George Shultz’s grandson was a Theranos whistleblower, report says

Now add to the crisis at Theranos the breakdown of a family.

In a twist that could be straight from the script of a daytime soap opera, the grandson of George Shultz, the former U.S. Secretary of State who has been a big supporter and director at Theranos, became a company whistleblower alerting a state regulator about questionable practices at the medical testing company, according to the Wall Street Journal.

Tyler Shultz said he tried to raise concerns about Theranos first with Elizabeth Holmes, the CEO and founder of the company. But instead he received a sharp rebuke from then-Theranos President Sunny Balwani.

The younger Shultz began interning at Theranos after meeting Holmes at his grandfather’s house near Stanford. George Shultz is a fellow at the Hoover Institution, a think tank at Stanford. The younger Shultz changed his major from mechanical engineering to biology to prepare for a career at Theranos.

Starting in 2013, Shultz began working full time at the startup, inspired by the firm’s vision of providing blood tests from tiny samples of blood drawn painlessly from fingertips.

But once at the firm, Shultz’s excitement quickly faded. He discovered that test results on the firm’s proprietary Edison machine varied widely for the same blood samples. He also claimed that Edison flunked the firm’s quality and control standards.

When Shultz wasn’t satisfied with the company’s explanations, he complained to New York state’s public-health lab, the first known regulatory complaint about Theranos and its lab practice.

He also complained to Holmes but heard back from Balwani, who was dismissive of his concerns.

On the day he left the company, his mother called,  imploring him, “stop whatever you’re about to do!”

Shultz went to his grandfather’s home to plead his case, but said he felt like his grandfather’s allegiance to the firm had only grown. The elder Shultz told the younger to move on.

At a Thanksgiving dinner at George Shultz’s house seven months later, nothing was mentioned about the riff:

Ms. Holmes was there with her parents. Over turkey and stuffing, they discussed California’s drought and the bulletproof windows on Theranos’s new headquarters as if nothing had happened.

Mr. Shultz listened awkwardly as Ms. Holmes stood up and gave a toast expressing her appreciation for every member of the Shultz family, he says.

Shultz had to rebuff attempts by Theranos lawyers to get him to sign a confidentiality agreement and has been accused of revealing trade secrets. His parents, he says, have spent more than $400,000 on legal fees.

The younger Shultz says:

Fraud is not a trade secret. I refuse to allow bullying, intimidation and threat of legal action to take away my First Amendment right to speak out against wrongdoing.

Now the younger Shultz is working on a project to build a “portable device capable of diagnosing a dozen diseases from a person’s blood, saliva and vital signs,” according to the article.

Yes, much like Theranos’ original vision.

Shultz says in his last meeting with his grandfather in July, he pleaded with him to cut ties with the company, where Shultz remains on the firm’s board of counselors.

“Please do the right thing,” he said.

Grandfather and grandson have not seen each other since.

Photo: Elizabeth Holmes, CEO of Theranos. (Karl Mondon/Bay Area News Group)

 

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  • Michael Ho

    looks like grandson is smart, intelligent and have ethics and will be like Mark Zuckergberg!
    it looks like Holmes is a CON just like Trump and will be a convict! it looks like grandfather chose wrong over right just like the Repulicans!

    • Lynn

      How did Trump and politicians get into these comments? Focus everyone, it’s not about Trump or Hillary…the election is over.

      Congrats to Tyler Schultz for standing up for ethics, not his pay check; even though his grandfather did not listen to him. Grandfather’s lack of curiosity about any wrong doing conveniently blocked his own ethical responsibilities as a board member.

      George Schultz is worldly enough to know that he should have quickly declined the invitation to be on that board, and should have advised Holmes to get outstanding experts in the field, not himself — but he caved, too bad. It’s also amazing that investors thought that it was okay not to have a top quality board.

      Tim Draper said that the press was blindsided, so they are skeptical and negative about the company. That’s hardly the case, since Holmes has expertly used the media to focus on herself, and her “narrative” and her rediculous and fake effort to look like and talk like Steve Jobs –– from black clothes to even saying that she doesn’t have any furniture in her house after ten years. Very odd. When CNN interviewed her at the company, she blamed the top people in the lab for the failures –– even though she goes on and on about how important it is to personally fail in order to eventually have success, the Silicon Valley mantra. She has put herself before anyone else.

  • Leigh

    Elizabeth Holmes, a DemonicRat who fundraised for Hillary Clinton, has been true to herself and her political leanings throughout her career! Deny the wrongdoing, and instead — deflect, distract, misdirect, and continue to deny your intentional fraud and dishonesty!

  • Beyond9

    To think Lizzy would have gotten away with her criminal enterprise if Hillary was elected President.

  • Lynn

    How did Trump and politicians get into these comments? Focus everyone, it’s not about Trump or Hillary…the election is over.

    Congrats to Tyler Shultz for standing up for ethics, not his pay check; even though his grandfather did not listen to him. Grandfather’s lack of curiosity about any wrong doing conveniently blocked his own ethical responsibilities as a board member.

    George Shultz is worldly enough to know that he should have quickly declined the invitation to be on that board, and should have advised Holmes to get outstanding experts in the field, not himself — but he caved, too bad. It’s also amazing that investors thought that it was okay not to have a top quality board.

    Tim Draper has said that the press was blindsided, so they are skeptical and negative about the company. That’s hardly the case, since Holmes has expertly used the media to focus on herself, and her “narrative” and her ridiculous and fake effort to look like and talk like Steve Jobs –– from black clothes to even saying that she doesn’t have any furniture in her house after ten years. So she’s not Elizabeth…we must equate her with Jobs instead. When CNN interviewed her at the company, she blamed the top people in the lab for the failures –– even though she goes on and on about how important it is to personally fail in order to eventually have success, the Silicon Valley mantra. It’s not about reality.

 
 
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