Former Theranos employees are still shaken as Elizabeth Holmes trial looms: ‘The fear is real’
Elizabeth Holmes, founder and former chief executive officer of Theranos, center, exits U.S. federal court in San Jose, California on May 6, 2021.
Nina Riggio | Bloomberg | Getty Images
He was the father of newborn twins who wanted to make a difference in healthcare.
Now, with Elizabeth Holmes’ criminal fraud trial set to begin Tuesday, Micah Nies is tired of “being siloed” and is breaking his silence.
Nies is one of four former Theranos employees interviewed by CNBC ahead of Holmes’ trial. The others, who did not want their names used, say they are still afraid of retribution from Holmes and former Theranos president, Sunny Balwani.
“The fear is real,” Nies said. “Even several years later. The atmosphere was so toxic you would hear the stories of people being disappeared. There was always this fear of retribution and afterward you carry it with you.”
Holmes and Balwani have pled not guilty to a dozen counts of wire fraud and conspiracy. Balwani’s trial won’t take place until next year. Attorneys for Holmes and Balwani did not return requests for comment.
Nies was hired at Theranos in March 2015 for $185,000 a year to be the senior manager of customer service and call center operations at the company’s headquarters in Palo Alto, Calif., according to an acceptance letter he shared with CNBC. Theranos recruited him at age 41 from another healthcare company in San Diego.
He reported directly to Balwani, who he called “the king manipulator.” His job was to solve problems but he said he soon realized the real problem was Theranos itself.
Micah Nies, a former Theranos employee, with his twin sons.
“There was always something fishy or peculiar going on,” Nies said. “It was very clear they were trying to hide something. Every morning I woke up and wondered what they were going to spin today, while I was trying to find my exit strategy.”
Another employee who worked at Theranos, who quit after it became apparent the company was what she calls a “house of cards,” asked not to be named in fear of Holmes and Balwani retaliating.
Reflecting on the upcoming trial, which has been repeatedly delayed, the former employee says she feels “sad to witness such an epic failure of proper due diligence on the part of so many people, but it’s also very predictable.”
Asked what she would tell Holmes today, she said: “You’re not dealing with someone who deals in reality. So the point of having a conversation starts to diminish in the face of someone who just sees things how they want the world to be.”
The former employees interviewed by CNBC all said they left the company disillusioned and distraught over what happened, but don’t want their careers defined by this ordeal. They each arrived at Theranos with different perspectives, but looking back say their views are crystal clear about what went on inside the company.
“I wouldn’t be surprised if either one of them turned into ‘War of the Roses,'” Nies said referring to the 1989 movie where a married couple battles over a nasty divorce. “He’s got more desperation in the sense of money and she’s got a life to look forward to now that she’s trying to recreate. The recipe is there for a blame game.”
Whether Holmes will take the stand in her own defense remains unknown. Former employees said that damage control was routine at Theranos and all agreed that Holmes is innately optimistic.
“That’s what she was good at,” Nies said. “We would get bad news and the next day she would hold a town hall and everybody’s eyes would glaze over. She’s very charismatic in the sense that she knows how to talk to people.”
And that charisma was on public display in 2015 on CNBC’s “Mad Money.” The day after the Wall Street Journal published an explosive report about the Theranos blood-testing technology not working as advertised, Holmes appeared on the program to defend her company.
“This is what happens when you work to change things,” Holmes told host Jim Cramer. “First they think you’re crazy, then they fight you, then you change the world.”
Nies, who left Theranos after just one year, stays in touch with some of his former colleagues. He says they “just want to put it in the rear view mirror. Hopefully they find her guilty, Sunny too, and we all just move on. But a lot of us are skeptical that’ll happen since she’s part of this elite group.”
Another high-level employee, who asked not to be named because he may be called to testify as a witness, said he feels “it’s taken a long time, we were really hoping this would be done sooner. Most of us who worked there are anxious for it to be over.”
And a former Theranos executive who was close to Holmes told CNBC, “It didn’t have to end this way. She could have chosen any number of off-ramps and changed the trajectory of the company. But like the movie Speed, she would never take her foot off the gas pedal.”
The long-awaited trial, which will be one of the most watched financial fraud cases in recent history, is bringing back a rush of emotions for those who also believed they could make a difference.
“There’s definitely an unspoken bond between all of us, we went through it together,” Nies said. “Those of us who left Theranos before it all crumbled down, we’re on the other side of it now with good careers. It’s cathartic to speak about.”