Retired four-star general and former U.S. Defense Secretary James Mattis wrote admiring messages to Theranos founder Elizabeth Holmes after she told him of her startup’s technology, but after he joined the board he came to question her promises, jurors heard at Holmes’ criminal fraud trial Wednesday.
“There just came a point where I just didn’t know what to believe about Theranos anymore,” Mattis testified.
Mattis was the commander of U.S. and allied forces in the Middle East when he first met Holmes in San Francisco in 2011 after he gave a speech, he testified. She described blood-testing technology that could be used on the battlefield, and the two embarked on an email correspondence, Mattis told jurors.
“Thanks, young Elizabeth. I’m a strong believer in what you have designed/built and hope we can get it into theater soon to test it,” Mattis wrote in 2013.
Holmes’ alleged claims that Theranos machines were deployed by the U.S. Defense Department on the battlefield in Afghanistan and on medevac helicopters are a key issue in the case.
Holmes built a star-studded board that in addition to Mattis, included fomer U.S. Secretary of State Henry Kissinger, the late Secretary of State George Shultz and William Foege, former director of the U.S. Centers for Disease Control, highlighting a knack for wooing powerful people to her cause.
Mattis, who would later invest $85,000 in Theranos and sit on the firm’s board, said as a military commander he was captivated by Holmes’ description of a single, small device that could rapidly test blood.
“It would be very, very helpful if it could do what she said it could do,” Mattis testified. “We deal with a lot of violence and we were taking a lot of casualties. You could determine, ‘Do you need to do a medevac in the middle of the night, during a storm?’ What she alluded to me about the speed of this, it could help doctors make decisions about triage, who gets treated first.”
Holmes, he said, was his only source for information about Theranos when he undertook what turned out to be a fruitless effort to get the Defense Department to test Theranos’ devices “side by side” against other companies’ blood-testing machines. He said he wasn’t aware that Theranos’ technology was ever deployed by the department.
Mattis resigned as defense secretary in 2018 after former President Donald Trump announced the withdrawal of U.S. troops from Syria over the strong objections of Mattis and others on the national security team.
Holmes is charged with a dozen felony fraud counts related to her failed Palo Alto blood-testing startup. The Stanford University dropout, who founded Theranos at age 19 in 2003, is accused of bilking investors out of hundreds of millions of dollars, defrauding patients, and misleading patients and doctors with false claims that Theranos’ machines could conduct a full range of tests using only a few drops of blood from a finger-stick. She has denied the claims.
During cross-examination, Holmes lawyer Kevin Downey asked Mattis if he was aware that, “Theranos devices were sent to Africa and traveled with the chief surgeon” of the U.S. Africa Command. Mattis said he wasn’t aware of that. The Securities and Exchange Commission has claimed that “Theranos’ technology was never deployed by the U.S. Department of Defense.”
After Mattis retired from the military, Holmes invited him to join the Theranos board in 2013 to help the company enter the commercial blood-testing market, he said. “It was pretty breathtaking, Number 1 what she was talking about doing,” Mattis testified. “I thought it was a very worthy project if it was going to reduce the cost of health care. And also the accuracy and just the speed. I could understand how this would be very helpful in every medical setting.”
Prosecutor John Bostic showed jurors an email from Holmes to Mattis advising him not to talk to a reporter about how Theranos’ technology worked — specifically that “there is a single device that does all tests.”
“I thought it was rather strange,” Mattis said. “Why wouldn’t we want to talk about that?”
Bostic showed the jury a slideshow from the first Theranos board meeting Mattis attended, that said the company could perform 2,000 tests. Prosecutors have alleged that Theranos’ machines could only run a dozen types of tests, and was using other companies’ machines for other tests. Mattis said he did not recall being told Theranos used third-party machines for testing.
“I took as good faith that what we were being told was accurate,” he testified. “I assumed that when they’re saying, ‘These are the Theranos results,’ it was from Theranos machines. Looking back it appears that was not accurate. I thought all along we were doing it on Theranos gear, and I was a member of the board.”
After a 2015 Wall Street Journal exposé on Theranos, another board member asked Holmes in an email how many patients had their blood tested on Theranos’ machines and how many on other companies’ devices, an email displayed to jurors showed. “We do not have a good % number right now,” Holmes responded.
Mattis at that point “didn’t know what to believe,” he testified. “There had been too many surprises. There was not the transparency. The fundamental issues that (Holmes) was … grappling with, we only saw in the rear-view mirror.”
Holmes lawyer Kevin Downey elicited from Mattis that other Theranos board members were a “strong group” with members having scientific, engineering and business expertise that he lacked, and that they could “absolutely” ask questions if they were uncertain about anything to do with the company.
Holmes faces up to 20 years in prison if convicted.
