Ex-Theranos CEO Elizabeth Holmes is headed to trial on a myriad of fraud charges relating to her scheme to sell what turned out to be a massively over-hyped but faulty blood sample device to a dizzying array of high-level dupes. And for a while it worked, attracting investors to her once- $9 billion enterprise, like Walmart founders the Walton family, media giant Rupert Murdoch, and former U.S. Secretary of Education Betsy DeVos. Henry Kissinger was on the board of Theranos.
Holmes and her business partner Ramesh “Sunny” Balwani are facing charges (and separate trials) of two counts of conspiracy to commit wire fraud and nine counts of wire fraud for allegedly engaging “in a multi-million-dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients,” according to the indictment.
Theranos not only tricked investors, according to charges, but the device — the Edison test — didn’t work effectively and actually misdiagnosed patients with life-altering diseases. It was also, according to Wall Street Journal reporting that led to Theranos’s downfall, using other commercially available processes to do most of the testing.
While this seems like a typical fraud case, her racket also roped in one of our top war generals, a flashing neon sign pointing to the corruption of the military industrial complex at a time when the U.S. military is working ever-closer with the private sector on the taxpayer dime.
I’m talking about former general and secretary of defense James Mattis. In 2012, while he was head of Central Command, he pressed the Army to procure and deploy the Edison test. Apparently he had been charmed by Holmes too, to the point that when an Army health unit tried to terminate the contract due to its not meeting requirements, according to the Project on Government Oversight, Mattis kept the pressure up. Lucky for our soldiers, it was never used on the battlefield.
But it didn’t end there. Upon retirement in 2013, Mattis asked a DoD counsel about the ethics guiding future employment with Theranos. They advised against it. He went to serve on the board instead for a $100,000 salary. I guess it’s his luck that he quit two years before the Theranos melt-down to work for Trump. Or maybe not. Either way this not only shows the revolving door in action but the poor judgement of the top people leading our military. It also leads us to question — as we should — how much influence the private sector is having on decisions made in the military based on officers looking over-the-horizon at their employment opportunities post-retirement.