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The trial

Elizabeth_Holmes_at_TechCrunch_Disrupt_on_September_8,_2014_(14996937900).jpgThe trial of Theranos founder and former CEO Elizabeth Holmes, which began jury selection this week, offers a rare opportunity to understand in depth how lawyers select from and frame the available evidence to build and present a court case. The opportunity arises because investigative reporter John Carreyrou has both the mountains of evidence he uncovered over the last seven years, and because true crime podcasts are now a thing. Most people facing the reality of the case, he observes, would have taken a plea deal. Not Holmes, or not yet.

The story of Theranos is well-known: Holmes dropped out of studying chemical engineering at Stanford at 19 and used her tuition money as seed funding to pursue the idea of developing diagnostic tests based on much smaller amounts of blood than was currently possible - a finger stick rather than a venous blood draw and many tests conducted at once on those few drops. Expert medical professors told her it was impossible. She persisted, nonetheless.

Holmes's path through medicine and business seemed charmed. She populated the Theranos board with famous names: Henry Kissinger and former secretary of state George Shultz (who responded angrily when his Theranos employee grandson tried to warn him). She raised hundreds of millions of dollars from the Walmart family ($150 million), Rupert Murdoch ($125 million), Trump administration education secretary Betsy DeVos ($100 million), and the Cox family ($100 million). Then-boyfriend Sunny Balwani joined as chief operating officer. Theranos won contracts with Walgreen's and Safeway, both anxious about remaining competitive. By 2014 she was everywhere on TV shows and magazine covers wearing a Steve Jobs-like all-black outfit of turtleneck and trousers, famous as the world's youngest self-made female billionaire.

And then, in 2015, Wall Street Journal reporter John Carreyrou began blowing it all up with a series of investigative articles that eventually underpinned his 2018 book, Bad Blood: Secrets and Lies in a Silicon Valley Startup. The Securities and Exchange Commission charged Holmes and Theranos with fraud; Holmes settled the case by paying $500,000, giving up her voting control over the company and surrendering her 18.9 million shares. She was barred from serving as an officer or director of a public company for ten years, and she and Balwani were indicted on criminal fraud charges. This is the trial that began this week; Balwani will be tried later.

Twitter reports suggest that it hasn't been easy to find jurors in Santa Clara County, California, where the trial is taking place, who haven't encountered at least some of the extensive media coverage, read Carreyrou's book, or seen Alex Gibney's HBO documentary The Inventor: Out for Blood in Silicon Valley. Holmes remains a media magnet as a prospective felon.

With the case approaching, Carreyrou has released the first three of a planned dozen episodes of Bad Blood: The Final Chapter. These cover, in order: Holmes's trial strategy as revealed by the papers her lawyers have filed; Theranos' foray into testing for Ebola and Zika during those epidemics; and Holmes' relationship with Balwani. There is enough new material to make the podcast worth your time (though it's difficult not to wince when Carreyrou damages his credibility by delivering the requisite podcast ads for dubious health drinks and hair loss remedies, and endorses meal kits).

What makes this stand out is the near real-time critique of the case's construction. When Carreyrou thinks, for example, that the "Svengali defense" Holmes's lawyers have filed - Holmes apparently intends to claim that Balwani abuse and manipulation robbed her of personal choice - is a long shot, it's because he's seen extensive text messages between Holmes and Balwani (a selection are read out by actors). More speculative are his comments on the effect on the jury of Holmes's new persona: the Steve Jobs costume and stylized hair and makeup are replaced by a more natural look as a married woman and new mother. Carreyrou revisits Holmes and Balwani's relationship in more detail in the third episode.

The second episode offers a horrifying inside look at medical malfeasance. As explained here by microbiologist and former Theranos lab worker Lina Castro, neither Holmes nor Balwani understood the safety protocols necessary for handling infectious and lethal pathogens. Castro and Aaron Richardson, the scientist who led the effort to develop a test for Ebola, conclude that even if Theranos' "miniLab" testing device had worked, the company's culture was too dysfunctional to be able to create a successful Ebola test.

At the Washington Post, Rachel Lurman argues that the case puts Silicon Valley's culture on trial. Others argue that Theranos isn't *really* Silicon Valley at all, since neither its board nor its list of investors included Silicon Valley names. In fact, Theranos was a PR-friendly Silicon Valley copy: the eccentric but unvarying clothing (see also: Zuckerberg's hoodie), the emotive origin story (the beloved uncle who died too soon), and the enthusiastic promotion of vaporware until a real product can be demoed. In the days of pure software, bullshit could sort of work. But not in the medical context, where careful validation and clinical testing are essential, and it won't work in the future of hybrid cyber-physical systems, where safety and real world function matter.

"First they call you crazy, then they fight you, and then you change the world," Holmes frequently said in defending her company against Carreyrou's reporting. Only if you have the facts on your side.

Illustrations: Elizabeth Holmes at TechCrunch Disrupt in 2014 (via Wikimedia.

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Stories about the border wars between cyberspace and real life are posted occasionally during the week at the net.wars Pinboard - or follow on Twitter.


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