Elizabeth Holmes Conveys Regret When Confronted by Theranos Prosecutor
(Bloomberg) -- Elizabeth Holmes has some regrets.
Confronted with tough questions on the witness stand Tuesday, as she defends herself against criminal fraud charges, the Theranos Inc. founder admitted to errors on several occasions.
When discussing her efforts to quash a damaging Wall Street Journal story about her blood-testing startup, Holmes said, “We totally messed it up.”
Asked about how she reacted to a young lab worker who became a whistle-blower, she said, “I sure as hell wished we treated her differently and listened to her.” When it came time to talk about a report she’d doctored before it was presented to Walgreens as an “independent” evaluation of Theranos technology, she said, “I wish I’d handled this differently.”
Holmes already expressed some regrets in her earlier testimony, including about applying Pfizer Inc.’s logo to the report prepared for Walgreens, even as she denied trying to deceive anyone. But on Tuesday, in her first day of cross-examination following four days of friendly questioning by her own lawyer, contrition was the dominant theme.
At the same time, Holmes ducked certain questions about key events, saying for instance that she couldn’t remember whether she asked for Pfizer’s permission to use its logo.
She pushed back against others, saying she wasn’t trying to intimidate the Journal reporter or the whistle-blower when she enlisted the help of an opposition research firm and famed litigator David Boies to run interference. Instead, she testified, she was trying to protect her company’s trade secrets.
Over a span of more than five hours on the stand, Holmes’s responses on a wide range of topics were at times awkward and contradictory -- and even tearful.
The day before, Holmes had stunned the courtroom with emotionally charged testimony that she was raped in college and, later, sexually assaulted by the man she lived and worked with for more than a decade, ex-Theranos President Ramesh “Sunny” Balwani.
On Tuesday, as prosecutor Bob Leach sought to demonstrate that her relationship with Balwani was often loving, Holmes became visibly upset while revisiting text messages from six years ago, including when Balwani wrote: “Love you. I prayed from the bottom of my heart for you,” and Holmes responded: “My nirvana.”
Leach delicately asked Holmes: “At times you were loving, at times not?”
“I would get upset sometimes,” she testified.
The prosecutor needed to avoid “re-victimizing” Holmes in the eyes of the jury, said former U.S. Attorney Barbara McQuade, who now teaches at the University of Michigan law school.
“Her allegations about Balwani may well be true, but they do not excuse massive fraud,” McQuade said. “Cross-examination requires prosecutors to read the room. If Holmes has come across as a sympathetic figure, then an aggressive cross-examination can backfire.”
Holmes, 37, is facing as long as 20 years in prison on charges that she defrauded investors and patients by lying about the company she ran for 15 years before its collapse in 2018. Balwani was also charged, but their trials were separated, with his starting next year. He has pleaded not guilty and denied Holmes’s abuse allegations before her trial started in September.
Holmes’s cross-examination continues next week.
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