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The AIH Transcript For August 31, 2021

[hosts]Peter Armstrong, Chris Howden[/hosts]

PETER ARMSTRONG: Hello, I'm Peter Armstrong, sitting in for Carol Off.

CHRIS HOWDEN: Good evening. I'm Chris Howden. This is “As It Happens”.

[music: theme]

Prologue

CH: Tonight:

PA: Help still wanted. As Canada commits to welcoming 5,000 people who made it out of Afghanistan and onto U.S. bases, we ask the federal Immigration minister what his government is offering those still at risk under the Taliban.

CH: Gory details. Elizabeth Holmes' blood-testing company wound up failing every test -- and with her fraud trial set to begin, we'll revisit our feature interview with the journalist who broke the story.

PA: Reliving a nightmare. The people of Louisiana are taking stock after a devastating hurricane ripped through the coast on Sunday -- and a search-and-rescue volunteer tells us it all feels eerily familiar.

CH: Not Maud -- just disappointed. For years, a Maud Lewis painting brought a Nova Scotia woman joy -- but now that she believes it's a fake, it just makes her sad.

PA: Gag reflex. We remember Don Poynter, whose flare for novelty items led to such innovations as the Incredible Creeping Golf Ball, and a strangely popular machine whose sole purpose was to switch itself off.

CH: And… the not-so-great pretender. No one sounds like cult musician Jonathan Richman -- except, apparently, the strange scammer who got booked at a summer festival after calling the organizers up and claiming to be Jonathan Richman.

CH: “As It Happens,” the Tuesday edition. Radio with an embarrassment of Richmans.

[music: theme]

Part 1: Afghanistan: Marco Mendicino, Hurricane Ida Damage, Maud Lewis Painting, Jonathan Richman Impersonator

Afghanistan: Marco Mendicino

Guest: Marco Mendicino

CH: Canada will welcome 5,000 Afghans from U.S. bases around the world. Immigration and Refugees Minister Marco Mendicino made that announcement this morning. The new arrivals will be part of the 20,000 people that Canada had agreed to take in after the Taliban seized control of Kabul this month. But that leaves many thousands of others who were unable to get onto outbound flights -- many of whom are now crowding across Afghanistan's borders with neighbouring countries, including Pakistan and Iran. We reached Marco Mendicino, the Minister for Immigration and Refugees, in Toronto.

PA: Minister Mendicino, who are these 5,000 people who Canada is going to be bringing in from these U.S. bases?

MARCO MENDICINO: Well, at first, the 5,000 Afghan refugee referrals that will come from the United States marks an important milestone in our shifting into high gear, the humanitarian resettlement program, which places the focus on women, girls, religious minorities, LGBTI human rights defenders. So precisely, our hope is that with the assistance of our partner, the United States in this, that we will receive Afghan refugees that fall squarely within those priorities. And I'll just say, taking a step back, that as we saw yesterday, the coalition completed its withdrawal from Afghanistan. This marked the conclusion of an historic military evacuation, but not the end of our efforts to support the people of Afghanistan. And we are going to continue to exhaust every effort to help them as much as we can,

PA: Which is key because the people that we're talking about in the 5,000 of the Afghan refugee referrals are people who are mostly safe, at least from the Taliban. You know, what about the hundreds of thousands of people who have fled the country to Pakistan or Iran who still need help?

MM: Well, I'm going to come back to that in just one moment. But first, to those who are outside of Afghanistan, they're in transit status. They're in third countries. They're displaced. They're vulnerable. They need a home. And this is where Canada can lead, as we have done in so many instances in the past, including with Operation Syrian Refugee. But with regards to those Afghans who remain in Afghanistan, we are in constant contact with them. We are providing them with the best possible advice that we can when it comes to where they should go, when they should go, and most critically, providing them with the visas that they need, which provides a clear and strong language that they should be granted safe passage to resettle to Canada. That is work that is going on day and night. So while we continue to now implement this important agreement with the United States, we are also focussed on those Afghan nationals who remain in Afghanistan. And we're going to continue that work as well.

PA: But I mean, the best possible advice you're talking about, about where they should go and when they should go, that... that hasn't worked. We... we spoke recently with a guy named Samandar Khan, who's an Afghan, a journalist in Kabul. And last week, he says the Canadian government told his family to travel to the airport immediately. They were told to go to Camp Baron, find a meeting point underneath this Canadian flag, and wait for further instructions. But those instructions never came. And despite Canada issuing his family visas, they never got through to the airport. They never got onto a flight to Canada. And this is a guy who had other options, Minister. He could have gone through this process with Germany or Ireland. Just I'd like you to take a listen to what he told us.

SOUNDCLIP

SAMANDAR KHAN: You know, we had chances. We had chances. My family had chances to go. We rejected that because we... my family and my relatives, they wanted us to... to go to Canada because we have processed our documents. So we... we lost other chances, and we are in danger now.

PA: So what do you say to people like him who are left behind in Afghanistan and feel the Canadian government has left them behind?

MM: It's distressing to hear that. And obviously, we want to make sure that we can do whatever is within our means and capabilities to provide him with support. And as I said, we're remaining in contact through emails and hotlines. And I just want to say that the real impediment to getting people out is the violence and the volatility. As you heard from the gentleman himself, he had those visas in hand. And so what we're doing is we're working with regional partners to make sure that our expectations are made abundantly clear to the Taliban. And over the course of this past weekend, I think that we've seen some progress in that they have provided some preliminary assurances that they will respect safe passage rights. So as the dust settles and now the coalition has withdrawn, critical services like the airport will eventually have to resume. And when that happens, we want to be sure that all of the people that have applied and are eligible under our programs have the clear paperwork they need. The process is not the impediment. It's the volatility and the unpredictability on the ground. And we're working around that by staying in contact, providing as much support as we can to the Afghans. And again, our cooperation with the United States is an important way where... where in which we're also simultaneously advancing our humanitarian resettlement program.

PA: You know, I think we all read the story in the Globe and Mail by Mark MacKinnon, who coordinated safe passage for some, including a military interpreter that worked with the Canadian military, coordinated, safe passage for them through Ukraine's military to get them onto the base and onto a flight out. How did it feel to see a private civilian and a foreign military taking action that I think most people would have assumed would be done by the Canadian government?

MM: Well, just to be clear, the Canadian Armed Forces took extraordinary action. And I would just say that they performed in very difficult circumstances with great bravery and valour. And that's... and that's... that effort, that incredible effort has been seen in 3,700 getting out. But look, I commend the efforts of others who stepped up. I think it's great when we see Canadians who... who are all united in the common cause to try and get Afghans out. We're grateful to Ukraine for having facilitated the resettlement of these Afghan nationals who... who have supported journalism and free press. That's why I announced as minister the pathway to protect human rights defenders, including journalists. We believe that it's important not only that we provide humanitarian resettlement opportunities but that there is an accounting of what is going on on the ground. So this is going to be not only a whole of government response, it's going to take all Canadians. And the responses that I'm getting from businesses, from NGOs, from settlement service organizations, from ordinary Canadians who are writing us day in and day out, offering their homes and their hearts is how Canada is going to lead. It's been a really, really tough time for the people of Afghanistan. These past few weeks are indescribably painful, but we are going to be there to support them as much as we can.

PA: All right, Minister, I'll leave it there. But thank you for speaking with us today.

MM: Thank you very much for having me.

CH: Marco Mendicino is Canada's Minister for Immigration and Refugees. We reached him in Toronto.

[music: sad piano]

Hurricane Ida Damage

Guest: Todd Terrell

CH: The scenes in Louisiana right now are eerily familiar. On Sunday, a Category 4 hurricane hit New Orleans and the surrounding area. Hurricane Ida destroyed homes and snapped power lines -- leaving a million homes and businesses without water. Now, the people of Louisiana are digging themselves out -- and taking stock of the damage. Todd Terrell is the founder and president of the United Cajun Navy, a group of rescue volunteers. He's in Baton Rouge.

PA: Todd, what kind of damage are you seeing in Baton Rouge and the surrounding areas?

TODD TERRELL: Here in Baton Rouge, we survived pretty good. You know, there's just some minor trees down and stuff. But as you move further east, getting closer to Hammond and Slidell, it's pretty bad. They had a fair amount of flooding, but trees down everywhere, roofs off. As you move further south, you know, when you get into the south shore of New Orleans, it's just bad. Kenner, Metairie, it's levelled. LaPlace, a lot, a lot of flooding. Moving further south from there, you know, getting into the Houma area. Houma was just devastated. Further on, south Chauvin, Golden Meadow, all the way into Grand Isle, just... just total devastation down there. So supplies of oil and gas are real scarce right now down here.

PA: Right.

TT: Power's out still. It's pretty bad. It's reminiscent of Hurricane Katrina and Hurricane Harvey.

PA: It is?! It's that bad?!

TT: Yes, it's pretty bad. They're already likening it to the worst storm that we've ever seen in the country.

PA: Now, I mean, this is what the Cajun Navy does. And... and thank you for it. I wonder, though, in thinking about preparations, the speed with which this storm came in was extraordinary. Was there anything that people could have done or that that towns, municipalities could have done to... to really be prepared for this hurricane?

TT: You know, that's a good question. First of all, the storm came in as a Category 4. This question is about where there was a 5 or not, that... that really doesn't matter at this point. But the real nature of that storm kept it a Category 4 for six hours. You know, 20/20 hindsight, armchair, Monday morning quarterbacking. Some people should have got out that were in lower-lying areas. Reality is for a Category 4 to stay a Category 4 for six hours, there's not a lot a whole lot of people could do. You know, then, you know, you got COVID going on right now. You know, a lot of places were closed and a lot of places, you know, are doing different things. And in logistics, you know, people don't have funds to be able to go stay in a hotel. A lot of them, last-minute, couldn't find a hotel. So this is just, unfortunately, the nature of living in south Louisiana or along the Gulf Coast. You know, you put yourself at risk.

PA: You describe these scenes in Houma and in some of the harder-hit areas. What kind of rescue missions have you and your team had to do?

TT: Well, Sunday night and starting Sunday evening was pretty dire. We were getting calls in on some of our communication channels, even including some of the 911 communities that give us their calls. I've never heard that much desperation on such a big level. People's roofs were getting ripped off while they were on the phone with us. And, you know, then it went dead. You know, the phone line just went dead. So, fortunately, the majority of the people that we were on the phone with survived. They, you know, we were telling them, get a mattress and get in the centre of the room. Or get in the tub. It's been a long time, and I don't think I've ever personally told somebody to do that on a level that we did. Now, the other thing was, you know, there's nowhere for these people to go. And that's a big problem. We're starting to see it today as power in Baton Rouge comes on, and a lot of the gas stations are getting their power back. The lines are just long. There was a two-mile-long line at a convenience store this morning just to go in and get... get food, you know, a bag of chips or something. So this is going to be something that we and the country is dealing with for many, many years.

PA: And, you know, as you say, with nowhere to go, people are stuck at home, homes that are sometimes in... in dangerous condition. What are these people need now today as your teams are out there dealing with them?

TT: You know, we've been doing this for a long time. And, you know, day one of a disaster, people just need a bottle of water. They're not worried about eating or snacks or whatever. You know, as you get, you know, further on down the line, the need kind of changes right now, you know, water, tarps, snacks, baby food, baby diapers, those are the critical things. But, you know, just basic essentials. You know, when you see that somebody just needs a bottle of water, you know, that's pretty dire.

PA: And how... just how hot is it in Louisiana today?

TT: Well, yesterday wasn't too bad. The last two days wasn't too bad. Today, as the system got out of here and, you know, the moisture in the ground started to evaporate, it is pretty hot. I think the temperature is about 94, 95, and the humidity is running in the high 80, you know, early 90 per cent. It's just muggy, and it's bad. And one thing that we're not even talking about is COVID. You know, Louisiana was one of the states that led the nation with COVID. And, you know, fortunately, unfortunately, for whatever it's worth, nobody checked temperature or nobody checked, you know, vaccine cards or anything. We just had to rescue people.

PA: Any idea when the power will be back on?

TT: I think in Baton Rouge, which was not affected as much, we're looking at two to three weeks. I think New Orleans, we're looking at 30 days plus. I mean, the word this morning was 60-plus days.

PA: Right, my goodness. And I mean, I know you... you do this work, and you've done it before. But on a personal note, how are you, and how's your team? Are you getting any sleep? You guys taking care of each other?

TT: You know, me personally, I'm struggling a little bit. This was kind of the anniversary of Katrina when we all suffered some big losses. It's kind of crazy. I had foot surgery a month and a half ago. And I've been off my foot for six weeks. And they took the stitches out, and they said a week off of it. And I didn't, So my foot’s about the size of a watermelon. So what's crazy is we've got a lot of volunteers that came in that are medics and stuff. So they've been kind of taking care of me. Our volunteers, we have a lot of veterans, a lot of veterans, and they want to do something. A lot of veterans are kind of perturbed with the way the country is going. So they're here to help. And it's really... it really shows that the country, we have a will to survive. And in Louisiana, we're resilient. You know, right now, I always said that this is God's way of making people work together because we don't think about COVID. We don't think about crime. We just think about helping each other. And that's what we're doing.

PA: Well, keep at it and do take care of yourself, especially take care of that foot, Todd.

TT: Yeah, I appreciate it. But, you know, we'll deal with the consequences later. [chuckling]

PA: Fair enough. All right. Well, thank you for your work and thanks for speaking to us today.

TT: Thank you.

CH: Todd Terrell is the founder and president of the United Cajun Navy. We reached him in Baton Rouge, Louisiana. And you can find more on that story on our webpage: www.cbc.ca/aih.

[music: horns]

Maud Lewis Painting

Guest: Sue Corbett

CH: For years, John and Sue Corbett hung a painting of the coastal scene in their home with pride. And if people asked, they'd tell them it was painted by Canadian artist Maud Lewis. But now, the Corbetts say their beloved painting is a fraud. The red flags started to appear after they went to get the piece appraised recently. And according to one expert, this is hardly the only case of a fake Maud Lewis artwork. We reached Sue Corbett in Brookside, Nova Scotia.

PA: Ms. Corbett, when you think about this painting now, how does it make you feel?

SUE CORBETT: Very discouraged. I'm sad. I'm not happy at all about the situation.

PA: Is there any part of you that still thinks maybe, just maybe somehow, this thing might still be real?

SC: If it hadn't been looked at by some experts, I would hold out hope. But no, since we found out that it's not likely to be real, we've looked at other pictures in books and have seen what those individuals had said about where it could be not right.

PA: Right. Can you give me some examples of that?

SC: Yeah, sure. Apparently, Maud's horizons were very straight. And the one we have is more like one would... you know, lumpy horizon... lumpy is not a good word, but I'm not an artist.

PA: [chuckling] That's a pretty good word.

SC: the houses... the roofs on the houses, they said, were solid colours. Ours is not. There's a difference in the birds. Apparently, Maud made the feet and the beaks on the birds black. This is not black. So those little things.

PA: And until the experts had pointed this out, did you ever have moment to doubt that it was authentic?

SC: Absolutely not. Because it came from a place that said they were appraisers. So one assumes, and you know what happens when one assumes.

PA: [chuckling] Well, so take me back here. Let's start in 2005. What made you and your husband want to buy this piece in the first place?

SC: We're from Nova Scotia. I grew up in the valley, where we often heard of Maud Lewis. My mother had two paintings that she had bought directly from her, and they were hanging in my bedroom. I've always wanted one. And I was looking at an online auction one day from a company in Calgary, and they had two Maud Lewis'. So I spoke with my husband, and we agreed that we would buy one.

PA: And what did you... what did you pay for it then?

SC: The total amount was about 5,500 dollars.

PA: So, like a lot of money. This was an investment?

SC: A lot of money back 16 years ago.

PA: A lot of money now.

SC: I mean, they're worth a lot more now.

PA: Right.

SC: But, yeah.

PA: And where did you have the painting? Was it prominently in your house?

SC: Yes, in Mississauga, where we lived for several years, it was something that we displayed and... and bragged about because she was from Nova Scotia.

PA: Right.

SC: Here, it was more in an intimate place.

PA: Where is it now?

SC: [laughing] Sitting on the kitchen table because I was describing it to you. It's not hung back up again. We haven't put it back up. And I don't know that we will.

PA: Walk me through how it ended up getting assessed by the experts back when you did that?

SC: Well, we're both in our 70s and looking at the future. We're trying to figure out how much things are worth for our children in an estate. So we took it into Ian Muncaster, in Halifax, at the Zwicker Gallery, along with a couple of other pieces. And he said that he didn't think it was real. And then he called in a couple of experts, and they discovered that although that can't say it's a fake because, as they say, they weren't there when it was painted. They are very, very suspicious.

PA: When... when you... when you're told... you're just trying to get this assessed for bookkeeping reasons and he comes back with this kind of an answer, what went through your mind?

SC: My stomach dropped. I mean, I... I... I was devastated. We both were. We could not believe that we had bought something that was probably a fake. And Ian went on to tell us that there's a painter in Halifax that's done probably over a thousand of these, but they haven't been able to do anything because they can't catch him putting the name Maud Lewis on his paintings.

PA: Oh my!

SC: So there are a lot of fakes out there.

PA: Now, you bought this through, you said, an auction house in Calgary. Did you reach out to them? They sent you a letter, I think. Right?

SC: We reached out to them. They said they had no paperwork. We have all the paperwork that was involved with our purchase. And my husband sent them a note. And they said that we had in small print 14 days in which to have it authenticated, and they won't do anything.

PA: They sent you... in that letter, they said, quote, I think our obligations for the sale have long since passed. I'm sorry that you have... that after all these years, you have found it to be something other than what you thought you had purchased.

SC: That's right.

PA: How does that make you feel?

SC: Disappointed in them. But as my husband says, they have an obligation to be aware of what's real and what's a fake. And duty of care is the way he puts it. And he feels very strongly that something needs to be done in the industry to make sure that people like us don't have this situation happen.

PA: You know, I've seen a picture of it, and it's a lovely little painting. And if you had never checked, you'd still have it on your wall and walk by it every day and enjoy it and derive great joy from it. Is there any part of you that can reconcile with this painting and still derive some of that joy? Or is it... is it ruined?

SC: No, my grandson did a Maud Lewis painting in his art class in high school because he knew how much we liked Maud Lewis. And it's just a crayon painting of the famous car with the man and woman riding --

PA: Oh yeah, sure!

SC: Riding in the car. And... and I enjoy that far more than this. [PA chuckles] The mere fact that he did it for us to begin with, but that means a great deal more now than this did.

PA: Well, this must have just been an entirely frustrating process. And I'm really sorry I had to go through it. But... but I'm very grateful that you made time to speak with us today.

SC: I'm glad that you're showing an interest. And I want the public to be aware of what they have. And hopefully, they haven't fallen into the same pit we found ourselves.

PA: Indeed. Well, thanks for this.

SC: OK, take care.

CH: Sue Corbett now believes the Maud Lewis painting she bought over a decade ago is a fraud. We reached her in Brookside, Nova Scotia, west of Halifax.

[music: “Roadrunner” by Jonathan Richman and the Modern Lovers]

Jonathan Richman Not Real

CH: From 1976, this is Jonathan Richman and the Modern Lovers, with the classic "Roadrunner". Now, in the 45 years since, Jonathan Richman has following his idiosyncratic muse wherever it's taken him. The result is that you always know when you're hearing him. But apparently, you don't always know when you're talking to him.On Friday, the organizers of LoveOly Summer Fest in Olympia, Washington, made a sheepish announcement. Jonathan Richman would not be playing the festival on Saturday, as scheduled. Because the person they'd booked to play -- the person who'd called them up and offered to play -- was not, as he'd said, Jonathan Richman. Given the weirdness of the scam -- someone pretending to be a 70-year-old cult musician -- no one really blames the organizers. Least of all Jonathan Richman himself, who wrote: "Hello everyone! This is the real Jonathan Richman! No hard feelings on my part and no apologies necessary... Did the guy who called you up manage to imitate my voice pretty good? Cuz if he did, you've got to hand it to him, most people can't do it!" It may be more that no one expected someone who wasn't Jonathan Richman to claim he was. And in retrospect, it's clear that the scammer was nothing more than a poor man's Richman.

[music: electronic]

Part 2: Encore: Carreyrou Theranos, Don Poynter Obit

Encore: Carreyrou Theranos

CH: Seven years ago, her company was valued at 10 billion dollars, and Elizabeth Holmes was on the cover of Fortune magazine. Now, Theranos is a cautionary tale -- and Elizabeth Holmes is about to go on trial. Jury selection in the case of the founder of the blood-testing start-up began today. Ms. Holmes was a young tech star who rose quickly and fell just as fast. After revelations that Theranos's supposedly ground-breaking technology didn't work as promised -- and that the company went to great lengths to keep that a secret -- Ms. Holmes was charged with multiple counts of fraud. John Carreyrou broke the story for The Wall Street Journal. Then he wrote a book called "Bad Blood: Secrets and Lies in a Silicon Valley Startup." He sat down for a feature conversation with Carol in 2018. Here's an encore presentation of that interview.

SOUNDCLIP

CO: Can you just start off by telling us what was the pitch that this company, Theranos, was making to the world?

JC: Right. Theranos was a company that was founded by a Stanford dropout named Elizabeth Holmes, and she claimed to have invented a portable device that could run the full range of lab tests off just a drop or two of blood pricked from the finger.

CO: And what would that be to replace? Why would that be something that the world would want?

JC: And in addition to being able to run the full range of tests from just a drop of blood from the finger she said — her pitch was that she could get the results very quickly at half or less of the prices that other laboratories offered. It would have been a great advance because, as you know, when you get your blood drawn usually they'll take several tubes — often as many as five tubes and they'll use the big hypodermic needle and a lot of people find that process unpleasant and avoid getting their blood drawn. And sometimes diseases and conditions get missed because people aren't getting their blood drawn and having lab tests as often as they should.

CO: And the company went even further to suggest that some point this could be something you have in your home like your thermometer, you could just do have your own blood tests, get yourself diagnosed and send a message to your doctor and you have a cure or some medication waiting for you.

JC: That's right. When she first dropped out of Stanford in 2003, Holmes had this idea for what she called a Thera-patch. It was sort of an arm band that had micro needles and the micro needles would draw your blood from your wrist and simultaneously diagnose whatever was ailing you and inject you with the appropriate drug. That vision proved a bit too futuristic and naive. So she quickly pivoted to something that she thought was more feasible, which was a cartridge and reader device. The reader was sort of like toaster-sized and it was a system that you could have in your home. And she idolized Steve Jobs and Apple and she wanted the Theranos blood testing device to eventually be in everyone's home and be ubiquitous just like Apple devices —iPhones and iPads and iPods.

CO: She, this Stanford dropout Elizabeth Holmes — absolute compelling personality. Her face many people have seen gracing the covers of all the big magazines and business publications. Who is she?

JC: She is — well now she's about 34 years old, at the time when she dropped out of Stanford, she was 19. She had barely completed a-year-and-a-half of her undergraduate studies. So she had no training to speak of in medicine or really in science but she was very ambitious. From an early age she wanted to be a successful entrepreneur. Like I said, she idolized Steve Jobs, and by sheer force of will and hard work she convinced a lot of people to fund her, and over the years developed three iterations of a Theranos blood testing device. And by the time she rolled out her blood test commercially in Walgreen’s stores and in the fall of 2013, she was now 30 years old and she became an instant star. And, like you said, graced the covers of Fortune Magazine, was profiled in The New Yorker, became a fixture at conferences and on television and her company in its last round of funding garnered a valuation of more than $9 billion. She had managed to keep half or more of the shares of her company so that effectively gave her a net worth four $4.5 billion dollars and made her the world's youngest female self-made billionaire.

CO: She modeled herself on Steve Jobs, as you mentioned. How did she do that?

JC: Well, she started wearing a black turtleneck around 2006. And, of course, that was the trademark outfit that Steve Jobs made famous. She also liked to drive around in a car without license plates, which is something that Steve Jobs also did. She implemented in Theranos a culture of absolute secrecy and that was also in part because it's something that that Apple was famous for. She had hired Chiat/Day, the advertising firm, and she hired them because they had worked on some famous Apple advertising campaigns. So really the mythology of Steve Jobs and of Apple really was there throughout her 12-year rise. It really was an obsession.

CO: But that magic, that sort of cult of personality that she created, attracted a lot of high profile, very impressive people. I'm looking at how you describe her board of directors — George Shultz, Henry Kissinger, Secretary of Defense James Mathis. How did she manage to bring all those people into her orbit?

JC: You're right. Her board was filled with larger than life personalities, legendary former statesmen like Secretary of State George Shultz, who crafted the Reagan administration's foreign policy and is credited by many with defeating the Soviet Union and ending the Cold War. How did she get all these people on her board? Well, she was introduced to George Shultz by someone at Stanford in 2011 and George Shultz is someone who has always been very passionate about science. And he was won over by Elizabeth's vision and her charisma and he quickly joined her board. And after that he introduced her to many of his colleagues at the Hoover Institution, which is the conservative think tank that is headquartered right on the Stanford campus. And that's how she was able to meet Henry Kissinger and people like Sam Nunn and Bill Frist and Admiral Roughead and all of these people gradually became Theranos directors and she lured them with grants of stock. Of course the stock at one point was worth a lot of money because Theranos reached a valuation of almost $10 billion.

CO: You are listening to As It Happens. I have John Carreyrou in the New York studio. Ee're talking about his fascinating book Bad Blood: Secrets and Lies in a Silicon Valley Startup. John, your book — well first your articles that you wrote for The Wall Street Journal and then ultimately this book — you begin with an anecdote about the company's onetime chief financial officer Henry Mosley. What did he discover about the early Theranos system that began to tweak his curiosity and his concerns?

JC: Right. In November of 2006, So Theranos by then was about a 3-year-old company, he started getting a sense that a demonstration that Elizabeth had given to Novartis, the giant Swiss drug maker, had not gone well because employees who had acompanied Elizabeth on the demo looked outright downcast when they got back to Palo Alto. So he started asking questions and eventually that day Elizabeth Holmes’ co-founder a person by the name of Shaunak Roy, who had worked with Elizabeth in the Stanford professor Channing Robertson's Lab at Stanford, came clean to the CFO that actually the demos weren't entirely real, that the result that they showed prospective investors who came by for the demos were pre-recorded because the system didn't always work and, in fact, often malfunctioned. And so they had recorded one result and that's what they showed. And he realized at that point that he had been bringing around investors for months and that they were being misled. And so he confronted Elizabeth that day in her office and told her ‘We need to stop misleading investors. We need to stop doing these demos if they're not totally real.’ And at that point she turned icy and told him that he was not a team player and fired him on the spot.

CO: He only knew that because he was he hearing it from people in the company that he was building this case. Others were hearing it or suspecting. What did you hear from other employees about what their suspicions were and why they didn't raise the alarm?

JC: Right, well the history of Theranos is one — and by the way we're now 15 years into it — is a history of tremendous turnover. Elizabeth fired people all the time. And you also had along the way quite a few people who left because they had qualms. The problem was that Theranos made everyone sign non-disclosure agreements and there was an unspoken and sometimes even spoken threat of litigation if anyone spoke up. So that's how the secret that this company was a house of cards got kept for so long. And when the company eventually commercialized its blood tests in the fall of 2013, even one of Theranos’ directors grandsons, who was working at the company at the time — and that was none other than Tyler Schultz, the grandson of the former Secretary of State George Shultz — tried to raise his concerns internally with Elizabeth and her boyfriend Sunny Balwani, who was the number two at the company, and he was rebuffed and threatened and he had to leave the company quietly. And I later made contact with Tyler about a year later and he was one of the whistleblowers who helped me expose the scandal.

CO: But as you point out, I mean, Silicon Valley is full of young people, idealistic people who see themselves above capitalism. They're trying to change the world. They think they're on a mission. It's a very zealous place. And so how come nobody blew the whistle? How come those who have little bits and pieces of this — some had larger pieces than others — why did they never expose Elizabeth Holmes?

JC: Well, this was a company that had an almost $10 billion valuation that raised almost a billion dollars from investors. It had very deep pockets. Its CEO and the COO were very intimidating and threatening, and it was very well known that they would not hesitate to go after employees who spoke up. And those threats were backed up in the person of David Boies, who is arguably America's most famous lawyer. He was the outside counsel for the company starting in 2011, eventually came to become a de facto board member in 2013 attending all the board meetings of the company. David Boies was a scarecrow that put the fear of God in many employees. They felt that if they were to go public with their concerns that David Boies and his henchmen would come after them.

CO: There's one man that you talk about, a scientist Ian Gibbons, a very a sad case of somebody who was working with Elizabeth Holmes had his concerns and died. Can you tell us about him and what happened to him?

JC: So Ian was probably the first legitimate scientist that Elizabeth hired in 2005 and he helped Theranos develop its blood tests. He had worked at several diagnostics companies over the years and Theranos is a company that he joined when he was in his late 50s. So he was at toward the end of his career and he eventually developed qualms because he realized that the diagnostic boxes that Theranos was working on were not reliable. And he also came to distrust Elizabeth and felt she was dishonest and he was also, at one point, demoted because he tried to blow the whistle on the way she was running the company to his old friend Channing Robertson, the Stanford professor who had helped Elizabeth launch her company and who was her mentor. And Channing Robertson told Elizabeth everything Ian had said, so in 2010 Elizabeth fired Ian. He was rehired the next day because a lot of his colleagues lobbied Elizabeth to rehire him, but he wasn't hired in the same capacity, he was effectively demoted. And so that blow to his pride in his career triggered the beginning of a depression, along with the fact that the company was claiming things about its systems capabilities that he felt weren't true. And eventually his depression got worse and worse and unfortunately, he committed suicide in the spring of 2013.

CO: And his widow was a very good source for you, telling you what it was like — what had been like for Ian Gibbons to be working for Theranos and for Elizabeth Holmes. What did she tell you?

JC: So I met her for the first time in the early summer of 2015, a few months before my first story came out, and she was still very much grieving Ian. I met her at a restaurant in Palo Alto and she had tears in her eyes and she felt that none of this would have happened if Ian had not worked at Theranos. She didn't know the particulars of the technological problems that Theranos was having because Ian had been prevented from going into that with her because of the NDA he had signed. But she knew, because he had told her so, that things weren't working, that the technology wasn't working. She also knew that the culture, the corporate culture at Theranos was one of fear, paranoia and secrecy.

CO: Despite such tragedies and despite all the people who had their doubts and concerned this company kept on and the though the technology was certainly not up to snuff Theranos managed to partner with the U.S. drugstore chain Walgreens. What was the deal? What did they partner to do in the Walgreen chain?

JC: Right. So the idea was they were going to do a pilot launch first in about 45 stores, a couple in California and the rest in the Phoenix area, and then they were going to expand Theranos’ finger stick blood testing services to all of Walgreens stores, which meant expanding to more than 8,000 stores through the U.S. And Theranos services would be offered in these wellness centres within the Walgreens stores. And Walgreens customers would go in and get their fingers pricked and then get results, supposedly within a half-hour and at a fraction of the prices of traditional laboratories.

CO: And did it work for anybody?

JC: Well, behind the scenes what was actually happening is Theranos was using one of its devices, the Edison, which was the second to last iteration of its technology, for only a few finger stick tests, between a half dozen and a dozen. And the rest of the more than 240 blood tests on its menus were actually performed on modified Siemens machines. So the Siemens machines were hacked by Theranos employees and modified so that they could accommodate tiny fingers stick samples and they did that mostly by diluting the blood samples to create more volume so that the Siemens machines could accommodate those samples. But, of course, diluting the blood created problems because the blood as part of the Siemens machines protocol would already get diluted within the Siemens machine. So this meant an additional pre-dilution step. And when you're diluting blood twice you're tampering with the sample and creating more room for error. The other problem was that when you were pre-diluting the blood you were taking the concentration of the analytes in the blood you were trying to measure down to levels that were below the allowed measurement range for these Siemens machines. So it was essentially an unauthorized experiment and Siemens itself didn't even know that Theranos was doing this with its machines and regulators certainly didn't either. And this resulted in inaccurate results and the results that were performed — that were obtained from the Edison for the few tests that the Edison put out, were also inaccurate because those machines were unreliable. So in the end Theranos had to void or correct almost a million blood test results in Arizona and California.

CO: And were people harmed by this? Did they get misdiagnosed and have any consequences?

JC: It's really difficult to measure the harm, but I certainly came across more than a dozen instances of patients who got questionable test results back from Theranos and had health scares or had unnecessary medical treatments. Some patients have banded together in a putative class action in federal court in Arizona alleging that Theranos committed consumer fraud and medical battery. And one of those consumers who sued alleges that a Theranos blood test failed to detect his heart disease. And that as a result the heart attack that he subsequently suffered, could have been, and was not prevented.

CO: You are listening to my conversation with John Carreyrou, who is the author of Bad Blood: Secrets and Lies in Silicon Valley. And you're listening to As It Happens. John, you began to investigate, you approached Theranos to find out what they're up to. This is late summer and fall of 2015. How did Theranos react when they knew that you were questioning the system and what they were selling?

JC: I actually approached them — or they approached me they found out that I was talking to a lot of people and so they hired a an outside PR person to approach me in late April of 2015 and I would say that for the first two months the company gave me the runaround. I think that it hoped that I would just go away and in the meantime Elizabeth kept giving interviews to magazines and making appearances on TV, it seemed like I was the only reporter in America that she wouldn't talk to. So I finally told the PR person that they had to address my questions, that we had to meet and they couldn't just ignore me. So what did the company do at that point? It sent lawyers led by David Boies to the midtown Manhattan newsroom of The Wall Street Journal. And Boies and these lawyers met with us for five hours in June of 2015 and were threatening and told us that I had misappropriated Theranos trade secrets, that had to essentially cease and desist and either destroy them or return them. And it was made very clear to us that if we proceeded with the story we would be sued. Over the ensuing weeks Theranos was able to figure out who some of my sources were, including Tyler Schultz's identity, and went and threatened these sources and, I'm convinced, had them surveiled by private investigators. And one of the most shocking episodes is described in the book in chapter 20 of the book, is the ordeal that the company and David Boies’ his law firm put Tyler Schultz through.

CO: At some point Elizabeth Holmes had to actually address her staff — what she thought of these articles you were writing, your publications — how she was going to defend it. Do you know what happened when she actually addressed the staff?

JC: Yes, when the first story that I wrote came out she was in Boston. So she did an interview on CNBC’s Mad Money program, in which she essentially denied my article, and then flew back to California the next day held an all-employee meeting in the cafeteria of Theranos’ Palo Alto headquarters and told employees that the story was inaccurate and false and seeded by disgruntled employees and competitors and said that she would take on the Wall Street Journal and the reporter. Toward the end of that meeting Sunny Balwani, who is number two at the company and Elizabeth's boyfriend, led employees in an “F You” chant. They were saying “F you, Carreyrou.”

CO: So have you ever seen it get personal like that before in your investigations?

JC: I've been doing this for more than 20 years and I've certainly experienced instances where there was pushback but never anything of this scale. I mean, having sources followed and intimidated and having essentially a scorched earth campaign waged against me, my newspaper and my sources, is something that I had not experienced before.

CO: How did the Wall Street Journal respond to this? Because there was one issue that came up you learned, that well Rupert Murdoch, who owns the Wall Street Journal, was actually an investor of Theranos.

JC: Right. And I actually didn't know that before we published my first story. I heard rumors and I only got confirmation that Rupert Murdoch had invested in Theranos a year after my first story was published in October of 2016, at which point we found out that his investment was actually enormous. He had been the single biggest investor in Theranos. He had put a $125 million dollars in the company. And it was quite a surprise and a shock for me when I learned that.

CO: Elizabeth Holmes attempted to pressure him to shut down your investigation?

JC: Right. And I learned that subsequently when I went on book leave, I learned that she met with him four times before my first story was published, including once in his office on the eighth floor of the News Corp building just two weeks before my story was published and I was on the fifth floor just three floors below. And I had no idea she was in the building.

CO: Elizabeth Holmes has said that she was — in response to all this — she's devastated by deficiencies in her lab and she has settled with the Securities and Exchange Commission in the U.S. on charges of overseeing massive fraud. But has Elizabeth Holmes ever admitted she did anything wrong?

JC: Never. She did use the word devastated, but she didn't admit to having done anything wrong and she never apologized to the patients that she put in harm's way or to investors for that matter.

CO: Have you ever had a chance to interview her?

JC: Never. I tried to interview her for five-and-a-half months before my first story was published. I went back and sought interviews again over the next two, three years, including for the book, and she never agreed to speak to me.

CO: And your book isn't just about her — it's principally about her and this company — but it's also about Silicon Valley and its culture and this sort of cult of personality that exists there. How everything has a bit of a bit of fairy dust on top of it that people follow that very, very important people, smart people will go into investments with seems like, with their eyes half shut. So what do you make of that? What did you earn about the culture of Silicon Valley in the course of the investigation?

JC: There's a lot of innovation, for sure, going on in Silicon Valley, but there's also a lot of pretending, there's a lot of hubris and arrogance and Theranos was a story of fraud but also of hubris and arrogance. And the front man — or front woman rather — for the fraud was Elizabeth and she had this incredible charisma. She was also very smart and she had this ability to make people suspend disbelief. As I said, her idol was Steve Jobs, and she shared with Steve Jobs this trait, which was that she had a reality distortion field. She's able to cast a spell on people and to really get them excited and enamored with the vision that she's articulating, to the point where they forget to ask, ‘Are you really able to do this?’ ‘And if you are, can you walk me through how exactly it works and how you were able to solve these problems that thousands of researchers in academia and industry have been unable to solve for the past 20 years?’

CO: But if you hadn't done your investigation, if your investigative nose hadn't twitched at some point, I mean, a lot of people were invested in this — a lot of agencies that should have been on top of this, a lot of levels government that should have been alerted. This isn't like making an app for something that's just going to make your life more fun. This would affect people's health. How do you think it was able to bypass so many checks?

JC: Well, I mean, some parts of this story are almost incomprehensible. How did Walgreens, Theranos’ main retail partner, not do sufficient due diligence and figure out that the Theranos device was but a malfunctioning prototype? Walgreens actually hired a consultant very early on. His name is Kevin Hunter and he sniffed out that things were not right during visits at Theranos in Palo Alto and also during meetings that the two companies had. And he tried to warn people at Walgreens that this was going to end badly and Elizabeth and Sunny Balwani were able to get him marginalized by telling Walgreens that they didn't want him to participate in the weekly video conference calls and that they didn't want him to be in the in-person meetings anymore. And so he continued to work for Walgreens, but he was held at arm's length and not allowed to do his job. As far as the regulators are concerned, Elizabeth Theranos exploited a loophole between two agencies. And Elizabeth was able to capitalize on that ‘no man's land.’

CO: So at this point where — does Theranos still exist as a company?

JC: Theranos still exists. Elizabeth laid off another 100 employees about a month ago so the head count is now down to about 20 employees. And she announced to investors in an e-mail that the cash of the company was going to go beneath $3 million in late July. And at that point the covenant's of a loan agreement with the private equity firm Fortress would allow Fortress to seize the assets and to liquidate them. So it seems very clear that Theranos is going to be liquidated by August and will cease to exist. Then the other thing to keep an eye on is that there's a criminal investigation that's been conducted for more than two years now by the U.S. attorney's office in San Francisco. And my sources tell me that that investigation is nearing its conclusion and that indictments of Elizabeth Holmes and Sunny Balwani are a distinct possibility.

CO: John it’s a remarkable story and I’m glad that you could — the Wall Street Journal gave you the ability to do this kind of investigation, very important. And thank you for speaking with us.

JC: Thank you so much for having me.

CH: From 2018, Carol's interview with John Carreyou -- author of "Bad Blood: Secrets and Lies in a Silicon Valley Startup". Elizabeth Holmes's trial begins next week. Jury selection began today. You can find that interview on our website: www.cbc.ca/aih.

[music: ambient]

Don Poynter Obit

CH: If you're a fan of whiskey-flavored toothpaste or golf balls that can crawl across a putting green toward the hole -- and who isn't -- then whether you know it or not, you're also a fan of Don Poynter.

SOUNDCLIP

DON POYNTER: One day I was with the agency and I'm driving down the street and I said, you know what would be funny? Why not have whiskey-flavoured toothpaste? Hey, that's pretty neat. So I... I told a lot of my friends about that and they all laughed. Hey, that’d be a great idea. So then later on, I came back to them and I said, would you like to invest in it? Oh no, we don't want to invest it. And so I had a fraternity brother. He worked for the Central Bank -- Central Trust. So I went in to him and I said, hey, I have this idea and I need 10,000 dollars. Well, 10,000 dollars was a lot of money in those days, but he was a fraternity friend. And hey, after all, we've got to help each other. So he gives me 10,000 dollars to start this thing. And his father asked him one day, what does Poynter want this money for? He says, oh, he wants to make whiskey-flavoured toothpaste. What!! He almost fired his son, but I took that to New York and they absolutely went wild.

CH: That was Don Poynter, talking to Cincinnati Public Radio several years ago. Mr. Poynter died this month at 96, leaving behind the knickknacks of a life devoted to the invention and sale of novelty items. Like The Talking Toilet -- which you stuck on a commode, and waited, giggling, for someone to sit down, at which point a voice would boom: "Move over, you're blocking the light!" Or one of Mr. Poynter's best-selling creations: The Little Black Box. Flip a switch and the small machine would shudder and whirr, as a disembodied hand reached up and turned off the switch. That's it. In an interview, Mr. Poynter recalled the confusion of trade show reps who, quote, "kept asking what it did. I said, 'It does absolutely nothing, except switch itself off.' Everyone thought I was crazy, but I sold it to Spencer Gifts. In one month, it became the hottest item they ever had." So, at least for him, the novelty never wore off.

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August 31, 2021 Episode Transcript

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