Theranos founder Elizabeth Holmes testified tearfully Monday that former company president Sunny Balwani, her romantic partner for more than a decade, belittled her, controlled her diet, sought to keep her from her family and forced sex on her when she displeased him.
In the most emotional testimony yet at the former CEO’s trial on charges that her blood-testing start-up was based on fraud, Holmes described a relationship that began with Balwani giving her advice and ended with her questioning why she was staying with him. “He wasn’t who I thought he was,” she testified.
The stunning allegations brought into focus a key element in Holmes’ defense against damning evidence, including her appropriation of pharmaceutical giants’ logos for Theranos reports that she sent to investors, her statements to investors about purported military use of her company’s blood-testing machines, and testimony by former employees and patients about serious accuracy problems in the testing.
Throughout her testimony, Holmes has sought to defend herself by insisting that she never sought to mislead anyone, by blaming others for problems in Theranos’ labs and by explaining that company scientists never told her about repeated issues with accuracy and reliability in patient blood test results — testimony that prosecutors will try to rebut when cross-examination begins Tuesday.
But on Monday, her fourth day on the witness stand, Holmes appeared to answer the biggest question that has hung over her trial: Would she blame Balwani, her co-accused, for alleged fraud at the Palo Alto blood-testing startup? In court filings she has accused him of abusing, controlling and coercing her in ways that would affect the issue of her guilt. Her lawyers have indicated in court filings that they plan to call to the witness stand a psychologist who specializes in relationship violence and has evaluated Holmes.
“He would get very angry with me and then he would sometimes come upstairs to our bedroom and he would force me to have sex with him when I didn’t want to,” Holmes testified at one point Monday, adding that Balwani “wanted me to know that he loved me.”
But Holmes also acknowledged Monday that Balwani had not forced her to make statements to investors or journalists nor controlled her interactions with Theranos board members or executives from companies that her firm sought to work with. Asked what impact her relationship with Balwani had on her work, she responded, “I don’t know. He impacted everything about who I was, and I don’t fully understand that.”
A lawyer for Balwani declined to comment on Holmes’ testimony or her allegations.
The trial in U.S. District Court in San Jose has attracted global attention. Holmes was 19 when she founded the now-defunct company and convinced powerful people to fund and back her vision. Her rise as a young woman in the male-dominated world of Silicon Valley technology drew admiration and fame. The company’s downfall set the stage for one of the highest-profile criminal cases in Bay Area history.
Now, she is on trial on 11 felony charges and faces up to 20 years in prison if convicted. Prosecutors allege that before Theranos went belly up in 2018, she and Balwani bilked investors — including media magnate Rupert Murdoch and the Walton family of Walmart fame — out of more than $700 million, and defrauded doctors and patients with false claims about their technology. Both Holmes and Balwani, who is to be tried separately, have denied the allegations.
On Monday, with her voice quaking, Holmes testified that she was raped when she was a student at Stanford University. When she told Balwani, whom she looked up to as a successful entrepreneur, about her trauma from the rape, “he said that I was safe now that I had met him,” she said.
But after one of Balwani’s alleged attacks in 2015, she made notes, including one that read: “Hurts so much. So so much. Can’t focus on anything except why? Why hurting myself?”
Holmes testified that she met Balwani on a trip to China when she was 18 and he was 38. “I talked to him about wanting to start a company that I tried to build in high school, and asked for his advice,” she testified. When she started at Stanford, Balwani would email her. She quit the university, she said, because she had been raped, and she “decided to leave to pour myself into building Theranos.”
But Balwani, she claimed, belittled her. “He told me that I didn’t know what I was doing in business, that my convictions were wrong, that he was astonished at my mediocrity and that if I followed my instincts I was going to fail, and I needed to kill the person who I was in order to be what he called the new Elizabeth,” she testified. Balwani told her that “even if I didn’t have the natural instinct for business, that I could be taught to overcome that through a formula for success for business … that he would teach me,” she testified.
Balwani pressed her to work seven days a week in the office, and to eat only “pure” foods that would give her energy, she claimed. Jurors were shown notes she said she had made based on Balwani’s instructions, including appropriate lunch — salad with tofu and bulgur salad — and dinner: broccoli with quinoa dressed in garlic and balsamic vinegar. Balwani would get angry when she spent time with her family because “he said it was a distraction from my business,” Holmes testified.
Ultimately, she testified, she lost faith in Balwani when federal regulators inspected the company lab in late 2015 and found deficiencies that threatened patients’ lives. Balwani ran the business side of the lab’s operations, Holmes said.
“I had gone into that inspection thinking we had one of the best labs in the world,” she testified. Holmes moved out of their shared home in 2016 and he left the company.
Downey wrapped up Holmes’ direct testimony by eliciting from her that although she had once been worth $4.5 billion on paper because she owned about half of Theranos’ stock, she never sold a share despite having numerous opportunities. “I didn’t want to,” she testified. “I believed in the company and I wanted to put everything that I had into it.”
Holmes is to face cross-examination by prosecutors starting Tuesday.
In earlier testimony Monday, the company founder sought to cut the impact of the prosecution’s key claim that she lied about use of her startup’s technology by the U.S. military.
Holmes was asked by Downey whether Theranos’ blood-testing technology was ever used for clinical care on medical-evacuation helicopters. She said no.
Jurors have heard from investors who testified that Holmes, while wooing them, claimed her technology was in use on military choppers, helping to treat soldiers in the field. A former Theranos manager testified that although the company had worked with the Pentagon to try to get its technology into battlefield use, he was not aware of it being used clinically on soldiers in war zones, or on military aircraft.
Asked Monday by Downey whether she had told anyone the devices were used on medevac helicopters, Holmes responded, “I don’t think I did.”
She also said that Theranos had not tested a device in Afghanistan. “We weren’t able to finish the work in time based on the timelines in the contract,” Holmes said.
Holmes, who founded the Palo Alto blood-testing startup at age 19 in 2003, is charged with allegedly bilking investors out of hundreds of millions of dollars and defrauding patients with false claims that the company’s machines could conduct a full range of tests using just a few drops of blood, when she knew the technology had serious accuracy problems. Balwani is to be tried next year.
Holmes also advanced her legal team’s strategy of distancing her from problems and management at the Theranos lab. She testified Monday that company scientists never told her about issues with accuracy and reliability in patient blood test results. Source: www.mercurynews.com