Archives for September 2021

Just six years ago, Elizabeth Holmes seemed destined to fulfill her dream of becoming Silicon Valley’s next superstar. She was the subject of business magazine cover stories describing her as the youngest self-made female billionaire in history, former President Bill Clinton was reverently quizzing her about her thoughts on technology, and then Vice President Joe Biden was hailing her ideas as an inspiration.

Now Holmes is about to head into a San Jose, California, courtroom to defend herself against criminal allegations depicting her as the devious mastermind of a fraud that duped wealthy investors, former U.S. government officials and patients whose lives were endangered by a blood-testing technology that never came close to fulfilling her bold promises.

If convicted by a jury in a trial that begins Wednesday, Holmes could be sentenced to 20 years in prison — a stunning reversal of fortune for an entrepreneur whose wealth once was pegged at $4.5 billion. That amount represented her 50% stake in Theranos, a Palo Alto, California, biotech startup she founded in 2003 after dropping out of Stanford University at the age of 19.

Besides rehashing Holmes’ stunning rise and fall, the three-month trial may also shine a light on how style sometimes overshadows substance in Silicon Valley, which prides itself on an ethos of logic, data and science over emotion.

Holmes’ saga has peeled back the curtain on a “fake it until you make it” strategy that’s been adopted by other ambitious startups who believe that with just a little more time to perfect their promised breakthroughs they can join the hallowed ranks of Apple, Google, Facebook and other tech pioneers that sprang up in the 50-mile corridor from San Francisco to San Jose.

“I came away thinking she was just a zealot who really believed her technology would really work so maybe she could fudge just a little bit,” said author Ken Auletta, who has written extensively about Silicon Valley and was given behind-the-scenes access to Holmes for a 2014 profile in The New Yorker magazine. “I came away thinking she really believed what she was doing was a public good. And if it had worked, it would have been a public good.”

If nothing else, Holmes proved to be a master marketer while pitching the premise that Theranos would help people avoid having to tell their loved ones “goodbye too soon.”

Theranos — a name derived from the words “therapy” and “diagnosis”— claimed to be perfecting a technology that could test for hundreds of diseases by extracting just a few drops of blood from a quick finger prick done at “wellness centers” across the U.S.

Holmes promised the samples would be tested in a specially designed machine named after famed inventor Thomas Edison. In her spiel, they would cost a fraction of traditional tests that require a doctor’s referral and vials of drawn blood before lab processing that could take days to deliver results.

Told in Holmes’ husky voice, the story sounded so compelling that she could assemble a well-connected board of directors that helped burnish Theranos’ credibility. The board included former U.S. Secretaries of State Henry Kissinger and George Shultz, former U.S. Defense Secretary James Mattis, former Sen. Sam Nunn, former Wells Fargo Bank CEO Richard Kovacevich, and her former adviser at Stanford, Channing Robertson, who quit his tenured job as a chemical engineering professor after deciding she had Beethoven-like qualities.

Holmes tried to cast herself in the mold of Apple co-founder Steve Jobs, even adopting his habit of wearing mostly black turtlenecks.

Besides recruiting an impressive board, Holmes also raised nearly $900 million before Theranos’ collapse, triggered by a series of explosive Wall Street Journal articles that revealed serious flaws in the company’s technology.

The Journal articles spurred an inquiry by the U.S. Food and Drug Administration and a civil lawsuit filed by the Securities and Exchange Commission. The SEC case resulted in a $500,000 settlement without an admission of wrongdoing, but still proved to be the end of Theranos, which shut down in 2018.

Significant amounts of the money pouring into Theranos came from billionaire investors, including media baron Rupert Murdoch, Walmart’s Walton family, the DeVos family that included former U.S. Education Secretary Becky DeVos, Mexico business mogul Carlos Slim and former Oracle CEO Larry Ellison.

Some of those investors, as well some of Theranos’ former board members, are expected to testify during the trial presided over by U.S. District Judge Edward Davila.

Holmes may take the witness stand, based on court documents filed leading up to the trial. If she does, her lawyers have indicated in recently unsealed filings that she will testify that some of her statements and actions while running Theranos were the result of “intimate partner abuse” inflicted by the company’s chief operating officer and her secret lover, Ramesh “Sunny” Balwani, who faces multiple fraud charges in a separate trial scheduled to begin next year.

“That will be extraordinary,” predicted Auletta, who observed and interviewed Holmes and Balwani together on multiple occasions while he was writing his profile. “My impression was she was the dominant one in that relationship. If she started a sentence, he would wait for her to finish it.”

Balwani’s lawyer has denied Holmes’ allegations.

It remains to be seen if the license plate on the car that Balwani used to drive to Theranos’ former headquarters will be become part of the evidence submitted during the trial. It read: “VDVICI,” an abbreviation for the triumphant words Julius Caesar is supposed to have once written to the Roman Senate, “veni, vidi, vici” — Latin for “I came, I saw, I conquered.”

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SAN SALVADOR, El Salvador (AP) — El Salvador became the first country to adopt Bitcoin as legal tender Tuesday, but the rollout stumbled in its first hours and President Nayib Bukele said the digital wallet used for transactions was not functioning.

For part of the morning, El Salvador’s president became tech support for a nation stepping into the world of cryptocurrency. Bukele marshaled his Twitter account — with more than 2.8 million followers — to walk users through what was happening.

Bukele explained that the digital wallet Chivo had been disconnected while server capacity was increased.

The president said it was a relatively simple problem. “We prefer to correct it before we connect it again,” Bukele said. He encouraged followers to download the app and leave comments about how it was going.

Meanwhile, the value of Bitcoin plummeted early Tuesday, dropping from more than $52,000 per coin to $42,000, before recovering about half of that loss — an example of the volatility that worries many.

The government has promised to install 200 Chivo automatic tellers and 50 Bitcoin attention centers.

The Associated Press visited one of the automatic tellers in San Salvador’s historic center, where attendants waited to help citizens, who initially didn’t show much interest.

Asked if he had downloaded the Chivo app, Emanuel Ceballos, said he had not. “I don’t know if I’m going to do it, I still have doubts about using that currency.”

José Martín Tenorio said he was interested in Bitcoin, but had not downloaded the app either. “I’m running to work. Maybe at home tonight.”

In Santa Tecla, a San Salvador suburb, young attendants were waiting to assist people at a help center.

Denis Rivera arrived with a friend because they had been trying to download the digital wallet app without success.

He said he didn’t understand why some people “have been scandalized” by Bitcoin. “We’ve been using debit and credit cards for years and it’s the same, electronic money,” he said.

He was in favor of it and planned to use the $30 offered by the government as an incentive to try it out. “I’m going to see how efficient it is and practical it can be and based on that decide if I keep using it or not.”

José Luis Hernández, owner of a barbershop in the area, came looking for information.

“I have a small business and I want to know how to use the application and how are the rates and all of that,” Hernández said.

The AP confirmed that at least three international fast food chain restaurants were accepting Bitcoin payments.

David Gerard, author of “Attack of the 50 Foot Blockchain,” said Tuesday’s Bitcoin volatility likely had little to nothing to do with El Salvador. “My first guess was shenanigans, because it’s always shenanigans,” Gerard said via email.

“Bitcoin basically doesn’t respond to market forces or regulatory announcements,” Gerard said. “That sort of price pattern, where it crashes hugely in minutes then goes back up again, is usually one of the big guys burning the margin traders.”

Because Bitcoin is so thinly traded, it could also have been a big holder making a large sale to have cash, thus sending the market for a ride, Gerard said.

Three face-to-face public opinion surveys performed recently showed that most Salvadorans did not agree with the government’s decision to make Bitcoin legal currency. Bitcoin joins the U.S. dollar as El Salvador’s official currencies.

In June the Legislative Assembly enacted the Bitcoin law, and the Central American Bank for Economic Integration is providing the government with technical assistance.

The law says that Bitcoin can be used for any transaction and any business with the technological capacity to do so must accept payment in the cryptocurrency.

The government will back Bitcoin with a $150 million fund. To incentivize Salvadorans to use it, the government offered $30 worth of credit to those who use Chivo.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and its wild swings in value could quickly wipe out users’ savings.

Opposition groups marched in El Salvador to demand the derogation of the law that allows Bitcoin use.

Bukele has said the cryptocurrency — originally created to operate outside government controlled financial systems — would help attract investment and save Salvadorans money when they transfer earnings in the United States back home to relatives in El Salvador. But its use would be voluntary.

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AP writer Christopher Sherman contributed from Mexico City.

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NEW YORK (AP) — Ford Motor Co. has hired a former executive from Apple and Tesla to be the company’s head of advanced technology and new embedded systems, a critical post as the auto industry moves to adopt vehicles powered by electricity and guided by computers.

Before Doug Field joined Ford, he was a vice president of special projects at Apple and a engineer at Tesla. Apple has been rumored to be working on its own car project for some time, but the details have been kept under tight wraps. Field also worked on Tesla’s Model 3 vehicle.

Field will be in charge of building out passenger systems like navigation, driver-assist technology, connected systems and cybersecurity across all of Ford’s products. He will also be in charge of making sure Ford products work well with other pieces of technology, such as a smartphone or watch.

“I’m thrilled to be joining Ford as it embraces a transition to a new, complex and fascinating period in the auto industry,” Field said in a statement. “It will be a privilege to help Ford deliver a new generation of experiences built on the shift to electrification, software and digital experiences, and autonomy.”

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DALLAS (AP) — Young people on social media have found a way to protest Texas’ new law banning most abortions by focusing on a website established by the state’s largest anti-abortion group that takes in tips on violations.

They’ve shared short videos and guides on how to flood the Texas Right to Life site with fake information, memes and prank photos; it’s an online activism tactic that comes naturally to a generation that came of age in the internet era.

“I got the idea of, OK, well, we can sabotage these things online. It’s kind of like internet activism. Is it something we can realistically do and it’s not going to take us very long to do it,” said an 18-year-old TikTok user who goes by the name Olivia Julianna, using only her first and middle name due to safety concerns.

The law that took effect this month prohibits abortions once medical professionals can detect cardiac activity, which is usually around six weeks and before some women know they’re pregnant. It doesn’t make exceptions for rape or incest.

Though abortion providers say the law is unconstitutional, they say they are abiding by it.

“The law was not actually designed to be carried out in the sense of litigation, it’s designed to deter,” said Joanna Grossman, a law professor at Southern Methodist University in Dallas. “It’s just designed to bring the entire system of women’s health care to a screeching halt through fear.”

The website was down over the long weekend after host GoDaddy kicked it off, saying it violated the company’s terms of service, including a provision against collecting identifying information without consent. As of Tuesday, the site was being redirected to Texas Right to Life’s main website.

Texas Right to Life spokeswoman Kimberlyn Schwartz said Tuesday that the website’s domain is now registered with Epik and they’re in the process of moving to a new host, but aren’t yet disclosing which one. Epik used to host 8chan, an online message board known for trafficking in hate speech. Epik representatives didn’t respond to a message seeking comment Tuesday.

Schwartz said they are working to get the tipster website back up but noted that in many ways it is symbolic since anyone can report a violation. And, she said, abortion clinics appear to be complying with the law.

“I think that people see the whistleblower website as a symbol of the law but the law is still enforced, with or without our website,” Schwartz said, adding, “It’s not the only way that people can report violations of the law.”

Rebecca Parma, Texas Right to Life’s senior legislative associate, said they expected people to try to overwhelm the site with fake tips, adding “we’re thankful for the publicity to the website that’s coming from all of this chatter about it.”

And, Parma said, the website is just “another facet of the network we already have in place.” She said they have a network of anti-abortion attorneys and citizens who work with them, including people who are posted outside of abortion clinics and talk to people going in and coming out.

Julianna, who lives in Texas and has more than 136,000 TikTok followers, said that while she sees the tip website as more of a “scare tactic” than a threat, she has taken comfort in the like-minded people she’s found in her quest to thwart it.

“We’ve grown up in this new age of technology,” she said. “So now you don’t feel so isolated with what you believe in and your activism.”

Sean Wiggs, 20, who goes by Sean Black on TikTok, came up with a shortcut people could use to autofill the questions on the site. Wiggs, who lives in North Carolina, said he has received an “overwhelmingly positive” response on social media, and that he hopes efforts like his lead to more people “realizing the power that you have online.”

Julianna said she was inspired by TikTok activists who last year flooded a registration website for a rally in Oklahoma for then-President Donald Trump, although they had no intention of attending. While it’s unlikely they were responsible for the low turnout, their antics may have inflated the campaign’s expectations for attendance numbers that led to a disappointing crowd.

The law, which legal experts say was written in a way that puts defendants at a severe disadvantage, has left abortion providers leery of the potential cost of fighting a flood of frivolous lawsuits.

“I’ve never seen a statute that combines so many elements to disadvantage the defendant,” said Seth Chandler, law professor at the University of Houston.

For one, if the plaintiffs win, they can get attorneys fees and costs, Chandler said. If the defendants win, they can’t. Also, there could be multiple lawsuits filed in different counties based on the same allegation, and the statute prohibits a change of venue, he said.

“Even if the accusations that these vigilantes make are untrue, the staff and physicians would be put in the position of having to defend themselves in court, hire attorneys, travel for hearings, who knows in what county in Texas,” said Amy Hagstrom Miller, CEO of Whole Woman’s Health, which has four abortion clinics in Texas.

Dr. Jonathan Metzl, a professor of sociology and psychiatry at Vanderbilt University, said that although the website seems “comically inept at this point,” it does “what the actual law on the books is asking people to do, which is to report on people.”

Wiggs said that aspect of the law, the “way that they are deputizing private citizens to incentivize them to snitch on their neighbors,” really stood out to him.

“It’s just the way that they’re turning people against each other over an already polarizing topic such as abortion,” Wiggs said.

Texas has a history of creative forms of protest. In 2016, college students protested a new law allowing people to carry concealed handguns in public places, including universities, by walking around campus with sex toys in their hands and strapped to their backpacks, calling the protest “cocks not Glocks.” It got attention.

But, Metzl notes, it didn’t stop the Legislature enacting laxer gun laws.

“It’s a form of protest and resistance, but it hasn’t been effective changing policy,” he said. “The best way to change policy is to win elections.”

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Ortutay reported from Oakland, California.

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