During his testimony Wednesday in the criminal trial of Theranos founder and former CEO Elizabeth Holmes, James Mattis, the former US Secretary of Defense and onetime board member, detailed how he lost faith in the failed blood-testing startup.
Mattis testified in a San Jose federal courtroom for nearly four hours, describing how he invested $85,000 in the startup because he believed in the promise of the company’s mission to test for a variety of conditions with just a few drops of blood. “I didn’t know what to believe about Theranos anymore,” he testified, referring to the growing scrutiny of the company’s testing capabilities.
“I couldn’t see why we were being surprised by such fundamental issues,” Mattis said during questioning by federal prosecutor John Bostic.
During Holmes’ tenure as CEO, she surrounded herself with a remarkable roster of high-profile men, including media mogul Rupert Murdoch, who was once reportedly the company’s largest investor; David Boies, a prominent attorney who was an investor, board member, and legal defense for Holmes and Theranos for a time; and Mark Zuckerberg, who was once reportedly the company’s largest investor. All of them have been listed as potential witnesses for the government.
Mattis, who was a board member of the blood-testing startup from 2013 to 2016, is the first of her well-known associates to testify, as well as the seventh overall witness.
During cross examination, Mattis testified that he personally assisted Holmes with security by recommending his former chief bodyguard in response to security concerns raised by another powerful Holmes ally, former Secretary of State George Shultz, about her growing public profile.
According to emails displayed in the courtroom, Mattis referred to Holmes as “young Elizabeth” in his early interactions with her. He described her as “sharp, articulate, and committed” in his testimony. He acknowledged that she had impressed him, but added that “having the device prove itself” was more important.
Mattis testified that he was primarily interested in the device for military use because he believed that a single, small device could perform all of the tests the company claimed it could. “I would not have been interested in it were it not,” he said. Mattis also said he joined the board because he thought Holmes’ mission was “amazing” and “a very worthwhile project” if it reduced healthcare costs.
During Mattis’ cross-examination, Holmes sat motionless in the courtroom, wearing a blue mask over her face and blinking frequently.
The government continues to build its case against Holmes, attempting to persuade jurors that she intended to deceive investors, patients, and doctors about her company’s capabilities and proprietary blood testing technology in order to defraud them.
Holmes could face up to 20 years in prison if convicted of a dozen counts of federal fraud and conspiracy. She has entered a not guilty plea.
On the other hand, the defense claims that Holmes was a young, ambitious CEO whose company failed, but that failure is not a crime.
