Lisa Peterson was impressed by the number of things Theranos stated to her. This made it seem like a credible company when Lisa evaluated it for the insane-wealthy DeVos clan. Elizabeth Holmes and Theranos have a lot to be trusted. Its devices didnt need FDA approval.
Peterson, who is responsible for investments for the DeVos family (including Betsy DeVos, former secretary of education), said that it made it more plausible that the machines actually worked. He testified today in US v. Elizabeth Holmes.
The DeVos approach seemed to focus more on shiny things and FOMO when it came to Theranos.
Let's start with some background. It is true that Theranos did not need FDA approval before it could begin using its devices and tests. They were lab-developed tests, which are tests that have been developed in one lab. This means they don't need to undergo the FDA approval process. It doesn't mean that a test has to be lab-developed. It is not an indication that the test is more reliable than others.
Petersons testimony did not mention the FDA approval being a reason to place a bet on Theranos. It was one of many reasons she believed Theranos was worth her time. General James Mattis, Theranos board member, was not concerned about some of the company's actions. This is something that powerful conservatives seem have in common. It set the stage for a day's testimony on the DeVos familys $100 million investment in Theranos. This seemed more about shiny objects and FOMO rather than the science behind the blood test devices Holmes claimed would transform the world.
After hearing about Theranos (and Holmes) from Jerry Tubergen (CEO of the DeVos family offices, also known as the RDV Corporation), Peterson offered to be the lead in assessing Theranos. She received two large binders from the company with details about blood testing tech. In October, she called Holmes to discuss her concerns. Then, she traveled with family members to Palo Alto and spent five hours at Theranos headquarters.
Theranos had a lot of evidence to support its case. Peterson stated that Holmes and the documents gave the impression that Theranos could run hundreds of tests with a single fingerstick of blood. The Pfizer logo appears to indicate that Theranos technology was validated and used by major pharmaceutical companies. Walgreens was a major client of the company.
The documents appeared science-y, and that is apparently what was enough.
Peterson was not concerned at all about any of these materials. Peterson did not pay attention. Cross-examination revealed that Holmes attorney Lance Wade was very critical of Holmes's poor due diligence. Wade asked her if she knew the scientific tests in the Pfizer-branded document and showed her charts. She replied that she did not. He then asked her if she had looked at Theranos patent filings. She didn't.
Peterson stated that he is not a scientist. Peterson said that I cannot figure out if these documents were giving credibility to their claims.
Wade also pointed out that the DeVos family did not hire any scientists to examine the materials. They did not bring in lawyers or regulatory experts. They did not visit any of the Walgreens locations in Arizona where Theranos devices were being sold. Peterson did not call Walgreens even though she claimed to know the chief information officer.
Peterson claimed that this was due to Holmes being upset. Holmes was also vetting investors, so the family did not want to miss the chance to invest in the pot. Peterson stated that if we evaded the process, we would not be invited to participate. We tried to avoid causing any upset by Elizabeth.
We were told it worked.
Wade dug in harder. He said that Holmes would not have known if they had called Walgreens or asked scientists about Theranos data. Why didn't Peterson do more?
She replied that she didn't feel the need to. Peterson stated that they were telling us it worked. We believed everything we heard.
Peterson and DeVos' family office weren't the most thoughtful stewards for billions of dollars. They were more interested in the top-level takeaways rather than the details of the Theranos tests' operation during the site visit. Peterson and his family were satisfied with Theranos' assurances that everything was great.
This credulousness is a problem, but it seems like a risky strategy to the defense team. Their argument is that Holmes did not mislead investors. Why would the DeVos clan need to conduct extensive independent evaluations if she wasn't misleading investors? Wade argued that Theranos investors were well-informed and knew exactly what they were doing in her defense opening statement. Petersons testimony seems strongly to support this claim.
It didn't matter what Theranos was selling, it was either outright lies or smoke and mirrors that the DeVos family bought.
The defense suggested that Peterson and DeVos had misunderstood Theranos abilities as described by Holmes. Wade displayed a slide from Theranos that did not specify that all tests were performed using finger sticks. He pointed out articles in which Theranos did not directly claim that its testing devices were used to test military helicopters.
Theranos sold outright lies or smoke and mirrors, but the DeVos family was sold it. They were shocked when John Carreyrou published the Wall Street Journal's first article questioning Theranos technology. Peterson went to Holmes' presentation on Theranos technology at the American Association for Clinical Chemistry annual meeting in August 2016. She had begun asking questions, but it was late.
She said that the whole point of the project was to determine if technology works.
