Former U.S. Secretary of Defense James Mattis on September 03, 2019 in New York City.
Getty Images SAN JOSE, CALIF — James Mattis, former U.S. Defense Secretary General testified Wednesday that he became disappointed with Theranos after being “frankly surprised” by what was possible initially.| Getty Images
SAN JOSE, CALIF — Former U.S. Defense Secretary General James Mattis testified on Wednesday that as a board member at Theranos he was “frankly amazed” at what was possible at first but later became disillusioned with the company.
Mattis testified that “we were putting out our reputation at danger, and reputational risks is something I pay much attention to considering my background,” he said during Elizabeth Holmes’ trial.
Mattis was a four-star retired general and served on Theranos’ board of directors between 2013 and December 2016. He was also the first well-known witness to testify since the trial began last month. He gave three hours of testimony and the jury was attentive.
“Looking back now I’m disappointed at the level of transparency from Ms. Holmes,” Mattis said, adding “we were being deprived of fundamental issues.”
Mattis was the seventh witness that the government summoned to the stand in this case. Holmes is facing 12 wire fraud charges and conspiracy to deceive investors and patients. She has pleaded guilty.
Mattis recounted meeting Holmes after an event in San Francisco where she pricked his finger to demonstrate her blood-testing technology.
While he stated that his first impression of Holmes as CEO was sharp, articulate and committed, he initially resisted Holmes’ offer to join him on the board.
Mattis replied, “I asked her why’ and she told me I wasn’t a physician.” Holmes said to him that he wanted him on her board, “to help build a corporate environment out of building elite team, how get commitment from people. It wasn’t about management.
Mattis agreed to become a member, and he testified that he purchased two books as well as two pamphlets in a bookstore so he could learn how to serve on a board. Mattis stated that he had invested $85,000 in Theranos, and received $150,000 for his service on the board.
Was that a large investment? John Bostic asked, an assistant U.S. Attorney.
Mattis replied, “Yes for someone who has been working in government 40 years.”
Former Secretaries of State Henry Kissinger (now George Shultz) were also prominent government officials on the board.
Cross-examination revealed that defense lawyers pointed out an email Holmes sent to Mattis in February 2015. It stated that Holmes and Ramesh Balwani were romantic partners and wanted stock options to replace a salary.
Mattis explained that at the time she seemed to have strong beliefs in her company.
Holmes attorneys pointed out, too that Holmes board members were intelligent enough and sufficiently knowledgeable to be able to share their views and pose questions if needed. Mattis agreed.
The defense attorneys discussed Holmes’ potential need for security personnel. “You felt that she needed that type of security?” Kevin Downey was a defense lawyer for Holmes.
Mattis said that Secretary Shultz had called him with concerns about her public image being a threat to her. Mattis introduced Holmes as his chief bodyguard.
Mattis stated, “I deferred too her, she had good judgement and Secretary Shultz probably possessed more information about the civilian world. What the threats were to people who land on the front pages of magazines.”