‘Sociopathic’ CEO’s comeback plan
WHEN Elizabeth Holmes was a young child a family friend asked her what she wanted to be when she grew up.
"A billionaire," came the response.
When the family friend asked, "Don't you want to be the president?"
She replied, "No, the president will want to marry me because I'll have so much money."
It was this intense drive that led her to drop out of Stanford at the age of 19 and start a biotechnology company that promised to revolutionise medicine with a pinprick blood test that could diagnose a whole range of diseases.
We now know it was too good to be true and the Silicon Valley "unicorn" of Theranos that was once valued at nearly $US10 billion was nothing more than a house of cards built on secrecy, lies and intimidation.
The latest blow to Ms Holmes came earlier today Saturday when federal prosecutors in the US hit her with criminal fraud charges for allegedly defrauding investors, doctors, and the public as the head of the once-heralded blood-testing startup.
And despite the fact the disgraced CEO, now 34, has paid half a million dollars in fines to the Securities and Exchange Commission and is still facing an FBI investigation and the prospect of going to jail, it is that same intense drive that could see her make a comeback.
Because as unbelievable as it sounds, that's reportedly what she is gunning for.
It took the better part of a decade for the fraud perpetrated by Theranos to be uncovered, in large part because Ms Holmes was able to cultivate relationships with some of the world's most powerful, influential and wealthy people.
Along with the bold vision, this was why investors - including Larry Ellison who is one of the richest people in the world - handed over a total of $US700 million to her for a product that never really worked.
She suckered in former US President Barack Obama, his Vice President Joe Biden and other top Democrats and Republicans.
She planted a string of high ranking United States military officials and political powerbrokers on the Theranos board including Henry Kissinger, George Shultz, Donald Trump's now Secretary of Defence, General Jim Mattis and Bill Clinton's former Secretary of Defence, William Perry.
Sure it was weird that none of them had medical expertise, but who is going to argue with those guys when they went to bat for her?
"She has probably one of the most mature and well-honed sense of ethics - personal ethics, managerial ethics, business ethics, medical ethics that I've ever hear articulated," General Mattis once told Fortune journalist Roger Parloff in a quote that didn't make it into the eventual article.
But that extraordinarily misguided quote did make it to John Carreyrou's new book about the Theranos saga. The investigative reporter from the Wall Street Journal first broke the story of the company's deceit back in October 2015 and endured a long battle with Ms Holmes and her lawyers to expose Theranos' fraudulent claims.
Titled Bad Blood: Secrets and Lies in a Silicon Valley Startup, the book described by Forbes this week as "simply one of the best books about a start-up ever," is a gripping account of the lengths Ms Holmes went to conceal her company's secrets.
For the young Steve Jobs wannabe, it was a desperate race for her researchers and engineers to catch up to the tall tales she had spun, something that ultimately proved to be an impossible task.
In the meantime, self promotion, obfuscation and deception were the order of the day as she sought to convince corporate partners of her company's capabilities and elude regulators.
At one point in the book, a source from regulatory body the Food and Drug Administration told Carreyrou that Ms Holmes was so politically connected to the Obama administration, they feared it would be hard for the FDA to take action as the company tried to skirt regulations.
After detailing how Ms Holmes spoke at a Hillary Clinton presidential race fundraiser, Carreyrou wrote: "With the (2016 presidential) election eight months away and Clinton considered the frontrunner, it was a reminder of how politically connected Holmes was. Enough to make her regulatory problems go away? Anything seemed possible."
'I DON'T NECESSARILY THINK IT WAS SEXUAL'
Speaking to fellow journalist and author Nick Bilton on a Vanity Fair podcast this week to promote his new book, John Carreyrou spoke of how she was able to seduce powerful men to keep the charade going.
"This is sort of a controversial topic now amid the MeToo movement but it's undeniable that her marks, again and again, were older men," he said.
"She wowed them. I don't necessarily think that it was a sexual thing by any means … I think it was a combination of her intelligence, a combination of her charisma, her bold vision, her energy, all of that in one package."
At the height of the company's rise she was considered to be worth about $US5 billion, making her Silicon Valley's youngest self-made female billionaire. It was a story everyone wanted to believe in.
Perhaps the most incredible thing about her downfall, is her denial of it. She has never admitted wrongdoing or apologised to the patients whose health she risked. And according to Carreyrou, astonishingly she is cooking up new business plans.
"She is now telling people she is going to start a new company," he said.
Part of her settlement with the SEC included a 10-year ban from serving as director or officer at any public company but that hardly matters. Besides, Theranos never had any intention to go public.
Carreyrou says Ms Holmes is once again going to investors with cap in hand for a mysterious new venture. Understandably, the revelation was met with disbelief.
Speaking on the podcast, Carreyrou answered a question he leaves dangling at the end of his book.
"At the end of my book, I say that a sociopath is described as someone with no conscience. I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying," he said.
"I believe this is a woman who started telling small lies soon after she dropped out of Stanford, when she founded her company, and the lies became bigger and bigger."
Ms Holmes never granted Carreyrou an interview and has never really faced the truth.
"She has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered," he said, saying she sees herself as a martyr - Silicon Valley's Joan of Arc.
"One person in particular, who left the company recently, says that she has a deeply ingrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted."
Ms Holmes and her former Chief Operating Officer Ramesh Balwani, are charged with two counts conspiracy to commit wire fraud and nine counts of wire fraud, the U.S. Attorney's Office for the Northern District of California said late Friday. If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of $3.69 million each.