How Elizabeth Holmes fleeced the elites

And what a rich cast of investors it is. It includes former statesmen Henry Kissinger and George Shultz. Rupert Murdoch invested $125million. Oracle investor Don Lucas, one of the first venture capitalists in Silicon Valley, roped in billionaire Larry Ellison, the 10th-wealthiest man in the world. Mexican magnate Carlos Slim and the Walton family (of Wal-Mart fame) invested, too. Word-of-mouth recommendations carry a great deal of weight when the rich chat to the rich.

All of this star power intimidated lay sceptics. One was the brilliant software developer, Avie Tevanian, who was Steve Jobs’s right-hand man at NeXT computer and then Apple. (If you’re using a Mac today you’re using Tevanian’s designs and code.) In retirement, he invested $1.5million in Theranos and joined its board, but before long he developed misgivings. When he confided to Don Lucas that he felt Holmes needed oversight, Lucas reportedly replied that Tevanian should quit, and he did.

And once Holmes was feted by the elites, the management at Walgreens, even at senior level, kept their concerns private as well. Incredibly, nobody asked to see the results of the quality-control tests on Theranos’s machines. Fearful of missing out on the Next Big Thing, Walgreens took Theranos’s word that its system had been ‘comprehensively validated over the past seven to 10 years by 10 of the largest 15 pharma companies’. So nobody could say that Theranos’s new technology actually worked. Walgreens sued for breach of contract in 2016.