
Theranos Whistleblower Shook the Company and His Family - trimbo
http://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963
======
danso
Wow. It feels like a miracle whenever anyone takes a principled stand despite
the hype and pressure of Silicon Valley and startup culture, never mind the
usual corporate pressure. But this kid stood up to his own family, and lawyers
hired by his family. Fairly or not, Stanford will always have some association
with the legend of Elizabeth Holmes, but the engineering school can feel proud
that they produced a graduate who showed real ethical backbone. It's fairly
easy to imagine oneself bravely standing up to Theranos after reading the WSJ
investigation last year. It's another thing to be the guy who launched it
despite legal and familial pressure.

~~~
cft
If an ordinary employee tried to take such a stand, he would be ignored, shut
up, fired, sued, or perhaps jailed, depending on how firmly he was willing and
able to take it.

FYI: "As _household staff_ served them dinner in the formal dining room, the
elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-testing devices
worked so well that they were being used in medevac helicopters and hospital
operating rooms, Tyler Shultz recalls. He and his colleague knew that wasn’t
true."

~~~
prostoalex
The whistleblower laws allow some degree of anonynimity precisely for the
reasons above.

From the article:

" _Using an alias_ , Tyler Shultz contacted New York state’s public-health lab
..."

"... Mr. Shultz began speaking to a Journal reporter as a _confidential_
source."

"... regulatory complaint Mr. Shultz had filed _under the alias_ Colin
Ramirez"

The decision to confront the CEO personally was his own, he could've chosen
the anonymous path all along.

~~~
cft
An anonymous whistleblower is likely to be ignored however. I edited my reply
to include this most likely option.

Schultz Jr was contacted in LinkedIn by a WSJ reporter, he did not hide his
identity because he likely (empirically) realized that his anonymous complaint
would be ignored.

~~~
prostoalex
Based on what data? The government has set up a bunch of venues specifically
for anonymous whistleblowers, e.g.
[https://www.whistleblower.gov/overview/submitatip/](https://www.whistleblower.gov/overview/submitatip/)
[https://www.irs.gov/uac/whistleblower-informant-
award](https://www.irs.gov/uac/whistleblower-informant-award)
[https://www.osha.gov/Publications/OSHA3714.pdf](https://www.osha.gov/Publications/OSHA3714.pdf)
so there's at least _some_ process behind the scenes rather than > /dev/null

He didn't have to hide his identity from a WSJ reporter because journalistic
sources are protected by similar set of laws. To the readers of WSJ he was
just a "confidential source".

~~~
cft
In the article it says "In March 2014, he anonymously emailed his complaint to
New York officials.."

Then the article says: "In March 2015, Tyler Shultz was contacted by a Journal
reporter through the professional network LinkedIn."

Something doesn't match up here. I can only assume that his anonymous
complaint did not reach the desired effect in a year, and he went via other
channels, using his own renouned last name.

~~~
rbobby
The reporter likely contacted a bunch of Theranos employees via LinkedIn (and
probably sorted the list based on former/current).

Was Tyler the only confidential source to talk to the WSJ? Probably not.
because of that whole two sources rule good journalists follow.

~~~
cft
So your theory is that after Tyler's initial complaint, the regulators waited
for a year, and then leaked the anonymous complaint to WSJ, which randomly
contacted a bunch of employees, including the original anonymous tipper?

~~~
vkou
Alternatively, another employee tipped off the WSJ (Instead of, or in addition
to a regulator,) and the WSJ started contacting current, and former employees,
to see if their story had any legs.

------
mevile
I just want to point out that Theranos is involved in lawsuits with nearly
everyone now. Former employees, investors, its pivotal business partner
Walgreens, the federal government, state governments and they've threatened
legal actions against journalist and news outlets. Their product turned out to
be sham. They covered up the evidence. They threatened everyone. They resorted
to intimidation tactics. All while people's health were on the line.

Theranos is without a doubt among the worst companies to ever come out of the
Bay Area. They're like a real life UNorth (Michael Clayton film). I hope their
collapse is complete, utter and thorough. Everything and everyone in their
leadership team painted with that brush for the rest of their career.

The WSJ and their journalist John Carreyrou ought to be commended and probably
win a pulitzer for their coverage of Theranos.

~~~
rdtsc
> Theranos is involved in lawsuits with nearly everyone now.

Good. They were playing games with people's lives. It is one thing to play
startup when it is Uber for Dogs and puppy ended up not seeing its friends at
the park that day, it is another thing to mess up blood test results.

If someone who got hurt can come forward and wants to press criminal charges,
they should get all the support needed. I can understand mistakes happening,
but lying and going forward after they knew was abhorent.

~~~
Hondor
Careful, some/most(?) of the lawsuits aren't because of risking patient's
lives. They're for things like defrauding investors. They're not somehow more
guilty because they also happened to do some other wrong thing at the same
time.

~~~
rdtsc
I understand and saying maybe there should be some criminal investigations as
well. Someone dying or getting injured is not out of the realm of possibility
when they had known bad test results and continued anyway.

~~~
x0x0
The feds are issuing subpoenas as well, though this [1] appears to make it
sound like they're interested in the misleading investors angle.

[1] [http://www.cnbc.com/2016/04/18/feds-target-theranos-with-
cri...](http://www.cnbc.com/2016/04/18/feds-target-theranos-with-criminal-
investigation-reports-say.html)

------
SilasX
"The only reason I have taken so much time away from work to address this
personally is because you are Mr. Shultz’s grandson."

\--Theranos President Sunny Balwani to [Theranos employee/whistlblower] Tyler
Shultz in a 2014 email

Ouch.

(Tyler is the grandson of fmr Sec. of State/Treasury/Labor George Shultz, who
was also a Theranos board member)

Edit: Another quote from the email:

"We saw your email to Elizabeth. Before I get into specifics, let me share
with you that had this email come from anyone else in the company, I would
have already held them accountable for the arrogant and patronizing tone and
reckless comments."

~~~
ethbro
_> "As household staff served them dinner in the formal dining room, the [95
year old] elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-
testing devices worked so well that they were being used in medevac
helicopters and hospital operating rooms, Tyler Shultz recalls. He and his
colleague knew that wasn’t true."_

I'm absolutely against ageism, but when you're 95... maybe it's not the period
in your life where you should be attempting to vouch for groundbreaking
biology on the basis of someone else's claims.

~~~
gozur88
Was he "vouching" or just relating what she'd told him? I doubt many
investors, young or old, have the medical chops to spot falsified data.

~~~
ethbro
If I'm trying to convince my grandson not to talk to federal regulators, I'd
say that passes the bar of being complicit in the scheme.

And absolutely agreed, but at the same time I've heard biotech VC firms gave
Theranos a pass. But I guess that speaks more to "If you don't have in house
expertise, hire someone to perform your technical/scientific due dilligence."

------
temp0x62757474
This kind of stuff makes my blood boil. I work at a medical device
manufacturer that does it right, and when such shoddy products and process get
passed off as viable, like they did at Theranos, it's never not on purpose.
Everyone in charge there is a hack fraud and well aware of what they did. But
I doubt they'll ever experience any negative consequences beyond temporary
business setbacks.

Shultz seems alright. Too bad it takes someone fresh out of school with little
to loose and not yet jaded to blow the whistle.

~~~
seehafer
Theranos is a giant middle finger to everyone in the industry who acts
honestly and really has the best interest of patients at heart.

------
gmarx
I ask myself would I have had the balls to do this, to stand up to the
lawsuit, which I clearly couldn't afford? In my 20s maybe. Now probably not.
It seems wrong that you can threaten whistle-blowers with stealing trade
secrets. There really needs to be a solution to this problem. Obviously a
company has a right to trade secrets but an employee thinking they faked
results is hardly a trade secret. Maybe we need a special court to examine
such things. Do the whistle blower statutes have any solution for this like
extra penalties for trying to intimidate whistle blowers with lawsuits?

~~~
cr0sh
I think there are laws covering intimidation/threats/etc of whistleblowers;
I'm not sure what their status is, or whether they are federal only, and/or if
states (etc on down the pyramid) have their own statutes...

...at least, that's what I understand currently - for all I know they've been
so gutted to be completely useless.

~~~
vkou
There are plenty of laws that protect you, but using them to defend yourself
can be incredibly expensive. It's never a good idea to piss off a vindictive
person with money (Or a retired lawyer.)

------
fnbr
It's incredible to think of all of the harm that Elizabeth Holmes has created
through her desire to be the next Steve Jobs.

She has very probably killed people, ruined families, and caused at least one
suicide [1].

And all for what? The company will probably be bankrupt. She'll suffer few
consequences, as her connections will probably be enough for her to get a job
as, at the very least, a VC or as an entrepreneur-in-residence at a VC firm.

It's incredible.

[1] [http://www.businessinsider.com/theranos-ceo-elizabeth-
holmes...](http://www.businessinsider.com/theranos-ceo-elizabeth-holmes-
employee-death-2016-9)

~~~
s_q_b
To whom exactly is Ms. Holmes connected? There's an awful lot of cheering over
her demise, but I haven't kept abreast of this story.

~~~
vkou
[https://www.theranos.com/leadership/counselors](https://www.theranos.com/leadership/counselors)

Kissinger, Shultz, William Perry, two Senators, an admiral... Pretty much a
who's-who of Department of Defense insiders.

Now, it's entirely likely that these people would be more then happy to push
her under the bus.

~~~
Bud
More accurate: Republican insiders. Shouldn't leave out the most important
adjective.

~~~
gozur88
Theranos was tied in to higher-ups in both parties. Holmes was doing
fundraisers with Chelsea Clinton for Hillary's presidential bid.

So no, it's not the most important adjective.

------
seehafer
A note to anyone who ever works for a CLIA or FDA regulated company:
disclosing that a company is falsifying test data is NOT violation of a trade
secret and in most cases a company that takes action against you for doing so
is in violation of the False Claims Act.

------
dbcooper
Tim Draper must've really been taken with her - he's still defending her as a
"victim":

[http://www.cnbc.com/2016/11/15/theranos-ceo-elizabeth-
holmes...](http://www.cnbc.com/2016/11/15/theranos-ceo-elizabeth-holmes-is-a-
victim-venture-capitalist-tim-draper-says.html)

Either that or some ego issues.

~~~
sedachv
Tim Draper is on some kind of media crusade lately to completely destroy his
own credibility: [http://www.msn.com/en-us/money/other/draper-on-trump-
great-o...](http://www.msn.com/en-us/money/other/draper-on-trump-great-
opportunity-to-get-behind-our-government/vi-AAklfvO)

------
joelandren
It's time now for all the VCs and entrepreneurs who supported Holmes to now
come out and say that this behavior is abhorrent and should not be tolerated.

But they won't.

~~~
ben_jones
She also gave speeches at Stanford..

~~~
w1ntermute
And was a member of the Harvard Medical School Board of Fellows as late as
August[0], although she seems to have been removed from it since[1].

0:
[http://web.archive.org/web/20160821214900/https://hms.harvar...](http://web.archive.org/web/20160821214900/https://hms.harvard.edu/about-
hms/board-fellows)

1: [https://hms.harvard.edu/about-hms/board-
fellows](https://hms.harvard.edu/about-hms/board-fellows)

~~~
ejstronge
My understanding is that the board of fellows for Harvard Medical School is
more relate to fundraising than an endorsement of the members' life
achievements

------
walrus01
For everyone who hasn't read it yet, a long article on how Theranos began to
collapse: [http://www.vanityfair.com/news/2016/09/elizabeth-holmes-
ther...](http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-
exclusive)

------
JimboOmega
So has Theranos fully collapsed yet? Is it still a thing? I keep hearing how
it's this big house of cards that has collapsed but then... it's still going
on?

~~~
adevine
It still has a ton of cash, and the share structure is such that (as I
understand it) Holmes still has voting majority. It can survive in "zombie
mode" for a long time depending on how long the lawsuits take.

------
sparky_
Terrible to see a family relationship ruined by corporate positioning. I hope
all involved find peace.

~~~
logn
It seems to me his family was ultimately incredibly supportive (granted, they
were initially skeptical) and are doing their best to balance their interests.
His parents were willing to sell their house to cover legal fees. His
grandfather referred him to a lawyer and supported his grandson in the meeting
with company lawyers. Also their statements regarding him were very heart felt
and positive. They mention the relationship with the grandfather being
strained but that could very well be a result of PI surveillance and impending
litigation making discussions risky, so it's not necessarily anything
personal.

~~~
joatmon-snoo
Seriously, props to his parents. None to grandpops, though - seriously, if
your kid is an undergrad at Stanford and dreamed of working at a company, and
then comes and tells you that the entire thing might be a sham? It would take
a _lot_ of evidence to sway someone's mind like that.

------
brazzledazzle
It's trivial by comparison but I can't help but imagine all of the people who
are pressured to do unethical or questionable things by their managers who can
do little but quit. This probably happens across corporate America on a daily
basis where the stakes are much smaller.

~~~
ekianjo
It is certainly not limited to America.

~~~
brazzledazzle
I have no doubt it's not, just commenting on what I have experience with. It's
the only country I've worked professionally in.

------
rdtsc
> Former Secretary of State Henry Kissinger, former Secretary of Defense
> William Perry, and former Sen. Sam Nunn, all fellows with Mr. Shultz at the
> Hoover Institution, joined the Theranos board around the same time

Quick heuristic: if a startup all of the sudden needs secretary of defense and
secretary of state on the board, there is probably shady stuff going on and
they need some powerful people with connection to cover it up.

------
perplex
You have to admire him for standing up to them and not folding under pressure.
Sending that initial email just painted a target on his back. I wonder if
things would have played out differently if he quit first, then leaked the
information in secrecy.

------
kriro
Pretty brave man. 400k legal fees...yikes. I can't wait for Theranos to be
over.

As an aside:

"""One validation report about an Edison test to detect a sexually-transmitted
infectious disease said the test was sensitive enough to detect the disease
95% of the time"""

I'm assuming this is reported wrong and it was actually 5% alpha/95%
confidence and they were basically p-hacking?

------
bra-ket
John Carreyrou is surely a man on a mission

------
carlmcqueen
John Carreyrou at WSJ did a masterful job of making sure it wasn't a mystery
that the risk to the family was how profoundly connected and wealthy they are.
Holmes eating thanksgiving, etc.

I feel the email from the president was enough to justify the title by saying
'you're connected, which is the only reason I'm responding' but the other
comments like 'staff served dinner' and 'lawyers hiding upstairs'.

It would never be a mystery in majority of homes if there was someone waiting
in the wings to present papers.

------
manish_gill
What's missing from all this discussion is how everyone (including this forum)
was full of nothing but lavish praises for Theranos when it was the darling of
Silicon Valley. It took an employee who was related to a senior official of
the company whistleblowing it and then investigative journalism by WSJ for
this company to be exposed.

How many other Theranos-like companies is the "Change the world" culture of
the valley who refuses to bow down to scrutiny still praising I wonder?

------
oyashius
Theranos should be sued to the ground

------
otto_ortega
This is one of those times when I wish HN comments sections allowed to embed
images... [1]

Let this be a lesson, when a company goes mainstream due the eccentricity of
its CEO instead than the quality or proved innovation of its services/products
that's a red flag, even more so when respected professionals on the area claim
the progress such company claims to have made is not feasible...

I have a hunch that Magic Leap will end up being some kind of epic
disappointment along the lines of Theranos.

[1]
[https://blondeempire1.files.wordpress.com/2015/05/simpsonsal...](https://blondeempire1.files.wordpress.com/2015/05/simpsonsalreadydead.jpeg)

~~~
etrautmann
I don't think the comparison is apt. Magic leap is attempting something that
many think is impossible, but if they don't succeed, they're not faking blood
tests and putting people's health diagnoses on the line. Yes, if they don't
succeed, some investors will lose a lot of money, but the risk isn't falling
on users.

------
LordHumungous
This should be a movie

~~~
jcater
"Director Adam McKay, fresh off his Oscar for The Big Short, has even signed
on to make a movie based on Holmes, tentatively titled Bad Blood. (On the
bright side for Holmes, Jennifer Lawrence is attached as the lead.)" [1]

[1] [http://www.vanityfair.com/news/2016/09/elizabeth-holmes-
ther...](http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-
exclusive)

~~~
foobarian
I thought the same thing reading this passage:

"The elder Mr. Shultz joined Theranos’s board of directors in 2011. Former
Secretary of State Henry Kissinger, former Secretary of Defense William Perry,
and former Sen. Sam Nunn, all fellows with Mr. Shultz at the Hoover
Institution, joined the Theranos board around the same time. They couldn’t be
reached for comment.

The unusually high-profile board gave Theranos an aura of power, connections
and gravitas as it raised money from investors and developed the blood-testing
devices Ms. Holmes touted as revolutionary."

Why would such an array of smart people come on board against their best
judgment? Then it hit me, they must be a cabal of vampires that use the blood
in furthering their immortality experiments.

------
draw_down
God, these people are such pieces of shit. I hope at least this young man's
parents have apologized to him.

------
Snackchez
Link to text?

~~~
rgbrenner
open the web link in incognito mode, and then click on the article.

~~~
uabstraction
No good. It seems that some genious at the WSJ decided to make accounts
mandatory.

~~~
mwfunk
"web link" != the link with the title of the article. It's literally the link
with the text 'web' on the line below. That goes to a Google search for the
article. Clicking the first hit takes you to the article, no paywall.

~~~
ars
That doesn't work for everyone. For me it's random, some days it works, some
days it doesn't.

------
kutkloon7
Please do not past articles which require you to make an account in order to
be able to read them.

