Former Safeway CEO says Theranos delays raised crimson flags


Former Theranos CEO Elizabeth Holmes arrives for a hearing in federal court in San Jose, California on July 17, 2019.

Stephen Lam | Reuters

SAN JOSE, CALIF. – Former Safeway CEO Steve Burd testified Wednesday in the Elizabeth Holmes trial, saying repeated delays in Theranos’ blood testing machine had raised red flags over his company’s failed multi-million dollar partnership with the healthcare startup.

“Deadlines continued to be missed and we were often not given an explanation,” Burd told the jury. “I kept asking, ‘Give me a few details here.’ So that was the frustrating part. We have always tried to help them as best we can. “

Burd’s testimony came the same day a juror on the trail revealed that she was having a hard time getting Holmes to jail, prompting the judge to excuse her from the case.

Safeway spent over $ 300 million in anticipation of blood testing technology building clinics in hundreds of its grocery stores. The idea of ​​the partnership was that “while you shop and before you go, get the results of this blood test,” said Burd.

Burd was Safeway’s CEO for two decades. He testified that he was initially charmed by Holmes and their vision of making blood testing technology cheaper and faster for their customers.

“I was very impressed,” said Burd. “There are very few people I have met in the industry who I would say are charismatic. She was charismatic, she was very smart, and she did one of the hardest things to do in a company can, and that is, starting a business from scratch. “

Former Theranos CEO is battling 12 wire fraud cases and conspiracy to commit wire fraud. Federal prosecutors accuse Holmes and her top manager Ramesh “Sunny” Balwani of having been involved in a multi-million dollar scheme to defraud investors and patients. Holmes and Balwani have pleaded not guilty.

Burd testified that he saw the partnership with Theranos as an opportunity for Safeway to expand into the health world. However, repeated delays at the MiniLabs, Theranos’ blood testing device, have raised red flags.

Burd testified that Holmes demonstrated the device at a board meeting. You performed a prostate antigen test on a board member. Burd recalled that “blood was drawn, it went into the machine, and we never got a result.”

Burd also testified that Holmes never told him she had a romantic relationship with Balwani.

“It just begs the question of what else is hidden,” said Burd.

“It’s really difficult for me,” says juror

Burd’s testimony followed the judge who excused juror # 4. The jury said she was a Buddhist and expressed significant concern and concern about the subject of punishment.

“It’s really hard for me,” the juror told the judge. “I think about what happened when she has to be there for a long, long time. It’s my fault and I feel guilty. ”The judge said she believed in love, compassion and forgiveness.

“Your responsibility as a juror is to only decide the facts of the case, you must not set any penalty at all,” said US District Court judge Edward Davila. “That has to be decided by the court. It is not your decision.”

NBC News legal analyst Danny Cevallos said it was “incredibly rare” for a juror to be excused for showing overwhelming compassion for a defendant.

“Maybe we should have seen this coming,” said Cevallos. “After all, Elizabeth Holmes has successfully charmed some of the most distinguished and respected personalities, including Henry Kissinger, George Shultz, and James Mattis. What is most astonishing is that she had this effect on the judges without saying a word, just sitting there at the defense table . “

This was the second juror to be excused from Holmes’ trial.

In September, Davila apologized to a 19-year-old woman about financial hardship. From the original five there are now three alternative jurors left.

Cevallos warned that losing too many alternate jurors could result in wrong trial.

“That would have been a wonderful judge for the defense,” said Cevallos. “I’m sure you are lamenting the loss of a juror who has developed an emotional bond with Elizabeth Holmes.”

Her second-in-command, Assistant Juror No. 2, expressed a similar discomfort after taking a seat on the main bench. The jury said they had concerns about how their role in deciding a judgment would affect Holmes’ future.

“She is so young,” said the juror, looking at Holmes. “I don’t know if I’m 100% ready to take part in something like this. Being English is not my first language, so I don’t know.”

Davila reminded the jury that in this case they would not be responsible for any possible punishment and a mixed jury is important. Federal prosecutors and defense attorneys for Holmes agreed that she can stay on the jury.


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