Today Elizabeth Holmes cried at the stand as she said she was raped at Stanford. That was part of the reason she dropped out of college, she said. “I decided that I was going to build a life by starting this business,” she said on the witness stand today. When she started dating Sunny Balwani, her co-accused who is being tried separately, “he said I was safe now that I had met him.”
Then, she said, he mistreated and raped her.
Holmes, the former CEO of Theranos, is on trial on 11 counts of wire fraud and conspiracy to commit wire fraud. Tapes of Holmes lying to investors and reporters were shown in the courtroom. From the opening statements we knew she was gonna try to blame it above all on Balwani, the former president of the company. Balwani’s attorney has already disputed Holmes’ allegations of abuse.
Witnesses earlier in the trial said they saw Balwani defer to Holmes. They also said that in meetings where the two were present, Holmes spoke most of the time and led the meetings. James Mattis, a former Theranos board member, said Holmes was “responsible” for Theranos. Lisa Peterson, who worked on DeVos’ investment in Theranos, said her team hadn’t done extensive research on Theranos because they didn’t want to “upset Elizabeth.”
Holmes said today that Balwani was in control of her behind the scenes: what she ate, how she dressed and how she spoke. She claimed he texted her while they were in a meeting to criticize her. We saw a document in what Holmes identified as Balwani’s handwriting which she said contained instructions for her. He told her that she was like “a monkey trying to pilot a spaceship”.
Balwani met Holmes when she was 18. He was 37. She understood that he was successful, that he had worked with Bill Gates at Microsoft. When she went to Stanford, they kept in touch via email. In March 2004, Holmes dropped out of school. She said she spoke to Balwani about the possibility of starting a business from a patent application she filed. She moved in with him in 2005.
Holmes did not put an exact date on when the alleged abuse began. But Balwani “told me that I didn’t know what I was doing in business, that my beliefs were wrong, that he was amazed at my mediocrity and that if I followed my instincts I would fail,” he said. she said. He said that “who I was was never going to be a successful person in life or in business, so I needed to kill that person and become a new Elizabeth.”
If she wanted to be a successful entrepreneur, Balwani told her, then Holmes had to devote all of her time to the business and only spend time with people who would make the business successful, she said. “I had to work seven days a week and be in the office seven days a week.” That meant spending less time with her family.
Holmes’ attorney entered a strange handwritten document into evidence. Holmes said she recognized Balwani’s handwriting. (It was distinctive, especially around the capital letter “I.”) The document contained instructions such as: “Every morning I will force myself out of bed and spend more than 30 minutes (never a minute less) to write down whatever I want out of my day. I will only spend time on the things that are most important to cash flow… ”and“ I will never meet with anyone (especially the direct report) for more than five minutes unless I have written down why… I focus on how they will serve the business more.
Another page of the document was titled “Pursuing Business Success”. The idea for this page was that some people are naturally successful in business, but those who are not can learn “by using their intellect and developing” the natural instinct. ” The most important thing was discipline. The second most important thing was “self-discovery through WRITING (not reading.)”
“He was talking about me,” Holmes said.
Next, we saw a schedule Holmes had drawn up for herself on what appeared to be hotel stationery for a hotel in Singapore called Raffles. The first part of his schedule, at 4 am, was to “get up and thank God, most things just don’t make sense”. Then, from 4:00 am to 4:15 am, she had to “wish for change”. He also noted his lunch, tofu with tabbouleh and “green drink”. Below the program were a series of notes to herself which, according to Holmes, were Balwani’s precepts: “I do whatever I say, word for word” and “I show no excitement … calm, direct. , sharp. “
Holmes said at the stand that when she wasn’t doing what Balwani wanted he “would get mad at me and yell at me because he was so disappointed with my mediocrity and he was trying to teach me to to be better and I wasn’t listening to it and I was never going to be successful.
When she was succeeded, Balwani congratulated himself: “I modeled you,” he texted her.
The defense showed a document Holmes created on her iPhone, where she said she wrote down what Balwani shouted at her: “I don’t like being in a company that’s not going to win. I don’t have faith. So mad at me for coming. So angry past [sic] 5 years of my life. The biggest failure of my life. Regret to come. I stayed because I love you… poor fucking quality from this shit company.
Holmes said the abuse was not just emotional. Balwani “forced me to have sex with him even when I didn’t want to because he wanted me to know he still loved me,” she said. According to Holmes, she wrote another document on her iPhone after one of these incidents: “Literally don’t appreciate anything about it or who I am if I did. Hurts so much. Such. Can’t focus on anything except why? Why hurt me? I can’t even move let alone do sit ups or sit up. Lying swollen. Literally. ”
What broke Balwani’s charm, Holmes said, was a report of a lab inspection in 2015. “I went to that inspection thinking we had one of the best labs in the world.” She got the report in 2016, and it said Theranos’ operations posed “an immediate danger to patient safety.” After that, to Balwani’s dismay, she hired lab directors who reported to her and got outside advisers.
Holmes said Balwani left the company soon after, in May 2016, and did not continue her personal relationship with him after that. While on a business trip to Thailand, she and her brother secretly moved his things out of Balwani’s house.
Balwani did not tell her what to say to investors, reporters or anyone about Theranos, she said. When her lawyer, Kevin Downey, asked how Balwani affected his work at Theranos, she replied, “I don’t know. It impacted everything I was and I don’t fully understand it.
The purpose of this testimony seems to be to provide evidence about Holmes’ state of mind. For the wire fraud charges to stand, the government must show that Holmes was knowingly lying. But if she believed she was telling the truth – or was somehow rendered incompetent to judge the truth – the prosecution case crumbles.
Holmes’ attorneys have attempted to admit parts of Balwani’s earlier deposition as evidence in this case, as they say his attorneys told them he would plead the fifth. The prosecution disputed this and, as part of their argument, claimed that his statements of the deposition are not admissible due to a “motive of love”.
Attached to the prosecution’s request were texts from Holmes in May 2016 in which she said to Balwani: “I adore you. In June 2016, after Holmes said she had sneakily left their home, Balwani texted her, “I know what you are thinking and what you are going through. [sic] Control your thoughts and don’t let fear control you. Breathe and every hour be aware of your breathing and breathing [sic] by fear. Holmes replied, “I love it. According to the government, this is proof that their romantic relationship continued after Balwani left Theranos.
Holmes will need to explain how these texts correspond to the testimony she has given today. This testimony also differs from what she told the Securities and Exchange Commission in 2017. She said the relationship was “dead” before Balwani left Theranos. She also said in 2017 that she was “the ultimate decision maker for the business”.
I expect the prosecution to ask him about all of this tomorrow – his examination-in-chief ended like the day in court.