If you think your Thanksgiving dinner conversation will be awkward and stressful this year, just be glad you and your family weren’t involved with Theranos.It gets far worse from there.
As the once highly regarded blood-testing company crumbles under technological scandals and regulatory sanctions, the death toll of relationships among neighbors, friends, families, and long-standing partners is mounting. With lawsuits, investigative reports, and new accounts from a whistleblower, the company’s culture and inner-workings—which Theranos worked hard to obfuscate—are finally becoming clear. And what’s emerged are patterns of dishonesty, callousness, and litigiousness—if not outright belligerence.
Perhaps most startling of the recent revelations is the identity and family drama of one Theranos whistleblower: Tyler Shultz, grandson of George Shultz, the former secretary of state, who also happens to be a Theranos advisor. An exposé by The Wall Street Journal lays out how in the course of eight months, Tyler Shultz went from a bright-eyed Theranos employee to disgruntled whistleblower, personally disparaged by Theranos’ then-president and desperately trying to convince his grandfather to wash his hands of the doomed company.
Fresh out of college, Tyler Shultz started working with Theranos’ assay validation team in 2013, which was in charge of monitoring the precision of its blood test results. He noted wild inaccuracies on some tests before being moved to the company’s production team, where he witnessed the company’s blood testing machines failing quality controls. Both issues were flagged years later in federal inspection reports, validating Shultz’s allegations. But at the time, then-president Sunny Balwani had pressured employees to ignore the problems, Shultz said. (Balwani stepped down from the company earlier this year and was banned by federal regulators from running a clinical lab for two years.) Nevertheless, Tyler Shultz e-mailed his findings and concerns directly to Elizabeth Holmes, the company's founder and CEO.
Days later, Shultz got a message back—from Balwani. “We saw your email to Elizabeth,” Balwani wrote. “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.” He went on to belittle Shultz’s intelligence and understanding of the company’s technology. “The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson,” Balwani added.
Shultz quit Theranos that day, intending to leave the professional drama behind. However, it was just the start of his family drama. It seems that Holmes called up the elder Shultz directly to inform him of his grandson’s actions and threatened that his grandson would “lose” if he pursued the allegations. While Tyler Shultz was still gathering his things to leave Theranos, his mother called and implored him to stop “whatever you’re about to do!”
After that, Shultz said his relationship with his grandfather became strained—and remains that way. Holmes made a surprising and uncomfortable appearance at his grandfather’s house the following Thanksgiving. She also attended his subsequent 95th birthday. Tyler Shultz did not. Meanwhile, the younger Shultz says Theranos has had him followed by private investigators and pressured by lawyers.
This is a company that knew that it was peddling snake oil, and used intimidation and a culture of fear to suppress the truth.
This isn't just a bunch of people who believed their own PR. This is conscious deliberate fraud, and Holmes and Balwani need to be in the dock.