In the Elizabeth Holmes criminal case, the media is also on trial - CNN

Media

In the Elizabeth Holmes criminal case, the media is also on trial – CNN

Published

3 years ago

September 26, 2021

Harry Miller

(CNN Business)For a time, Elizabeth Holmes was a media darling. The college dropout who started her blood-testing company Theranos at 19 graced the cover of magazines such as Forbes, Fortune, and Inc. in her signature black turtleneck to help cultivate her image as “the next Steve Jobs.” She was upheld as a rare female founder who’d raised significant sums of capital to drive her startup towards an eye-popping $9 billion valuation.

Seemingly everyone was fascinated by the young entrepreneur seeking to revolutionize blood testing and who managed to attract a who’s who of powerful men to buy into her lofty mission.

Now, Holmes’ criminal case is underway in a San Jose federal court where her relationship with the media is also on trial.

Holmes, who has pleaded not guilty, faces a dozen counts of federal fraud and conspiracy charges, and up to 20 years in prison over allegations that she knowingly misled doctors, patients and investors in order to take their money. Part of the alleged scheme? That she and her ex-boyfriend, Ramesh “Sunny” Balwani — who served as Theranos’ chief operating officer — leveraged the media in their efforts to defraud investors. (Balwani faces the same charges, has pleaded not guilty and is set to be tried after Holmes’ case concludes.)

In the government’s opening statements, lead prosecutor Robert Leach called attention to Holmes’ role in using the media and positive press coverage to propel her company and attract investors. “The defendant’s fraudulent scheme made her a billionaire. The scheme brought her fame, it brought her honor, and it brought her adoration,” Leach said.

The government alleged that Holmes even approved a 2013 piece by a Wall Street Journal opinion writer prior to its publication that offered a glowing look at Holmes and Theranos, but also contained misleading claims of the company’s capabilities at the time. The article corresponded with a broader unveiling of the startup after years of operating in stealth and was leveraged by Holmes as external validation of the company.

In a statement to CNN Business, Journal spokesperson Steve Severinghaus said, “editors make publishing decisions based on their independent judgment.”

The statement continued, “Our writer asked Elizabeth Holmes to confirm complicated facts on a technical subject, not to approve publication. Our writer visited Theranos, spoke with numerous sources in and outside the company about its technology, and had his blood tested on a Theranos machine that appeared to offer credible results. If that was all a deception, then the responsibility lies with Ms. Holmes and Theranos.”

In his testimony Wednesday, retired four star general and former Secretary of Defense James Mattis, who served as a board member and invested $85,000 into the startup, shed light on the level of control Holmes asserted over what was revealed to reporters. Mattis testified that he asked what he was at liberty to share before speaking to the New Yorker’s Ken Auletta, who profiled Holmes in December 2014. Holmes responded to Mattis in an email, shown in the courtroom, with a list of three topics she said the company didn’t talk about on the record, including “How our technology works (ie that there is a single device that does all tests).”

“I thought we had been kind of out front that there’s a single device and why would we want to hide that,” Mattis testified Wednesday, while also noting that it “didn’t bother me because I didn’t consider myself a technological expert, and I wasn’t going to talk about something I wasn’t an expert in anyway.” (Mattis is not directly mentioned in the New Yorker article.)

It was Auletta’s article that ultimately led then-Wall Street Journal reporter John Carreyrou to start digging. Carreyrou’s investigative reporting would uncover significant flaws in the company’s technology and capabilities that contradicted claims made by Holmes and Theranos. His work prompted broader scrutiny into the company leading to its eventual demise. Carreyrou also wrote a critically-acclaimed book “Bad Blood: Secrets and Lies in a Silicon Valley Startup” based on his reporting.

In the course of his own reporting, Auletta pressed Holmes on her claims — particularly that Theranos was sharing data with the Food and Drug Administration. Holmes grew frustrated, according to audio recording of Auletta’s interview of Holmes that aired on the latest episode of Carreyrou’s podcast covering the trial. “You’re getting into an area that’s privileged,” she told Auletta.

“For the media to become part of the story, that’s less common”

The media both helped build up Holmes and Theranos and then played an important role in revealing what was really happening at the company, Margaret O’Mara, a historian of the tech industry and professor at University of Washington, told CNN Business in an interview this month. Holmes arrived on the scene as a rare female founder claiming to be “doing big things, changing the world … at a time when Silicon Valley is starting to get heat — rightly so — for not having many women at the top.” O’Mara said it was a storyline that Holmes leaned into.

According to Miriam Baer, a law professor at Brooklyn Law School, corporate fraud cases can often involve a charismatic actor who tells a compelling narrative. “It is not unheard of or infrequent for the media to discover fraud,” she told CNN Business. “But for the media to become part of the fraud — or part of the story, if you will — that’s less common.”

Holmes’ interactions with reporters may be put front-and-center if journalist Roger Parloff, a possible government witness, takes the stand. Parloff wrote the Fortune Magazine cover story on Holmes and Theranos in June 2014 — the first of many favorable profiles. In Parloff’s own words, the feature “helped raise to prominence” Holmes, as he later detailed in a column more than a year later titled “How Theranos Misled Me.“

“Roger was first [to the story] and felt a tremendous amount of guilt,” said Alex Gibney in 2019; Gibney is the prolific documentary filmmaker whose HBO film, “The Inventor,” chronicled the rise and fall of Theranos. Gibney, who has said his work began with interviewing journalists who felt duped, has called Parloff the “beating heart” of his film. (CNN and HBO share a parent company.)

While Parloff has turned over audio recordings and notes from his interviews with Holmes and Balwani as part of a grand jury subpoena order, he’s objected to a trial subpoena order by Holmes’ defense team, citing reporter’s privilege among other considerations.

According to a recent court filing, Holmes’ defense team is seeking to compel Parloff to comply with the order, asking that he be required to turn over notes and recordings from interviews he conducted with others for his story. This evidence, Holmes’ team believes, will serve to refute the claims that Holmes misled Parloff, and through him, investors. Holmes’ team has called for a hearing on the matter on or around October 6. (According to Baer, “a trial subpoena contains more hurdles to collecting information than there are under a grand jury subpoena,” adding that the outcome of the hearing “may well result in a much narrower field of documents that the reporter has to produce.”)

There’s also a chance Carreyrou will take the stand — with Holmes listing him among her potential witnesses. Carreyrou, in a tweet, said his name appearing on her possible witness list — along with three prosecutors and officials from the FDA and Centers for Medicare and Medicaid Services — indicate to him, “They’re going to argue to the jury that this was a witch hunt.”

In an interview ahead of the trial, Carreyrou said he’d “make a great witness for the prosecution and a terrible one for the defense,” noting that he’s “a bit concerned” about whether it would interfere with his ability to cover the trial through his podcast. He’s yet to be subpoenaed.

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Opinion | The Media Say Crime Is Going Down. Don't Believe It – The Wall Street Journal

Published

56 mins ago

April 25, 2024

Harry Miller

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Opinion | The Media Say Crime Is Going Down. Don’t Believe It The Wall Street Journal

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end-of-season media availability

Published

2 hours ago

April 25, 2024

Harry Miller

By Justin Vézina At the end of its spectacular 2023-2024 season, the Laval Rocket held its end-of-season media availability to bring the campaign to a close. Ten players, plus head coach Jean-François Houle, appeared before the media. For those who wish to view all the press conferences, they are presented below. However, for those who […]

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Forget Trump — the American media is on trial in New York – The Hill

Published

11 hours ago

April 25, 2024

Harry Miller

Forget Trump — the American media is on trial in New York | The Hill

Opinion>Campaign

The views expressed by contributors are their own and not the view of The Hill

It was July 2018, and Michael Avenatti was considering a presidential run. Anyone can consider running for president, I suppose. It’s just that when the lawyer for Stormy Daniels and cable news mainstay did it, important people — theoretically important, at least — in the press took it seriously.

CNN’s Jim Scuitto had Avenatti on to talk about it, and make a bit of a campaign pitch for himself, on July 4. The next day, CNN’s editor-at-large Chris Cillizza, one of the more prominent writers for the website back then, published a piece of analysis with the headline “President Michael Avenatti? Never say never!”

And sure, why not. Avenatti was riding high at the time. A couple months earlier, he was being pitched, according to the New York Times, for a “Crossfire”-like show with Anthony Scaramucci, the rapidly-defenestrated former Trump communications director, by mega-agent Jay Sures, who represents top CNN talent like Jake Tapper and Anderson Cooper. Maybe that’s why Avenatti became so ubiquitous on the network to begin with — embarrassingly so, in retrospect.

But if we look back to April, almost exactly six years ago, that’s when Avenatti truly burst onto the national scene. On April 9, 2018, the FBI raided the office of Michael Cohen, the long-time “fixer” and business associate of then-President Donald Trump. The next day, Avenatti was on Cooper’s CNN show to break it all down — from Stormy Daniels, his porn actress client, to Karen McDougal, the former Playboy playmate, to Cohen himself. It was Avenatti’s chance to craft the narrative for the media, and the media was happy to oblige.

The whole ordeal was portrayed a couple weeks later in a cringe-inducing “Saturday Night Live” cold open, with Ben Stiller playing Cohen, Jimmy Fallon playing Jared Kushner, and Stormy Daniels playing herself. (She struggled to nail the “Live from New York, it’s Saturday Night!” line at the end.)

It’s worth reflecting this week on this bizarre 2018 moment, as it serves as the prelude to the first (and possibly only) trial of Trump in 2024. The trial that officially began on Monday isn’t about “insurrection” or “espionage” or classified documents or RICO. Oh no. It’s this reality TV, trashy tabloid junk about porn stars and Playmates — stuff that belongs more in the National Enquirer than the National Broadcasting Company.

Which is ironic, of course, because the first witness in the case was David Pecker, the former executive in charge of the National Enquirer. (It’s also ironic that Avenatti is now firmly on Team Trump, saying he’d be happy to testify for the defense, although of course he’s also currently in federal prison for wire fraud and tax fraud, so…)

It’s been more than six years since that initial FBI raid, and the original Avenatti media sin. But buckle up, here we go. We’re getting to hear about the way Trump teamed up with the National Enquirer in an effort to boost his 2016 campaign. A bit like how most of the establishment press today is teaming up with the Biden campaign to stop Trump in this cycle.

You know that story about Ted Cruz’s father potentially being involved in the murder of JFK? Totally made up, to help Trump in the primary! None of this is surprising, to any discerning news consumer. But it does allow the media to get on their proverbial high horse over “checkbook journalism” — as if the crusty old legacy press hasn’t been doing a version of it for decades, when ABC or NBC wants to secure a big “get” on their morning show. But the journalistic ethics of the National Enquirer are a red herring — a distraction from the substance of the trial.

After Pecker, we’ll get Cohen, and Daniels, and McDougal as witnesses. Avenatti, at least it seems for now, will stay in prison, and not get to return to the limelight.

This trial is a circus. But the media made their choice way back in 2018. And now they too are on trial.

To get meta for a minute, when I decide to devote my weekly column to a topic, I’m not only deciding the topic to cover, but making a decision about what not to cover as well. On a far larger and more consequential scale, every single news organization makes choices every day about what to focus on, how to cover it and what gets left on the cutting room floor.

Back during the Trump years, the media spent an inordinate amount of time dissecting every last detail of this tabloid journalism fodder we’re now seeing play out in a New York City courtroom — which is meaningless to the lives of nearly every American. The trial is the culmination of the inconsequential work that ate up so many hours of cable news, and occupied so much space in the most powerful media outlets in America. So much time and energy and resources that could have been devoted to literally any other story, including many that directly relate to Donald Trump. And yet now, here we are.

This trial has to matter for the American press. If it doesn’t, it invalidates their entire existence during 2018. But if the public tunes out — and, can you even imagine if a jury in New York City actually finds Trump not guilty at the end of this thing — well, it’s as much an indictment of the Trump-obsessed Acela media as it is of the system that brought these bizarre charges and salacious case in the first place.

Steve Krakauer, a NewsNation contributor, is the author of “Uncovered: How the Media Got Cozy with Power, Abandoned Its Principles, and Lost the People” and editor and host of the Fourth Watch newsletter and podcast.