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)
Tags: Elizabeth Holmes, George Shultz, Theranos, Tyler Shultz
