Big Technology Podcast - The Theranos Trial Concludes — With NPR's Bobby Allyn

Episode Date: December 22, 2021

Bobby Allyn is an NPR tech reporter based in San Francisco. He's been waking up at 2 a.m. to watch the trial of ex-Theranos CEO Elizabeth Holmes from the courthouse. In this episode, Allyn breaks down the case for and against Holmes, the biggest moments in the trial, and the potential outcomes now that the jury is deliberating.

Hello and welcome to the big technology podcast, a show for cool-headed nuance conversations of the tech world and beyond. Well, last week, the trial of Elizabeth Holmes, the former CEO of Theranos, now disgraced, concluded. She is charged with all sorts of nefarious things, including wire fraud that stem from her leadership of the company. And, well, everybody right now is starting to wonder what's going to happen next to her, what will happen next in this case. What does it mean for Silicon Valley? We've had Aaron Griffith on in the past. She was out at the court at watching the trial. And now we're going to bring in another reporter who's been there through the whole thing.

Bobby Allen is an NPR tech reporter. He joins us today to discuss what the situation is with the Theranos trial and what we can learn from it. Bobby, welcome to the show. Hey, Alex. Thanks for having me on. How's it going, man? Going okay.

I think we should get out of the way that I'm not here because I'm the most qualified Theranos reporter, but because I bribed you with games of hot shot at a recent hangout you and I had at an arcade in San Francisco. I just thought I'd get that out of the way. That's true, but this has been on the calendar for quite some time. but okay yeah we could take that also um i just want to like let's get this out of the way like you're not going to talk the whole the whole podcast in like mpr voice are you mp there's no such thing as an mpr voice alex definitely i have tried to disabuse you of this false idea i talk like

i do to you as i do on the radio there's no mpr voice there is there is it's kind of like you know i'm we try to do it today in georgia there was a trial about That's like the Shweddy Balls NPR voice. We have evolved a lot since the Shetty Balls era. What is that? Oh, it's like a, it's a very famous. Not a person? S&L skit.

Look it up later. Oh, okay, I see. So you can, you're going to talk like an actual human being then? Yes, I'll talk like a human. I appreciate that. But, but you should, I know we're going to get into the Theranos trial in a moment. But can you do the thing that you were doing, the little warm up that you do before you go on? Oh, Peter Piper picked a prick of pickled peppers.

Peter Piper picked a prick of pickled peppers. Piper picked a prick of pickled peppers. I mean, not every NPR reporter does that. I just do it to make sure when I have my headphones on that my peas are not popping because the sound engineers in Washington will hear that and say, push your mic back or take that over because a popping pee is just really hot on the ear and it's unpleasant. Right. Well, I'm sure your vocal exercise in the beginning will really make our editor, Nate, very happy. So Nate, just a shout out to you in the beginning. Let's talk about this trial. What stage of the trial are we in right now? Yeah. So this trial's been going on for. three and a half months. Of course, the federal government is charging Elizabeth Holmes. As you mentioned, with wire fraud, we've seen nearly 30 witnesses take the stand that the government is called the defense mounted their side of the story in front of this jury, which included days of testimony from Elizabeth Holmes. Right now, it's winding down. And the, oh, shoot, actually,

because it's going to go, so I should act as if the jury is already deliberated, because if it's going to air Wednesday. I'll say the jury is now deliberate. Yeah, I'm leaving all of the sin, by the way. You are not. I am. We're recording. We're recording on a Friday, so, yeah. Okay, so the jury, okay, the jury is now deliberating.

I'm holding my nose and saying that because it's not true, but it will be true Wednesday. So jury deliberations are underway. So what does that mean? That means that the fate of Elizabeth Holmes is on the line that these eight women and, sorry, back up, that these eight men and four women who, are on the jury, are trying to figure out whether Elizabeth Holmes is a criminal, whether she intentionally and knowingly defrauded investors and duped patients, or if they believe Elizabeth Holmes, that she didn't do anything wrong, she pursued this company from a good faith perspective, that she was a go-getter, hardworking entrepreneur who saw her business fail,

but that's not a crime, and that the government just didn't meet its burden, that she you know, committed a crime beyond a reasonable doubt. And if you really look at the whole story of Elizabeth Holmes, it's much messier than the story that the government wants to tell. So the jury is, we'll be sort of hashing that out amongst themselves. Can you in like 60 seconds tell us what she's actually accused of? What's the crime here? Yeah.

So it's a federal wire fraud and conspiracy to commit wire fraud, which is sort of an old, timey sounding crime, isn't it, wire fraud? But if this happened over the mail, like if you sent, a check in the mail to someone, you're an investor and you sent a check in the mail to Elizabeth Holmes to invest in the company and that investment was made based on a lie, that would be mail fraud, right? This is wire fraud because it happened over wires. But she's accused of deceiving investors about what there knows technology could do, right? She had this proprietary device. She called the Edison or the mini lab. And she said I could test for hundreds of diseases

with a pinprick of blood. Prosecutors say that's total BS. That was never the case. She made false representations to investors. They lost lots of money and patients who went to Walgreens in Palo Alto and Arizona, who got tests, got faulty or error-ridden results, and they were duped. So that's kind of the core of the case against her. So you've been sitting in the courtroom, yeah? Yep. I've been in the courtroom in San Jose.

Reporters usually show up at like two or three in the morning to get a spot. I think there's 34 spots in the main courtroom. If you can't get in the main courtroom, you could go to, overflow, but there's been a lot of spectators. It's been like a bit of a scene in front of the courthouse every day. Right. So having been there and sitting through this case, what do you think the best argument for convicting her is? And what do you think the best argument for acquitting her is? What have you heard that's been convincing on both sides? Yeah. I guess that's a, I kind of reject the premise because it's not my job to say what's

convincing or not convincing. I know you're going to roll your eyes at this. Come on, come on, You're a person, you know, so just give us what you want. Right. I mean, there's a lot of, there's a lot of that. I mean, the government mustered lots of evidence. And I, I mean, I could tell you what struck me as. Yeah, okay. I don't, whatever words you need to make yourself comfortable about telling us what the strong argument was for the government and the strong argument for homes was you couldn't use those words.

Right, right, right. I'm not trying to split hairs here, but it's just difficult because like to members of the jury, what is like sticking with them is not necessarily. what, like, academics and journalists, like, attach themselves to. So it's always hard to know, like, what piece of evidence or what, like, legal theory is working. But, I mean, look, the government has recordings from Elizabeth Holmes, in her own words, before the defense called her, taking the stand, you know, talking about partnerships with the military that never materialized, that her blood testing technology would be used on battlefields when it never was, you know, talking about business partnerships that never came the fruition.

They had her on the stand saying under oath that she put the, she basically forged documents with the logo of Pfizer's and other pharmaceutical companies validating her technology when she didn't have their okay to do that. There's lots of instances of that, right, of Elizabeth Holmes exaggerating or allegedly lying about what this technology could do. There's all sorts of screwy stuff about the financials. I mean, the big narrative here is that when basically Elizabeth Holmes was up against the wall and Theranos was just burning through investor money and was on the brink of collapse instead of telling her investors that prosecutors say she lied, she covered it up, and then pulled a lot of shady things to conceal the fact that the company couldn't do what it promised to do. And then, of course, it imploded.

But it's not just a startup that has a big promise and fails. It's different because it's in the extremely regulated health care space, right? And prosecutors say the type of exaggerations were egregious and not just exaggerations, but that she crossed the line into criminal fraud. And that's why, you know, her life and liberty's on the line. She could go to prison. And the best defense against that? Again, I don't know.

You've heard. Yeah, I don't know. Have you heard anything compelling in the trial about, you know, that would make people think that she's potentially innocent of these crimes? I can't subjectively say what's best and what's worse. I could just tell you what happened, which is a whole sort of range of defenses. I mean, one of them included wide-ranging finger-pointing saying my deputy, Sunny Balwani was responsible, lab directors and other scientists were responsible. I mean, the most emotional testimony, and again, I don't know if this will resonate with the jury, but it was definitely striking in the courtroom, was saying that she was the victim of sexual and emotional manipulation by her part.

partner and the dep, who was also the deputy at Theranos, and that so beclouded her judgment that she didn't have the, you know, the sort of cognition of a criminal that she like couldn't sort of like think clearly at the time of the alleged crime, which was a super controversial defense, right? She basically turned this white collar criminal trial into a trial about sexual abuse. Is that going to connect with the jury or will they dismiss it? I have no idea, but it was it was definitely something that like stood out i think if you're in the courtroom i mean she was crying she was weeping on the stand did you hear anything that she said that that um you know made you think oh okay well maybe there's a point there i mean yeah i don't again i don't

i don't i don't really know how to answer that maybe there's a point there yeah well let's look we're going to go through all of her different little defenses in the next not little defenses all of her little defenses in the next segment. So why don't we pause on that? I do want to talk to you about the fact that she decided to take the stand, which was extremely surprising to me. Yeah. Because everything we hear about the legal system leads us to believe that it actually

doesn't make any sense for a defendant to go take the stand on their behalf because they might trip up and potentially turn the case that's based off of facts into a referendum on a single thing they said or their personality, and it generally doesn't work out very well. But Elizabeth Holmes did take the stand to defend herself. Why? Yeah. As you mentioned, it's dicey from a legal strategy perspective to take the stand. But, I mean, if we know anything about Elizabeth Holmes, we know that she is this headstrong person who sees herself as a visionary, who had the charisma to convince dozens of very sophisticated. investigated investors to pour nearly a billion dollars into a company that turned out to be a fraud, right?

So she believes in the power of her words and the power to be able to persuade people. So I think she probably wanted to take the stand. She wanted to address the jury directly that, hey, look, I was this young, ambitious, go-getter entrepreneur who had a dream and it fell apart, but I'm not a criminal. There's nothing that you will hear from me that will make you believe. that I knowingly and willingly did something that should send me to prison. And then the second point on why did she take the stand is her defense lawyers in legal papers talked a lot about this abuse claim, right, that she was, her ex-boyfriend, Sunny Balani

forced her to have sex with her, controlled, like, everything that she ate, the way she spoke, all of these things. You can't make that claim and then not hear directly from her, right? I mean, if you're going to introduce the abuse claim, you need to have the complainant, right, the person who's making that complaint, take the stand under oath. And she did, and, you know, she was subject to cross-examination from the government, and it was pretty intense. It was pretty awkward. I mean, it was like, if there was one thing that really jumped out at me as being like some of the most dramatic scenes that unfolded in this courtroom, it was like

the government's cross-examination of homes about the abuse stuff. Yeah. And what was, well, if you think that the reason why she took the stand is because she was this charismatic person that was able to convince all these folks to give the money away for a product that ended up not fulfilling the expectations, couldn't end up making the number of diagnostic tests that she promised. When you saw her up in the stand, did you find her convincing? What was what was it like? Did you see some of that come through? And did you watch the reactions of the jury? And did you think that there was a connection there? Yeah. So the jury, they're all wearing masks for this trials in COVID time. So that does take a key piece of information away from like, is this connecting? Is it

not connecting. You could kind of see their eyes and their body language. But, I mean, so much of, like, you know, reading someone's emotions is their face and it just sucks that that's covered up from the perspective of, like, trying to figure out what the jury's thinking and feeling. From the audience perspective, I mean, she came across as, I'm sure that she was trained and had many exercises leading up to this about all sorts of things. And she seemed very coached. She was very confident. She stuck to what her storyline is with the rise and fall of Theranos. And she came across pretty human. I mean, like, you know, when she was talking about the abuse, she was like, you know, she was dabbing her eyes with

the tissue as her eyes were welling up. She was weeping at certain point. She spoke haltingly. It didn't seem like crocodile tears. I mean, to me, it didn't seem like she was, she was putting on an act. I mean, it wasn't, she wasn't bawling her eyes out and crying in this written house esk way where it was just like, whoa, like that is a very huge emotional reaction. She was emotional, but it did actually seem pretty genuine. I think for the most part, her performance on the stand was impressive. I mean, she just came across as a very, you know, confident and fairly consistent witness, at least in terms of what she thinks her story is.

And in terms of like, did she have any flubs or what, you know, I don't remember any flubs. And she, yeah, she was just, I think, a very strong, a strong witness. And I talked to some defense lawyers who were paying attention. And they said, you know, it was probably the right move by the defense to put her on the stand. Yeah, you actually had a line in one of your stories. I think this is from one of your stories. You write, her testimony was perhaps the best opportunity for the defense to undercut the government's case. That's right.

Yeah. Say more about that. Yeah. So, you know, the government, their case basically boils down to Elizabeth Holmes's credibility. Do you believe it? Do you not? Right. They're saying that she did this and she always had had, you know, she,

intentionally was deceiving investors and patients. The best opportunity to say that's not true is to hear directly from her, right? And so she went on the stand and she said, look, I've made some mistakes. There are things looking back that I should have done differently, but I had my head sort of in the clouds, right? Like I was really focused on research and development. I was really focused on the grand vision of this company. I was focused on trying to revolutionize laboratory science and empowering people to have

more control over their health. And if there were problems with the technology, like my lab directors were more in touch with that than I was. The scientists in the labs were more in touch with that than I was. And I just, you know, I didn't ever talk to Rupert Murdoch or Betsy DeVos's people or the Walton family and the others who've poured money into the company and said things that I thought were lies, that I thought were untrue. You know, I wish I would have done a few things differently, but for the most part, you know, I think I was a good faith actor. I mean, that was her testimony. You know, hearing that from her is like a lot more powerful than hearing it from witnesses who knew her or hearing it from a bunch of lawyers, right? So, yeah, I think when the jury, you know, as the jury is deliberating this case, they're going to be thinking like, do we believe her?

Do we not believe her? I mean, so much of this turns on, like, whether she's a believable person. And I don't know. If the past is any God, she does seem to be pretty persuasive. So I guess we'll see, we'll see what the jury thinks. Did she, so she has this trademark deep voice that she uses when she wants to pitch her. product. How did her voice sound? Was it at all different than the way people described it? This is the question everyone asks and the answer is underwhelming. So prepare yourself.

And it's that she had a- Bobby, give me something good here. Come on, man. No, I'm kidding. Go ahead. No, I mean, on the voice question, it's just like she had, oops, sorry, I need to shut off my email. Can you turn off your notifications, Bobby, Jesus Christ? Yeah, yeah, yeah, yeah. On the voice question, it's just not, it's honestly just not that interesting. It's like she had a deep sounding voice, but it didn't sound remarkably deep. It didn't sound like a baritone that was sort of like fabricated. I mean, it was, yeah, it was a deep sounding voice, but it's not, I don't know what else to say about it, to be honest. I mean, like, so like people have pointed to clips like on mad money

when she's with Jim Kramer. Yep. Yeah, yeah, right when she went on after the Wall Street Journal story came out by John Kerry Rue exposing the company and she was in full like damage control mode. She had like a really deep voice. And that so like the Elizabeth Holmes we heard in the San Jose courtroom was not that low, but it was like a little bit higher than that, but still like a deep, a deep voice. It wasn't, yeah, I don't know. It wasn't, it wasn't significantly higher than what you've heard from other interviews with her. If you just like go on YouTube and watch commencement speeches or TED talks or, you know, her talking to Bill Clinton on stage, it kind of sounded like that. So why do you think people are so obsessed with the voice thing?

I mean, I had to ask it. Yeah. Why are people obsessed with the voice thing? I think it's a curious idiosyncrasy that provides a glimpse into a person that many people think is like a sociopath. It provides a glimpse into someone who's just incredibly bizarre and eccentric and, you know, wore black turtlenecks to look like her idol, Steve Jobs and supposedly changed her voice in order to concoct this false image of herself. a company that people say it was a house of cards? I don't know. I mean, if it is true that she has changed her voice, it's just like strange.

Like, it's weird. Like, why would you do that? There is supposedly research that says, you know, women with deeper voices tend to be trusted more in, you know, business circles, male-dominated business circles, whether or not she did it because of that, who knows? And again, I don't even know that she changed her voice. So I don't, I can't even say, you know, whether it's fake or real or something in the middle. I have no idea, but you're right. It has like captured the nation's imagination.

Every time I do it there in a story, there's somebody on Twitter who's like, but what did her voice sound like? Maybe she was just listening to a lot of NPR and wanted to. Could be. Yeah. Could be tones of Bobby Allen. Bobby Allen is with us here on Big Technology podcast. He is a tech reporter at NPR, stands for National Public Radio. He's talking to us here with his normal voice, which we appreciate. Why don't we we get into some of the four main arguments that Elizabeth Holmes made in her defense, and we can sort of pick those apart when we get back right after this. Hey, everyone, let me tell you about The Hustle Daily Show, a podcast filled with business,

tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers, break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So search for The Hustle Daily Show and your favorite podcast app like the one you're using right now. And we're back here in the big technology podcast with Bobby Allen and NPR tech reporter based in San Francisco. Bobby, what happened to you in San Francisco recently and did

that instill faith in the court system for you? Or did you lose some faith in the justice system in San Francisco. Yeah, I was on my Vespa and I got hit by a car when I was on my way back from hot yoga, on my way to four barrel coffee. If I died, it would have been the most San Francisco death ever. You just sounded very sympathetic and then also not sympathetic at all in one sentence. Thank you very much. I'll be taking tips after the interview.

Yeah. You feeling okay? I'm feeling fine. I broke and dislocated my shoulder. I'm all banged up on my leg, but for the most part, I'm totally fine. But yeah, the California Highway Patrol, since it happened near an on-ramp, it was under their jurisdiction. They closed the case, couldn't find the guy who hit and ran. I'm assuming it's a guy.

It was a black Mustang. Could have been a woman, sure. And, yeah, it's a bit of a bummer. I mean, I thought San Francisco would be camered up, but apparently they don't have cameras on this particular intersection. So there you go. Well, I'm sorry that happened to you. And I'm glad you're feeling better. Thanks, ma'am.

Appreciate it. Your health and safety is our number one concern here on the show. show. So speaking of health and safety, let's talk about the ways that Elizabeth Holmes might have failed to ensure the health and safety of the people that were using her products and some of the arguments that she might have made in court to say, hey, I'm innocent. That's pretty good segue. I'm going to take credit for that segue. So, okay. If you deliver a good segue and and then say it's a good segue, that I'm going to segue. Dang it.

It's like delivering a good joke of being like, wasn't that a good joke? It's like, no. If you have to say it's a good joke, it was a bad joke. Please clap. Okay, so let's get into these arguments. So first one. So this is coming. I had full disclosure, ripped these from Aaron Griffith's story.

Number one, she had been told by her colleagues that the technology worked. Is that what she said, that she had been told that the tech worked? And therefore wasn't in the wrong, but I do remember there being, at least reading John Carrier's book, Bad Blood, there were pretty elaborate moves to sort of conceal the fact that the Edison wasn't working in demos and stuff like that. So what do you make of that? Yeah, exactly. So she was telling investors that, you know, this, the Edison device, which when you see pictures of it, it kind of looks like a mini, like, color printer, you know, that. her idea was that these would be in, you know, homes everywhere. And we could just, you know, little pinprick of blood do hundreds of tests.

And it could even predict, you know, we're pre-diabetic before we're pre-diabetic and give us a course of care. And it would be amazing and fast and cheap. And yeah, totally revolutionized health care. But she was saying that her Edison could do hundreds of tests. She even told Roger Parloff and that now infamous Fortune cover story that one day will be able to do more than a thousand. in when, you know, in fact, Erica Chung, who used to work a theranos and became a whistleblower said it could do maximum of a dozen tests, right? So the government saying, yeah, this thing could do 12 and she was saying hundreds. And as she was telling investors, hundreds, she like

brought in these commercial lab testing devices. She tweaked them a little bit, didn't tell anyone and then said, oh, that's a trade secret. That's why we're not telling anyone. And kind of like hid that from everyone, very, very secretive moves. But that is part of her defense that she didn't exactly know what was going on with the technology, that she wasn't as close to it and it's particular as her lab directors. Do you find that believable? I mean, it's sort of, to me, that that seems super far-fetched. Mm-hmm. Yeah. Do I find that believable? Alex, you and I are in different positions. I can't tell you what is believable or not believable. That is for the men and women of the jury to decide. I know you're going to roll your eyes at this, but I can't tell you what's believable.

That's not my job. I am the bearer of facts, Alex Cantrellwitz. I am not one who makes determinations on the facts. I know you hate me. I don't hate you. I get it, but it's kind of weak. Okay. Second one is that the broader narrative was more complicated than the prosecution made it seem. That's right. Yeah. You talked about how it was a little messy. Yeah. No, that's been a theme that the defense has been harping on. that basically the government is showing the jury a dirty lens, right? That they have this like super clean cut story of Elizabeth Holmes being this menacing fraudster who was out to do Cooper Murdoch of, you know, millions of dollars and that she always wanted to get away with it. And the defense says at one point yesterday, which I thought was really striking, or I said yesterday, sorry, I know we're recording on a Friday.

But during closing arguments, her defense lawyer had. a list of all of the board of directors of Theranos, like the former CEO of Wells Fargo, a former director of the CDC, you know, Henry Kissinger, and said, okay, if you wanted to start a company that was basically going to be a shell company that was going to run a criminal enterprise, would you put these people on your board? Because I sure wouldn't. It's a good point. Right? And the defense also said, look, we have like, you know, three patients who testified about faulty results.

there are thousands and thousands of patients you haven't heard of. So the government is focusing in on tiny little pixels and this very broad picture. And if you really sort of pan out and get the whole picture, it's not a picture of fraud. It's a picture of, you know, a complicated company that made some bad decisions and ultimately unraveled. But she's not a fraudster. That's what that's what she's saying. That is interesting. I mean, the argument that she, you would, you wouldn't have all.

these legendary folks on the board if you're trying to commit a fraud is an interesting one. On the other hand, at a certain point, it's like a lot of frauds aren't straightforward frauds from the beginning. They start out with good intentions. And the problem is like, you know, it's not the crime. It's the cover up often that gets people. And when you get going and you have to have a certain level of ability to say, hey, this isn't working. When you're run a company, when you run a startup, when people trust you with hundreds of millions of dollars. Yeah.

And so to me, that's kind of a weak defense that, oh, these people are on the board. Actually, you know, you probably started out in a good place. And you had the people on board to do it, as many companies do. But what the problem actually happened was when it was very clear that this thing wasn't living up to its billing. And then the lie perpetuated in order to keep it going. Right. And I mean, what the government would say in response to that is,

You know, what we learned is that the investors, the board members, every, like, luminary attach to this company did not do due diligence. Like, they let their questions stop at a certain point. Like, nobody who invested money, like, looked at the Edison and opened it up and understood how it actually worked. For sure. Yeah, exactly. And so, like, you know, once you know you have that going, then you can sort of take some

more liberties that you wouldn't if you had some more oversight. And hence, you know, I think this argument is kind of weak. let's go to so we talked about she was told the technology worked you mentioned a little bit like one of the arguments is that she was trying to protect trade secrets come on you know if a trade secret is running a test on somebody else's machine then you need better secrets no that's right john carrieu has this amazing line and he's like yeah elizabeth holmes multi multi billion dollar innovation was tweaking somebody else's technology and doing it poorly yeah exactly so the trade secret thing doesn't really bear muster, that the narrative is more complicated,

the board and all that stuff. Well, yeah, of course it's going to be a little bit more complicated, but it doesn't seem that much more complicated that it seems like grounds for acquittal. And then we go to the, I would say probably the most surprising and intriguing storyline of it all was that she was controlled. She's arguing that she was controlled by her boyfriend and business partner, uh, Ramesh or Sonny Balwani. Yeah. And, and, you know, I think you referenced it a little bit in the, in the first segment, but the, um, the testimony on this was like, probably the apex of, of the case. So can you explain a little bit more about like, about what's going on there? We had never heard this before, I believe, until this trial. So what's the argument there exactly?

Yeah, that's right. Yeah, that's right. So Sunny Balwani. is this dude who made a ton of money during the dot-com boom in Silicon Valley's 19 years older than Elizabeth Holmes. They struck up a friendship that then evolved into a romantic partnership then became the number two at Theranos. And even during the rise of Theranos,

she kept their relationship surreptitious. She like never revealed it to investors or anyone close to the company despite them living together, right? But yeah, it came out during the trial And she went on the stand and testified to the jury that he manipulated her, controlled her, he would rape her, he basically, you know, that he was this mastermind and she was the puppet and that she never told anyone about this abuse, but that the abuse did get in the way of her judgment and affected her in ways that she said she couldn't fully calculate, right? And what the government would say is, and they said during their closing argument, is like, look at members of the jury saying that Elizabeth Holmes is guilty of fraud, is not saying that you reject these claims of abuse, right? You can't hold two things to be true at once, that Elizabeth Holmes is a fraudster and that her claims against her former intimate partner are true.

It doesn't have to be precluding, right? But it did throw a wrench in the whole thing because it turned into this situation where the government went up on the stand. and brought all these text messages in, like when one of them referred to the other as Tiger, the other one called, I mean, Sonny then called Elizabeth Tegress, you know,

one called the other, my nirvana. I mean, it was all sorts of like, really like clowing, like, uh, lovey-dovey,

text messages between them, as a way of saying like, oh, you're saying you're being abused. It sure sounds like you're in a loving relationship. Like how abusive was this? And I will say, Alex,

like that's spectacle. Yeah. Like the spectacle of, like a male prosecutor grilling a young woman about her story of abuse in the Me Too era, I thought that was like a little tone deaf. And you could tell that the jury was being kind of uncomfortable. Yeah. No, totally. I mean, the legal experts I talked to said this could end up backfiring on them. But then the flip side is, well, look, if you're a government prosecutor and you're trying to try this white collar crime of wire fraud and then the defense is throwing in

sexual abuse, you can't leave it unaddressed. Like, you, you can't just leave that out there because it's going to be like conceding it by implication, right? You've got to say something in response, but their response was to like question whether or not it happened at all. And some people thought that was like a really bad look. Seems like it's in poor taste. Yeah, you had a really interesting line in your story where you, you quote, I think, an expert that said, I love with our claims of mental or physical abuse are not well received as excuses, especially when the defendant has been living the high life for years, which would apply to Elizabeth Holmes.

So it's like, you know, on one hand, she like basically did this who might have been Hail Mary or ill-advised to bring this story in at the, again, the 11th hour. On the other hand, maybe it worked where the government sort of overplayed its hand and, you know, turned a, you know, this thing that could have ended up hurting Holmes into something that might have helped her. Yeah. That's the dynamics at play. No, absolutely.

Absolutely. And like really big picture, Alex, like I think the defense's goal is to just make this look more complicated. Like all you need to get a hung jury is to get one person to be like, oh, you know what? I kind of believe that she was abused and that she was raped and that that really messed her up. Maybe I know someone in my life who was manipulated by a former partner. We can't convict her because of that. If they get just one person to be really hung up on that, they're not going to all agree. You need a unanimous verdict. And that's kind of a win. She walks out of the courtroom. and isn't found guilty, right? And there's so much like that in the defense where they're just like introducing all of these points that hopefully will give at least one juror some hesitation. And that's, yeah, that's kind of their strategy here to just make the Theranos story look a lot messier than you and I knew it to be before this trial.

Like if you watch a documentary, if you read the Carriereau book, you have one idea of Theranos, but the defense is like, ah, the devil's in the details, right? And you really look at the details, it is just a super nuanced picture. Right.

I mean, it is interesting because there's this media portrayal, which I think John Kerry did a pretty good job telling the story and broke the news and that's why we're here today. But on the other hand, like any deep and like legal discussion of this is going to inherently be more nuanced. That's right. Perhaps like the bombshell media coverage might have actually also played to Elizabeth Holmes's favor. Oh, completely. Because the jury just can be like, hey, that's not what I heard about this, you know, reading or reading this book or listening to this podcast or all this stuff. Yeah, no, completely.

I mean, on the cover of Fortune magazine, countless glowing stories about her appearing on TV constantly. And, you know, the backing of former cabinet members, you know, the backing of like the former CEO of Wells Fargo. Like I said, I mean, it's not like she had a bunch of schmows on the street supporting her technology. I mean, she surrounded herself with some of the most trusted and credible people she could find, right? So, yeah, but the media coverage of her, there was a really good piece in the Washington Post that was looking at the media's role in the rise of Theranos and just how so many journalists, I mean, not just a Fortune magazine story, so many journalists were sort of credulous. I mean, it's such a, I don't want to say seductive. doesn't feel like the right word, but it is just like such a great story. In the male dominated tech world, this startup founder who drops out of Stanford at age 19, right,

has this like fear of needles and then creates this technology that is trying to revolutionize the way you and I, you know, get blood tests. We no longer need needles. I mean, it's, and she like looks, she has this look that is like, you know, pattern after Steve Jobs. I mean, the whole thing is just like a little too perfect as a narrative arc. And as journalist, Alex, I mean, Just saying it out loud. Like, it's a great story, is it not? So I could imagine, like, being a tech reporter during that time and being like, yeah, I want to profile Elizabeth Holmes.

That's a huge story. It's a great story. And if I got that assignment, would I go down the Theranos headquarters and demand to, like, get some screwdrivers out and take apart the Edison and really understand the technology? Absolutely not. But you might speak to, okay, but you might speak to people, though, that's that, you know, clients and stuff like that. Yeah, but even journalists who did that wrote stories that were.

were like super puff pieces. I mean, the New Yorker did like a 6,000 word piece on Theranos and there was like four critical graphs, right? Yeah. Well, listen, I think that like, you know, it's, it's interesting they got taken by Elizabeth Holmes. Do I think you or I would be taken by her? I'd like to think, no. I'm serious. I think there's a lot of bad journalism out there. And I don't think that like I'm going to consign myself to be part of it. We do need a, you know, a degree of skepticism and I think the practice of like writing hegiographies, if you don't even know what's going on in the product, is somewhat shameful. And no, I wouldn't participate in that. Yeah, no, I'm not trying to apologize for it. And I would hope that I would be better than it as

well. But just saying, Bobby, I know you. You'd be better than that. Thanks, Alex. But the nature. Yeah, the nature of deadline-driven daily journalism is such that you can't turn every story into an investigation. Of course. But I'm talking about the 6,000 word New Yorker story. That's the one you brought up. Right. The cover story on Fortune, that's when you brought up. Yeah. Yeah, you're not scrambling to file that by 5 p.m. If you're writing like a short story on it, fine.

Well, that's right. If you spend 6,000 words on the New York who are in a company that's a fraud and you don't notice that, shame on you. Yeah. Actually, let me share this anecdote really quick. Alex, there was a stringer who was doing a story for NPR on Theranos years and years ago. And was at, I think, a Walgreens with Elizabeth Holmes and was like asking to like interview a patient and actually see someone get a pinprick of blood because so many patients were getting blood drawn from needles. And the reporter was like, wait, I thought the whole innovation was like, you don't need needles.

Like, what's going on here? And she kept pushing Elizabeth Holmes for like to be set up with a patient who was getting the pinprick of blood. And then suddenly a fire alarm goes off out of nowhere. And everyone's evacuated. And she was like, that was weird. And ended up not doing the story. And it was like, good on her. One of her proudest journalistic moments to be like, something does not pass the sniff test here.

Right. Exactly. Yeah, I don't know. Shouldn't it shouldn't be that hard. You've covered a lot of cases. How does this one compare to the other cases you've covered? Yeah, this one is excruciatingly long. I think any reporter covering Theranos is like, can it please be over? I mean, three and a half months of testimony and the fact that the reporter's got to get up at like two or three in the morning to start waiting in line. It's unbelievably long. For the most part, it's dry, right? I mean, the government subpoenaed thousands and thousands. thousands and thousands of documents and emails and text messages and most of the witnesses are going through very technical details about assays, which is a word I didn't know before the Theranos trial, which is a fancy word for a blood test, you know, going through exactly like, you know, the 2.0 of the technology, 3.0 of the technology. I mean, it's just there is just so many, so many technical details that would make, I mean, you could even see members of the jury sort of like having trouble sticking with it at times. I've seen a few people like dozing off in the audience. I mean, for the most part, this. This trial has not been fireworks. I think Elizabeth Holmes taking the stand had the entire courtroom enrapped, and everyone was really, really, really paying attention to her and what she was saying. But for the most part, it's been long and dry. Yeah.

Okay. This is journalist's penance for taking this story at face value. Now you have to wake up at five. You're repenting for the sins. Maybe not of NPR. Clearly, that you had a colleague that didn't buy it. Of your predecessors. Okay.

Let's take one more break and then come back and speak to Bobby about what happened. next and what this means for Silicon Valley more broadly. So we'll do that after the break. We'll be back right after this on Big Technology Podcast, and we'll see you in just a minute. And we're back here on Big Technology Podcast with Bobby Allen. He's a tech reporter at NPR based in San Francisco. He's been waking up so early to go to the Theranos trials just so he can speak with us about what's going to happen next. Can I be a special correspondent for Big Technology, Alex?

I'm not up to that level yet. You're in. Joining us now is Big Technology Special Course, Sun. Gabby Allen. We will speak to you in Big Technology Voice. Today in San Jose, something amazing happened. So you mocking NPR, like that really shows me you don't listen to NPR. Because no, very few people sound like that these days.

But I don't listen to it. You know, I do think that, sorry, I hope this doesn't like end up in like your PR team's inbox or something like that. For the record, I like NPR. I like Bobby. But yeah, no, I'm glad that you guys have moved beyond that. But no, every time I do listen, like, the echo will play NPR when you ask it for, like, what's going on. And it does still sound like that. Maybe you have your connected home device people on that stuff.

I'll look into it. I'll see what we can do to make everyone sound like you and not like the voice of God, Alex. I'll get on that. You know, I think I've been owned. Um, so, so how is before we get into what's going to happen next, um, how are, uh, how is COVID going in in San Francisco? It seems like everybody in New York has COVID. Do you have COVID? Bobby, what's the story? I don't have COVID. No, I'm getting boosted this weekend. Nice. The mask, the mask mandate, mandatory for all things indoors just came down a couple days ago. Yeah. Um, it's, I mean, you know, knock, knock on wood. It seems to be not as bad as New York right now, but, but, but I guess time will tell. But yeah, for the most part, I think San Francisco's approach has, you know, been seen as kind of impressive, right?

I mean, obviously we're not, it's not like we're, you know, the best in the world or something. We're not like Portugal, but San Francisco's been taking it very seriously. And every bar and restaurant I go to has someone outside, you know, comparing your state issued ID to your vaccination card. And I've been in other cities where it has not been that diligent. So I've been pretty impressed with how even like, you know, mom and pop. stores and dive bars are like taking the mandates like really seriously i don't know if you found that too but it's like for sure it's the same in new york now i mean i'm in the middle of waiting for uh of test results uh because i went to a concert uh earlier this week LCD sound system and hopefully

uh i didn't contract the virus um so we'll find out soon if if i end up on the show sounding terrible next week um we'll just say it's COVID okay enough about if you got if if you did get COVID the the blood is on James Murphy's hands. I mean, we know that. We do. We have to blame them. Yeah, luckily, we're not going to do the test in the Theranos device. Exactly.

I won't compliment the segue there. So what happens next, Bobby? So the jury is deliberating as we speak. Yes. When can we expect the result? And what do you expect to happen? So the jury can return a verdict. an hour from now, two weeks from now, there's really no way of predicting. Based on past trials

I've covered, the more complicated the case, the longer it takes. I mean, think about the last time like you and your friends went to a restaurant, right? And how the group message went on and on and on just to decide where to like get dinner. Like try to get 12 people to unanimously agree on 11 very complicated counts of wire fraud, right? It's not something that you can do swiftly. So I think it's going to take some real time. I'm not really sure what's going to happen. I genuinely, like putting my, my journalist hat aside and just talking to you one-on-one Alex, I literally have no idea.

I could see it going anywhere. I mean, I could see a guilty verdict. I could see an acquittal. I can see a hung jury. Like I said earlier, I could see maybe one or two of them really fixating on a detail or two from the defense, whether it be abuse or something else and saying, I just don't think the burden of proof was clear. I mean, during closing arguments, the defense spent a lot of time, which is typical in this kind of trial, explaining just how high the burden of proof is in a criminal trial beyond a reasonable doubt.

So if you just have the tiniest iota of doubt that any of the charges happened, you can't convict. I mean, he went over at Kevin Downey, one of the defense attorneys. Yeah, went over it in like really, really specific detail about just how high evidence. it's a staircase of doubt can you describe that yeah exactly yeah what's that yeah i mean he was he was just drawing an analogy to say like in so other in so many other parts of law enforcement um and even the court system there are different burdens of proof like usually to like stop and frisk someone you need to have the belief that someone committed a crime or is about to commit a crime right a reasonable suspicion they call it that like something happened and like a civil trial

It's like the preponderance of evidence. So it's more likely than not that this thing happened. But yeah, criminal trials beyond any reasonable doubt, this thing happened. So it's, yeah, it is an extremely high bar. And that's part of the reason, Alex, why you see so few people in Silicon Valley charged with fraud, right? I mean, we work and, I mean, executives of Jewel. There's a lot of startups where people have said these people committed fraud or did things that were exaggerating the product or, you know, things that like veered into criminal territory.

And there may have been investigations launched, but we have yet to see charges, right? And obviously, every single one of these startups and the executives involved are very like fact-specific cases. But part of the story of not seeing charges in Silicon Valley very often is just how high the bar is. It's convincing a jury beyond a reasonable doubt is a really, really, really hard thing. And the government thinks, do I want to use lots of taxpayer money to bring on this case? that's going to end in a mistrial or acquittal. You don't. You want to be confident going in. And because of that high burden, yeah, you just don't see a lot of cases out of the Northern

District of California. That's where the U.S. Attorney's Office is out here that that polices Silicon Valley or is supposed to police Silicon Valley, right? Yeah, there's a staircase of, steps on a staircase of reasonable doubt. This is from a tweet that Aaron Griffith posted last week. There's no evidence, scintilla, reasonable suspicion, probable cause, preponderance, preponderance of evidence, clear and convincing, reasonable doubt, and then beyond a reasonable doubt. So you really, really need to be sure in order to convict somebody. Exactly.

And that's why it seems likely that this is going to be, as you mentioned, or as you've sort of talked about over the course of this interview, a hung jury seems likely. It's possible. It's definitely possible. I mean, another way to frame this is not to look at the burden of proof because that's how people like you and I like thinking about it. And it's like very irrational, logical way. And instead thinking about it from an emotional valiance, like, thinking about the way that the emotional testimony is going to, like, stick with the jurors, right? Because emotional testimony, seeing someone cry on the stand, that affects you. And juries can be fickle, juries can be unpredictable. Juries don't always, you know, make decisions that everyone agrees

are rational decisions. So you just have to see. Maybe the abuse stuff is really going to resonate and really going to end up, you know, making them all believe that she was not guilty. I don't know. You know, maybe, maybe the jury will get in there and say, you know, I've been in here for nearly four months, but the most convincing thing is the thing I last heard. And who gets the last word in a criminal trial? Federal prosecutors. So they are going to have the last word. They're going to go into, the jury will go into the deliberation room, start talking. And you probably know people, Alex, who like, they're sort of persuaded by the last argument that they are. If these 12 people are like that, then they're going to believe the government.

I mean, it's just there's so many different ways to sort of like analytically slice and dice how the jury's going to render a verdict and what facts are going to stick out, what facts will not stick out. And it's, it's challenging. It's just really, really hard to know what those conversations will look like. But for people like interested in a Theranos trial, like there's the verdict or lack of verdict. But then what I think is actually more revealing as a court's reporter is when journalists track down the jurors and have. interviews about what was that like? Did people walk out? Oh, completely.

Yeah. That's when you glean real insight and what worked and what did it. I mean, people like you and I can sit around and speculate all day. But having a few jurors sit down and have on the record conversations about what those conversations actually look like. I mean, that is fascinating. I think that's way more fascinating than the verdict, don't you? I mean, like how it was reached is way more fascinating than it happened, right?

For sure. That's a great story. And then if she's convicted, she goes to jail. So if she's convicted, the judge will set a sentencing date and the prosecutors will say, we want her to be put away for this number of years. And the defense will probably say, we think she should get probation. The judge can split the difference or he can go on the higher end of the prosecutor's recommendation or the lower end.

It's a big, complicated, nuanced sort of calculation. But she could go to prison. Yeah, the statutory maximum is 20. years in federal prison. It's very, very, very unlikely that she would ever get that. Martin Screlly was convicted of wire fraud, and I think, and you're going to have to fact check me on this, I think he got seven years, didn't he? Obviously, different cases, but it's another sort of, what do you want to, what do you want to, how do you want to describe Martin Screlly? But another, another high profile fraud case. And he got seven. So, yeah, the government's

definitely going to ask for seven years for Mark. Yeah. There you go. He's, he's, he's, he's, They're definitely going to ask for some prison time how much we don't know. Another thing we haven't talked about, Alex, is the fact that she's a new mother, which didn't come up during closings, and I thought it would. But, you know, there's a nursing room in the courtroom so that Elizabeth Holmes can nurse for her newborn baby, right? I don't know that the, I think the jury may know that she's a mother. It wasn't a focus of the trial, but definitely during sentencing, if she is convicted,

you can expect the defense to say you really want to put this new mother behind bars, right? And there's even very cynical people who think that she had a kid specifically timed to her criminal trial as a way of drumming up sympathy. I think that's a really cynical take. But there are people who know Elizabeth Holmes very well who say this was part of her attempt to get out of this whole thing. Wow. Yeah. Yeah. That would be next level.

So before we leave, let's talk a little bit about the future. if she is convicted, how does it change things for Silicon Valley, if at all? Because there's this line of thinking that Silicon Valley typically likes to promise more than it actually has to offer, these techs, you know, startup tech companies. And if Theranos, which promised more than had to offer, is found, and Elizabeth Holmes, you know, is found to be guilty of doing that and committing wire fraud, then, you know, you could end up seeing more cases like this and that could have a chilling effect on Silicon Valley. I personally think that that's ridiculous.

This is a unique case. And, you know, we already know that a lot of the investors weren't even pure Silicon Valley investors as it was. That's right. So it seems to me that the argument that this could potentially like chill startup investing or startup creation is a little bit ludicrous. But I'm curious what you think. I think it's also ridiculous. I think to say this is a referendum on the valley as, you know, some reporters. really like emphasizing that it is.

I just don't know what the proof is for that, right? I mean, most of the, like you said, the largest checks came from outside of the valley, like the Rupert Murdox of the world. Yes, she had some backing, you know, from Tim Draper and others. Pitch book did a funny analysis of where are the Theranos investors now that the company imploded. And Tim Draper, in the wake of Theranos falling apart, actually doubled down on his medical device investments, which is that intuitive or counterintuitive? I don't know, but it's just a fact. But yeah, I think thereinos is, what's the Latin phrase? It's a sui generis sort of situation.

It's just like such a specific set of facts, such a specific CEO at the center of it. Yeah, startups are always making, you know, huge world-changing promises about their technology, but very few are doing it in the healthcare space, very few are doing it with, you know, the lives and the, you know, the health of patients on the line, right? Like one of Elizabeth Holmes' early mentors was Larry Ellison, right, who doesn't have the best track record if you, if you look at some, you know, the things that he promoted early on in his career, vaporware-esque products, right? But he would tell Elizabeth Holmes, you know, early on in a startup, the engineers are always saying, we can't get this update out to customers by the date you want to be out and just ignore that and push them

and push them and push them. And I think Elizabeth Holmes took that advice and applied it to Theranos. But look, like laboratory science is a slow and plotting type of research that, you know, it's not like you can get 50 more coders in a room and do a coding marathon to get a software update out to people faster than expected. Science doesn't exactly work that way. Right. But I think investors, regardless of what the verdict is, yeah, I agree with you, Alex. I don't think it's going to have a chilling effect on future investments. I mean, Tim Draper has said on the record, like, and most investors say on the record, right? That like we expect some of our dollars to be lost. I mean, that's why it's called venture capital, right? It's like you're taking a big risk by placing your money on a dream, on an idea. If it doesn't come to fruition, that's part of the gamble, right? So yeah, I think I think it's a little overblown to try to. to extrapolate too much from, from Theranos. But that's just me. What do I know?

I don't know. It seems like you know a lot. You've covered a lot of these type of cases. You're a tech reporter for NPR in San Francisco. I trust what you have to say. Bobby Allen is a tech reporter for NPR based in San Francisco. His Twitter handle is Bobby Allen, B-O-B-B-B-B-Y-A-L-L-Y-N. Give him a follow there. You could also follow his work on NPR.

And Bobby, you want to say thank you for coming by. Appreciate it. Thanks, Alex. This was really fun. Thanks for having. It was a blast. Hopefully, they're still deliberating on Wednesday when this publishes. Otherwise, we'll have to re-record.

Okay. And that will be just as fun. Okay. See you later. Yes, it will. Thank you. Thank you, everybody for listening. Thank you, Nate Guatany for editing and turning this baby around.

Thank you to Red Circle for hosting and selling the ads. Appreciate you guys. Thank you to Bobby, again, for joining. and thanks to all of you, the listeners. If you are a new or recent listener and haven't rated us yet, I would love it if you could go to your app of choice, probably Apple or Spotify, if it has a rating system and tap a five-star rating, that would be much appreciated.

And also, I guess, even if you're a recurring listener and you haven't done that yet, we appreciate that. And if you're a new listener and you want to subscribe, it would be great to have you on board. We do these every Wednesday stories with tech, insiders and outside agitators like Bobby, and we hope to see you again for the next one of these. So thanks again. We'll be back next week with the year-end wrap-up. Oh, my God, 2021 is almost done. And our guest is going to be Casey Newton of the platformer newsletter.

We always have a good time when Casey comes through, and next week will be no exception. And so we hope to see you that. Until then, everybody, have a great week, and I'll see you next time. Thank you.