Review: Bad Blood

March 11, 2021March 13, 2021 / rtrube54 / 4 Comments

Bad Blood, John Carreyrou. New York: Vintage, 2020.

Summary: The account of Elizabeth Holmes, the blood testing company Theranos, and the ambition that led to lies upon lies deceiving famous investors, pharmaceutical companies, and business publications until an investigative reporter on a tip discovered the house of cards on which it was all built.

Elizabeth Holmes knew from childhood what she wanted to be. Rich. A billionaire. She broke off one romantic relationship because it hindered her in the single-minded pursuit of a dream.

The dream. To create a device that could perform an array of blood tests from a few drops of blood obtained from a finger stick. Anyone who has regular blood draws understands what a revolutionary idea this is. She dropped out of Stanford after only a year to pursue the dream fueled by repeated rounds of investor fund-raising. She drew luminaries around her–Jim Mattis, Attorney David Boies, George Schulz, Henry Kissinger, Hilary and Chelsea Clinton, Rupert Murdoch. All the time, she managed to conceal a fundamental problem. The devices didn’t work. They gave wildly inaccurate readings on the few tests they could run, and served as collection devices for conventional labs on the tests they couldn’t run.

The problem. Accurate blood tests require a volume of blood drawn from a vein. Finger sticks draw from capillaries and are susceptible to hemolysis, the rupture of red blood cells spilling their contents into the sample, rendering readings inaccurate. The typical lab panels doctors run require various processes. That’s part of why so much blood is needed. All the tech people at Theranos never figured out how to get around that problem.

Holmes could not let go of the idea, or pivot because of the fundamental problems with the machines her company developed. And so began the lies. Wildly optimistic prospectuses for investors. Falsified lab-certification results. She convinced the military, Safeway Stores, Walgreens, and even the prestigious Cleveland Clinic to invest in her machines at points. Business publications like Forbes, Fortune, and Inc. bought Holmes carefully crafted myth, further attracting investor interest. She even suppressed problems when they went “live.” Over 100,000 people were tested on the machines. Meanwhile, she and her second in command (and romantic interest–also problematic) enforced a culture of secrecy and intimidation and confidentiality agreements within the company.

How did this all happen? John Carreyrou was a Wall Street Journal investigative reporter who was contacted by a pharmacy blogger suggesting that all was not as it seemed. Eventually troubled former employees risking lawsuits came forward with key evidence of what went on in Theranos labs to fool inspectors. Careful investigative work while intimidated by high-powered lawyers from David Boies firm led to the story that revealed that the empress had no clothes, a story of massive fraud and deceit from 2003 to 2018.

When legal investigations opened things up, Carreyrou was able to write the whole narrative of this company. But how did it happen? No small part of this was due to the force of Elizabeth Holmes character–so sincere in her dream as she spoke, so riveting with her large blue eyes, and unnaturally deep voice. So like her idol, Steve Jobs, in her black turtlenecks. The same powers of persuasion were exerted over investors and employees. Sadly, the latter also saw the lies, the coverups, and the Machiavellian use of power that only increased when Sunny Bulwani, romantic interest and second in command showed up. There was an utter lack of corporate governance. Despite the impressive names of Mattis, Boies, Schulz, and Kissinger, they basically gave Elizabeth free reign to do what she wanted, no questions asked. When Tyler Schulz left and tried to plead with his grandfather, his grandfather refused to listen, leading to an alienated relationship.

The story also reveals the critical importance of investigative reporting backed up by editorial oversight and legal support. Where due diligence on the part of investors, corporate governance, and government regulators failed, a reporter given the time and resources and support to tell the story ferreted out the lies that made up the house of cards that is Theranos. What the book also reveals is another aspect of great reporting in the tradition of Ida M. Tarbell who exposed the monopolistic practices of Standard Oil–that unraveling such a story makes for a great read as we wonder whether Holmes will “fake it until she makes it” and will she gets away with her lies. It is a tale both riveting and sad, one every MBA and start-up entrepreneur ought read.

Review: The Bully Pulpit

February 6, 2015 / rtrube54 / 5 Comments

Wow. Biography of Theodore Roosevelt, William Howard Taft, and the best of the “muck-raking” investigative journalists all in one book! Doris Kearns Goodwin pulls this off by exploring the interaction of these three in promoting Progressivism in early twentieth century America. What Goodwin highlights in particular, justifying her title, was the skillful use of the “bully pulpit” of the presidency by Theodore Roosevelt, including the close relationships he developed with writers like William Allen White, Lincoln Steffens and Ida Tarbell. By contrast, Taft, with a more judicial temperament, tended to allow his speeches and policies to speak for themselves.

Having read Edmund Morris’s three volume biography of Roosevelt recently, I did not find this book casting much new light on Roosevelt except that it seemed that Goodwin probably took a less favorable view of Roosevelt’s role in the breach of the friendship between him and Taft over the 1912 election where he ran against Taft.

What I found particularly illuminating in this book were the portraits of Taft and of the investigative journalists brought together by Sam McClure. Taft is from my home state and was more or less an unknown to me before this novel. Goodwin’s portrait not only underscores his strengths as a jurist and as an administrator, but also that this is a man whose friendship one would count as precious, as did Roosevelt until the break between them. Taft ably governed the Philippines after America’s victory in its war against Spain, putting down insurgencies and turning over government to the Filipino people, albeit an elite. He always wanted to sit on the Supreme Court more than wanting to be president and considered being named Chief Justice in 1921 the highest honor of his life. That he was elected president was a result as much as anything of Nellie Taft’s ambitions and Roosevelt’s orchestration. Sadly, Nellie was afflicted with stroke ten weeks into her husband’s term of office and never fully enjoyed being First Lady. It was Taft who initiated reconciliation with Roosevelt in 1918, less than a year before Roosevelt died, and he who stood quietly weeping at Roosevelt’s grave.

Equally fascinating was Goodwin’s account of the writers for McClures and Sam McClure himself, who took investigative journalism to a high point that may have been matched but probably not exceeded by others. Ida Tarbell’s work investigating the monopolistic practices of Standard Oil and John D. Rockefeller represented years of careful tracking down of information, interviews with sources on all sides and an effort to achieve a balance of reporting that made the case against Standard Oil all the more convincing. Such reporting served as a valuable adjunct to Roosevelt’s reform efforts, creating the public support that enabled Roosevelt to fight business interests.

Because of the focus on the presidencies of Roosevelt and Taft, other aspects of their lives, and particularly their life after the presidency are covered in a more cursory manner than in a focused biography. But the relationship of presidents with the press is crucial to the effective use of presidential power, and thus, this is a landmark study with continuing relevance.

Je Suis Ida

January 16, 2015January 17, 2015 / rtrube54 / 2 Comments

“Ida M Tarbell crop” by On recto: J.E. Purdy & Co. Copyright by J.E. Purdy, Boston. – Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Ida_M_Tarbell_crop.jpg

There has been a lot of media attention on the “Je suis Charlie” movement after the execrable terrorist attack on Charlie Hebdo editorial staff. I’m not going to enter into the discussion of freedom of the press vs. respecting religious sensitivities. I am not familiar with Charlie Hebdo except from the news coverage. Broadly speaking, I defend press freedoms to the hilt while at the same time wanting to hold the press to standards of responsible journalism that recognize the power of images and rhetoric either to inflame or promote deeper understanding. I will leave the discussion of Charlie Hebdo to others.

What I would like to do is hold up an ideal of responsible journalism that I came across in reading Doris Kearns Goodwin’s wonderful The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism. One of the delightful surprises in her book is her account of some of the journalists that covered Roosevelt, Taft, and their age, particularly the group of journalists Sam McClure gathered to write for his monthly publication, McClure’s Magazine.

One of the figures who stands out, along with Lincoln Steffens, Ray Stannard Baker, and William Allen White is Ida M. Tarbell. For my Youngstown friends, she began her career as a teacher at Poland Seminary (now Poland Seminary High School in Poland, Ohio). She later went to France to pursue post graduate studies on the life of Madame Roland. It was here that McClure recruited her to write a series of articles on Napolean Bonaparte. Subsequently she researched and wrote a 20-part series on Abraham Lincoln that stood out particularly for the meticulous research into Lincoln’s childhood and youth.

Meticulous research marked everything Tarbell wrote, and nothing more than the 12 part series she wrote on John D. Rockefeller and Standard Oil that led to the breakup of Standard Oil’s monopoly on the oil business. She spent nearly three years doing careful research of depositions, company and government documents, interviews with oil producers forced out of business by Rockefeller, and even a partner of Standard Oil, Henry H. Rogers, who provided the company’s side on all that she was uncovering. She set a new standard for investigative journalism that indeed warrants Goodwin’s assertion of “golden age” for the journalism of her day.

This didn’t mean that she was “neutral” in her assessment of Standard Oil. Her meticulous research marshaled an incontrovertible case for illegal and monopolistic activity that provided the basis for the government’s efforts to break up the Standard Oil trust. Her measured consideration and refutation of corporate arguments made the case far more persuasive than a “hatchet job.”

If I were to identify with anyone journalistically, I would like to identify with people like Ida M. Tarbell, who were both careful and courageous in their writing. In an article titled “Muckraker or Historian,” cited in the Wikipedia article on Tarbell, she wrote:

“All the radical element, and I numbered many friends among them, were begging me to join their movements. I soon found that most of them wanted attacks. They had little interest in balanced findings. Now I was convinced that in the long run the public they were trying to stir would weary of vituperation, that if you were to secure permanent results the mind must be convinced.”

My question with our own age is whether this is the journalism we want, and are willing to pay for. To give a writer three years to research a story is probably more or less unheard of today. Yet the same internet that stresses news organizations’ viability also makes possible fact-checking that doesn’t always require physically crisscrossing the country as Tarbell did.

Maybe what this means is identifying the publications that are still striving for this ideal and supporting them with our subscriptions, or more. And maybe with my payment, I’ll send a note: “Je suis Ida.”