Thank you so much for your work and I will continue to listen to you every week.

Thank you, dear.

Eric, that really means a lot.

I will continue to listen to you.

I love your work written and podcasts, and I hope you continue to do it because it’s important service to our world.

44:58

Thanks.

Rebecca.

Be well.

Thanks, you two planning.

This with Derek Thompson is produced by Devon.

Manzi.

We definitely want to shout out the Dropout, Elizabeth Holmes on trial.

It posts.

Tuesday’s throughout the trial.

Listen, wherever you get your podcast.

Thank you so much for listening, this show.

45:14

If you like us, follow us on Spotify rate and review on a podcast.

Cast, we will be back with our second episode this week.

On Friday.

We will see you then.