Billionaire Clinton, Obama Crony Caught in Massive Fraud Scandal
https://www.westernjournal.com/ct/author/chris-golden/?ff_source=push&ff_medium=conservativetribune&ff_campaign=manualpost&ff_content=2018-06-17 n October of 2015, Elizabeth Holmes, the CEO of medical device startup Theranos, declared that âÂÂEvery time you see a glass ceiling thereâÂÂs an âÂÂiron womanâ underneath it.â America had every reason to believe she was one of them.
She was the âÂÂself-made billionaireâ head of a company that was valued at $9 billion, which was at one point more than Uber or Spotify. Its Edison platform promised a revolutionary blood test that only required a finger prick as opposed to blood drawn from a vein. Bill Clinton interviewed her with Alibaba founder Jack Ma in an event for the Clinton Global Initiative. Barack Obama appointed her as a Presidential Ambassador for Global Entrepreneurship. She raised money for Hillary ClintonâÂÂs presidential run.
On Friday, Holmes was indicted on wire fraud charges by federal prosecutors in the Northern District of California. Theranos is very close to being liquidated, basically having lapsed into âÂÂEnron 2: Electric Boogaloo.âÂÂ
As it turned out, its âÂÂrevolutionary platformâ could barely perform a few of the 240 tests the company had promised, and even then it didnâÂÂt perform them well. As Vanity Fair reports, Holmes, 34, could be spending decades in jail, all because the company she started in 2003 after dropping out of Stanford apparently turned out to be little more than a way to spend investorsâ dollars, poorly.
âÂÂAccording to the indictment, Holmes and (Theranos COO and president Ramesh) Balwani used advertisements and solicitations to encourage and induce doctors and patients to use TheranosâÂÂs blood testing laboratory services, even though the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests,â a statement from the U.S. AttorneyâÂÂs Office read. âÂÂThe tests performed on Theranos technology, in addition, were likely to contain inaccurate and unreliable results.âÂÂ
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âÂÂThe indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors. Specifically, the defendants claimed that Theranos developed a revolutionary and proprietary analyzer that the defendants referred to by various names, including as the TSPU, Edison, or minilab. The defendants claimed the analyzer was able to perform a full range of clinical tests using small blood samples drawn from a finger stick. The defendants also represented that the analyzer could produce results that were more accurate and reliable than those yielded by conventional methods â all at a faster speed than previously possible.âÂÂ
In addition to the criminal indictment, Holmes has already agreed to pay a civil penalty of $500,000 to the Securities and Exchange Commission for fraud in an agreement that mandated she not be able to head a public company for 10 years. (Theranos is a privately held company, although Holmes stepped down as CEO on Friday after her indictment.)
So, how did Elizabeth Holmes sucker so many people? ItâÂÂs worth noting that this is a bipartisan scandal in many ways. Before he became defense secretary, James Mattis served on Theranosâ board, as did former Reagan administration Secretary of State George Shultz. (ShultzâÂÂs grandson was one of the whistleblowers on Theranosâ alleged illegal activity, according to The Wall Street Journal.) According to The New York Times, media mogul Rupert Murdoch and Secretary of Education Betsy DeVos lost huge amounts of money in the enterprise.
However, each of them seemed to have been taken either by the science behind Theranosâ device or the possible applications for it (in the case of Shultz and Mattis) or because it represented a prime investment opportunity (in the case of Murdoch and DeVos).
When it comes to the Clintons and Obama, however, things get a bit murkier.
It probably wonâÂÂt surprise you, given that she helmed a Silicon Valley startup, that Holmes was a Clinton donor. Not only that, but Hillary Clinton had planned to host a fundraiser at Theranos until media attention forced her to host it elsewhere. (Even liberals were embarrassed.) The planned $2,700 a head event was to feature Chelsea Clinton, but apparently even the media couldnâÂÂt ignore the fact that she was hosting an event at a company that was under federal investigation.
âÂÂ(The event) is not connected to a specific company or policy, but a chance to talk directly to women in tech,â ClintonâÂÂs campaign said at the time, according to the Washington Free Beacon. âÂÂWe frequently send initial invitations while host committees are still being formed and locations finalized. This was never a health care event and the location wasnâÂÂt set. It will not be at Theranos.âÂÂ
That was hardly the only contact that the Clintons had with her, however. When Bill Clinton interviewed Holmes in 2015 for his Clinton Global Initiative, an arm of the scandal-plagued Clinton Foundation, he noted that she started the company when she was only 19.
âÂÂDonâÂÂt worry about the future, weâÂÂre in good hands,â Clinton said. Holmes, for her part, talked about bringing âÂÂequalityâ to health care.
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President Obama went even further than the Clintons in embracing Holmes. In 2015, he invited the CEO to the White House, where he made her a Presidential Ambassador for Global Entrepreneurship. If youâÂÂre wondering what a Presidential Ambassador for Global Entrepreneurship does, itâÂÂs stuff like this PSA:
So, whatâÂÂs the overarching point here? Why would the Clintons and the Obama administration get so involved with Holmes? We donâÂÂt necessarily impugn their judgment on her companyâÂÂs viability, inasmuch as almost nobody knew it was a fraud.
On the other hand, they didnâÂÂt really seem to care whether it was or not. Hillary ClintonâÂÂs campaign wanted to hold a campaign event at Theranos well after it became clear, thanks to The Wall Street JournalâÂÂs reporting, that the company was suspected at least of some very shady things.
The fact was that Elizabeth Holmes was a DemocratâÂÂs dream.
Here was a young, millennial woman CEO saying all the right things about breaking the glass ceiling and instituting âÂÂequality âÂÂin health care. So what if her product was promising things that seemed impossible? So what if her company was under investigation? After all, she just brushed it off as the ossified medical establishment coming after her company. She was great copy.
And so, in a way deeper than Theranosâ investors or board members did, they co-signed Holmesâ reputation as the next Steve Jobs. The great thing for the Democrat mind was that the next Jobs came in a package that echoed all of their political prejudices. Or, in a kind of corruption of philosophy and politics thatâÂÂs worse â and deeper â than financial misdealing, was it that she was the next Steve Jobs because she echoed all of their political preferences?
WeâÂÂll probably never know the answer to that chicken-or-egg question. We do know one thing for sure, however:
If only the Clintons and Obama had waited a little while, theyâÂÂd have figured out they were dealing not with a Steve Jobs but instead a Kenneth Lay.
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Billionaire Clinton, Obama Crony Caught in Massive... (