Three things to know before the Elizabeth Holmes trial
Good morning, and welcome to the Essential California newsletter. It’s Tuesday, Aug. 31. I’m Justin Ray.
She was once the world’s youngest female self-made billionaire. Time named her one of the “100 Most Influential People in the World.” She was profiled by the New Yorker and Fortune. Her offices were visited by a man who would become president of the United States. Actor Jared Leto called her “the only person I know who makes me feel like a lazy bastard.”
Now, if found guilty, she faces up to 20 years in prison and a $3-million fine.
Elizabeth Holmes, the former founder and chief executive of the blood-testing start-up Theranos (a combination of “therapy” and “diagnosis”), will go to trial this week, accused of defrauding investors and patients. She has pleaded not guilty.
Holmes famously dropped out of Stanford University at 19 to found Theranos in 2003, touting it as a cheaper, less invasive way to to run dozens of tests with just a prick of a finger and a few droplets of blood. But her plans to disrupt the medical industry were dashed by a 2015 investigation by the Wall Street Journal’s John Carreyrou, who reported that Theranos’ technology was inaccurate. In 2016, the Department of Health and Human Services effectively banned Theranos from performing blood tests.
Ahead of the trial in a San Jose federal courtroom, there are three important things to know:
Holmes plans to accuse her ex-boyfriend of abuse. Unsealed documents suggest that Holmes will defend herself by arguing that her ex-boyfriend, who was an executive at the company, was emotionally and sexually abusive, NPR reported. The argument will be that the toll of the abuse impaired her state of mind at the time of her alleged crimes.
The filing claims that her ex, Ramesh “Sunny” Balwani, controlled how Holmes ate, how she dressed and to whom she talked. “This pattern of abuse and coercive control continued over the approximately decade-long duration of Ms. Holmes and Mr. Balwani’s relationship, including during the period of the charged conspiracies,” wrote lawyers for Holmes.
In the filings, Balwani’s lawyer called Holmes’ allegations “salacious and inflammatory.” Balwani’s own fraud trial is set for next year.
Evidence at the heart of the trial has vanished. Prosecutors allege that Theranos staff destroyed a database that held three years’ worth of the accuracy and failure rates of tests, CNBC reported. In a January 2021 filing, the government said it had “never been provided with the complete records” and added that “the data disappeared.”
Attorneys for Holmes have accused the government of failing to preserve the database. “Rather than accept responsibility for that investigative failure, and the resulting evidentiary holes in its case, the government has chosen a different path,” Holmes’ attorneys wrote, adding that the government has insinuated that the loss of the data “reflects on Ms. Holmes’ supposed guilt even though she had nothing to do with it.”
Holmes’ team cited the loss of the database when trying to prevent the testimony of patients who said their test results were inaccurate. Her attorneys argued that the accounts would be “prejudicial without a fuller picture of the lab test statistics,” the Washington Post reported.
For Holmes, the move made sense; this testimony could be emotional and particularly damning to her defense. A judge ruled that patients could testify but with an important caveat: They cannot talk about financial, physical or emotional harm; they can talk only about facts. This means, for instance, that a patient who was told he had HIV would not be able to talk about the emotional toll of the false diagnosis. That patient can say only that he obtained another test that showed he hadn’t contracted the virus.
Holmes had a baby. She and her partner, William “Billy” Evans, welcomed a boy on July 10 in Redwood City, according to birth records obtained by ABC News. At some point, Holmes and Evans also got married in a secret ceremony, according to Vanity Fair. Evans is an heir to the Evans Hotel Group in California, though not much more has been reported about the couple.
Carreyrou, the Wall Street Journal reporter who published the exposé on Theranos and went on to release a book about the case, has a podcast about the trial. In “Bad Blood: The Final Chapter,” he had a cynical take on Holmes’ personal moves, suggesting that the birth was strategic. Of course, we have no way of knowing Holmes’ thinking, but Carreyrou points out that giving birth shortly before possibly being incarcerated is a risky bet.
Holmes is likely to take the stand and testify at her trial, according to documents submitted by her attorneys. I’ll continue to follow developments.
And now, here’s what’s happening across California.
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All of California’s national forests will be closed beginning late Tuesday. The closures will go into effect at 11:59 p.m. Tuesday and will stay in place until the same time on Sept. 17, according to an announcement by the U.S. Department of Agriculture Forest Service’s Pacific Southwest Region. “We do not take this decision lightly, but this is the best choice for public safety,” said Regional Forester Jennifer Eberlien. Officials said they hoped to reduce the number of people visiting national forests to prevent anyone from being trapped during an emergency such as a wildfire. Los Angeles Times
Behind Hollywood’s glamour, an Instagram account highlights a darker side for workers. Last month, Ben Gottlieb, a 27-year-old lighting technician, wanted to show his support for his union’s campaign to improve working conditions on film sets, so he wrote an Instagram post calling for an end to 12- to 14-hour shifts. The post struck a chord, drawing more than 21,000 likes. Gottlieb was soon inundated with messages from industry colleagues sharing their stories, which prompted him to create a page dedicated to the cause. In just a few weeks, more than 500 posts have drawn nearly 17,000 followers to the page. Los Angeles Times
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POLITICS AND GOVERNMENT
Gov. Gavin Newsom has staked his future on how well he can emulate a budget-slashing tea party darling: former Wisconsin Gov. Scott Walker. Walker may seem an unlikely role model for the liberal Californian, but he has notched one big accomplishment that Newsom covets: The Republican is the only governor in American history to beat back a recall. Walker’s 2012 campaign found an effective boogeyman in labor leaders, a strategy that echoes Newsom’s today. Newsom’s campaign has been painting Republicans, particularly front-runner Larry Elder, the radio host, as resistant to vaccines and mask mandates. The clear hope is that voters take out their frustration over the protracted pandemic on the recall proponents. Los Angeles Times
CRIME AND COURTS
A second person is charged in the 2019 deaths of three Chinese migrants found in a trunk in San Diego. A federal prosecutor charged a 23-year-old El Centro man with the deaths of three Chinese migrants whose bodies were found in 2019 in the trunk of a car in San Diego. Saad Ali Awan was charged with two counts related to bringing undocumented immigrants across the border, including a conspiracy charge that carries a maximum penalty of life imprisonment or death. San Diego Union-Tribune
Lawyers for Chris Lambert, who created the podcast “Your Own Backyard,” have objected to a subpoena filed by Paul Flores’ defense attorney during this month’s preliminary hearing in San Luis Obispo County Superior Court in the death of Kristin Smart. Flores’ lawyers served the subpoena Aug. 10, arguing that Lambert may be called as a witness in the trial because of his interviews with several witnesses for his podcast. Lambert’s lawyers said the subpoena violated the podcaster’s constitutional privileges as a member of the media. KEYT
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HEALTH AND THE ENVIRONMENT
More than 1,000 Shasta County students and staff are quarantined due to possible COVID-19 exposure. Shasta County schools are struggling to find substitute teachers and staff while full-time faculty and employees sit in quarantine after exposure to someone with COVID-19. “We have more than 1,000 students and staff in quarantine,” Shasta County School Supt. Judy Flores said. Some students are in modified quarantine — meaning they can attend school if they are asymptomatic, are tested often, avoid extracurricular activities and follow masking requirements. Redding Record Searchlight
One consequence of the pandemic is showing up in an unlikely place: space. A summer surge in COVID-19 patients is diverting liquid oxygen from rocket launch pads to hospitals, leading NASA to announce that it will delay by a week the September launch of its next Earth-surveillance satellite. Oxygen chilled to its liquid form at -300 degrees F (-184 degrees C) is a crucial propellant for launch firms such as SpaceX, United Launch Alliance and Virgin Orbit. The industry is anticipating additional launch delays as patients on ventilators take precedence in the commodity gas supply chain. Los Angeles Times
The best entertainment and arts this fall, according to our experts. The Times has published a robust guide previewing fall movies, TV, music, books, museums and musicals. You should check out the offerings. I learned about the true-crime Showtime series “Buried,” about a family in Foster City. Los Angeles Times
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Los Angeles: Go for a hike! 82. San Diego: Get some sushi! 76. San Francisco: 67. San Jose: 80. Fresno: Chill out with a Wendy’s Frosty. 102. Sacramento: 89.
Today’s California memory is from Colman Ryan:
In 1970, coming from Ireland, I maintained the speed limit across the Golden Gate Bridge. Twenty five cents entry fee to the city. I drove through the Presidio on a beautiful sunny day in my newly acquired, $400 Ford Galaxy, 12 miles to the gallon at 35 cents. I was two hours early for my interview at the VA for a residency in medicine. I sat in the public parking lot overlooking the Golden Gate Bridge and multicolored sailboats for the whole time. I told the interviewer I’d accept junior janitor if not accepted for medicine.
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