On the premiere episode of The Dropout, you'll meet a young Elizabeth Holmes. Convinced of her own destiny even as a young child, she would come to drop out of Stanford in her late teens, intending to mold herself after the great tech icons of our time. Her obsession with Steve Jobs -- down to his signature black turtlenecks -- would become particularly pronounced as she launched her company Theranos.
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
We are on the record at the beginning of media,
one volume one. This is the testimony of Elizabeth HANS going on the record in San Francisco. Nine o clock am July. Eleven two thousand this post
raise your right hand to swear to tolerate the whole treaty and nothing but the truth. I do that's the voice of Elizabeth HOMES, stirring reads the founder of Healthcare Company fair or knows, and once the world's youngest self made female billionaire testimony. Are your hearing her today perceptible she's, giving testimony under oath in the summer of twenty seventeen she sitting in what looks like an empty conference room for blonde hair, pulled back in a messy by her eyes or white and unblinking she sitting across from twelve attorneys
being grilled? Was the government investigates whether she helped orchestrate an elaborate years long fraud? Concerning that a number of tests weren't working on thoroughness devices,
I know that we made mistakes
not so long ago Elizabeth was silicon. Valley is rising star, a health care pioneer has been compared to visionaries, life bill Gates and Steve Jobs is more her face was plastered across magazine covers when she was on tv all the time. This is a revolutionary cognitive furnish, a change healthier, the same way that Amazon change region or indelible exhortation preparing or our boy- yes change this, although it could be that huge, her technology was poised to change health care forever. Do you want to know
about every element of your health was, he would say? Yes,.
Here she is being interviewed by Bill Clinton.
You found this company twelve years ago right,
tell him I'll you're.
don't worry about the future were in good hands,
for it was a who's who of government heavyweights. George Schulz General merits Henry Kissinger and
the most wealthy and connected people in the world invested millions. The divorce fairly, the walls,
family, Rupert Murdoch, even the craft families from the New England Patriots. You ve got
this really smart female
is going to do a wonderful thing for the world right. It is a great story
you wanted to work. We all want that to work, but Elizabeth is now under criminal indictment facing
twenty years in prison and her company once valued at nearly ten billion dollars, is now worthless. This is an investigation by the Securities and Exchange Commission
if there is to determine whether there are any violations of certain provisions of the federal securities laws, its story, greed and its
story of incredible deception. I think it's probably the most interesting fraud case. I've dealt with burning may often be second anyone
there are similar people. I think the verse and smart charming boys. I'm your host, Rebecca Jarvis
I've been covering business for more than a decade from the house,
then collapse to the fall of bare Stearns to the burning made off scandal. But no story comes close to the saga of Elizabeth HOMES. There was an off
romance. You ever tell investors that you had a romantic relationship
of dollars at stake. Everyone
who invested in parallels lost at all and an incredible tragedy.
I should have known that things were much wrong. Then they should have been in the next
examples. So it's my team, Taylor done Victoria Thomson and I travel the country
tracking down former thoroughness employees, patients board members and investors who got caught up with us
Psmith homes, it's just a moral
break down at the highest level, and I gotta be honest, even talking you guys now, there's still a parliament that has fear and will here
first time never before air testimony hundreds of hours worth condensed and added here for time, you'll hear from Alyssa
the partner sunny baldoni her brother
people at the centre of this story, as this defiant founder continues to this day
deny any wrong doing with this. Is what happens when you work to change things? First, they think you're crazy. Then they fight you,
then, all of a sudden, you change the world from ABC Radio in nine line. This is the dropout chapter, one myth making.
So much of this story is about a woman with stars in her eyes and a sense of her own destiny. But where did this sense of confidence come from in a college drop out with so little experience?
Elizabeth homes was nine years old. She wrote a letter to her father. What I really want
out of life she said is to discover
something new, something that mankind didn't know was possible to do. Elizabeth and each seven, according to a new Yorker profile, drew a complete design
for a time machine telling the writer years later. The wonderful thing about the way I was raised is that no one ever told me that I couldn't do those things a little.
It was born in Washington DC and nineteen. Eighty four
I'm no well used to be a policy aid on the hill and her dad Christian, worked at a number of government agencies and even briefly for Enron, the what celebrated energy giant which came crashing down in one of the greatest frauds in american history. It's hard to track down friends and family from
was early days willing to go on record, but we did talk to one former family friend who had a lot to say about those early years in Washington. This will, I think, was a family, but most things we seriously, I'm just gonna start by having you saying and spelling your name. My name is Sir Joseph joyously.
Each views up my ass Z, Joe Fuse as an attorney an inventor he's, the type a guy you can picture wearing a smart well cut suit. He
came to know their homes family when his dad and stepmom move next door in the late eighties. When did you first meet Elizabeth HOMES? I would have never twenty twenty some years ago,
plus she would have been no mumps eight to ten eight another year Elizabeth was the daughter of a good friend of my stepmother.
Are they were living in the washing DC at the time had been neighbours? At one point, Joe Stepmom, Lorraine and Elizabeth Manuel became fast friends. There was certainly go out as a as as a for some, but I think this is the real issue is principally between them. No well, my stepmom. How would you describe Mr
Mrs Homes, Elizabeth parents or dog could be a charming guy in a kind of wars.
Well mannered. Certainly, if you wanted to be
very charming guy, the Father would speak quite often about their lineage.
They really took that's the mantle of this family history very seriously indeed, but
he's a young
he's, probably where the lasted while begins. I think this was a restart receive EU. As is kind of dying out, christian homes is claimed, a famous seem to be his family ties to the flash been east fortune. It was a powerful come
funny with lots of money, but over generations the wealth had dried up and, according to Joe, that bothered Christian
you, I think he had a real sense of entitlement in terms of the traditional importance of his family that it sort of eroded over the years. I think the seeds of another
Elizabeth Grandiose vision or fantasy as it were, a business and I think
much connected to this paradise- lost, guided family mythology. You have to consider Jos opinions in this context. The families would come to have a major fall out years later, leading Elizabeth to sue Jos, Father Richard and his sons over a patent disputes which aeronauts later one, but most people who know the situation agree with Jos assessment. Here's Wall Street Journal reporter John Kerry. Real who's been covering the fair, no story for many years. What do you think it was about money back?
She was so attractive to and being incredibly wealthy. I think the parents very much yearned for those days of your when the family, you know was one of the richest in America and I think a Lisbon channels that at a young age, you know, there's an anecdote where she is
hundred ten years old and she is asked by relative the question that every boys and girls asked eventually, which is what are you,
what to do when you grow up and
she answers immediately. I wanna be a millionaire and the rest
of says: don't you wanna be president and she's?
No, the president will marry me because I have a billion dollars that
fierce ambition came out in school. Elizabeth was a top student. She ran track and studied Mandarin on the weekends. Here's how our honours physics, teacher Errol Turk, remembers her when I think of it was big homes. Biggest thing that comes to mind
is her points, and I remember when, when I had her in class, I remember just the way that she carried herself almost like a dancer, carries herself on stage with this kind of can do attitude Chin up, so she was always very composed and even when she had questions even when things were confusing, she just still had this kind of presents about that. I'm stuck out my my
from what you know of Elizabeth and high school. How would you describe her in one sentence.
She's, the kind of student that I could hand my car keys to and I knowed come back safe and with the tank full of gas.
Wow, how many students do you trust that way, not vary, but not very many
when it came to applying to College Elizabeth knew exactly where she wanted to go stand
for university in the heart of Silicon Valley, fella,
I regret to say no to see you so here we are on the sand for university campus sets that's correct. This is the medical. Is gardeners bent a professor of medicine here for more than thirty years, and she seen her share of talented students down she's got close cropped, Blondin, gray, hair, a warm personality and a sharp with us,
so policy, Alan Building right here right, prioritizing building reigned over their building David Packard, William Hewlett, Jewellery Yang you ever walked by these buildings with all of these names on them think wow. This is the epicenter I do. I do that this would have been Elizabeth homes further storm, dormer outbreak. Imagine coming as a student,
maybe one would be idyllic, has actually appeals for any ideas in this new environment. Elizabeth was full of big ideas.
What was your first meeting with Elizabeth HOMES, like so Elizabeth, was brought to me by a person who had been the former President Panasonic saying to me that she was this brilliant girl and she had this wonderful business idea.
The idea was simply that she was going to make micro forbidding patch to sample blood, to test for infectious organisms and then deliver antibiotics through the same Michael Fluidic channels. Now that's not possible because antibiotics or not potent- and I don't want to go into details, but I kept Sandridge,
I'm sorry that that doesn't work. The reason antibiotics hang over even bags of fluid when you're doing it. This way is because there are potent- and you can't put it through a micro, Fluidic Channel, so hadn t she respond to the criticism. Just kind of blinked arise and nodded left. It was just a site nineteen year old talking who taken when course
I go with eggs and she thought she was gonna make something so Elizabeth moved on to another member of the faculty highly respected. Well, like professor in the engineering school at Stanford, Channing Robertson, she took his class freshman year. All wired round for Turkey and Russia,
that's the way life is you're, gonna, be given problems in life and you're gonna be ok, go, sit, someplace, quiet and think about him and not have the stress of an exam. I did horrible here. He is speaking in a deposition about Meeting
Elizabeth. I first met her when she came to my office when she was a freshman at Stanford and I believe, as the fall of two thousand and two she
inquired or whether she can work in my lab Elizabeth took around
Thea dispatched that could test for disease and deliver medication and spent five days on a school vacation riding on a path, and even though this was all still theoretical, Channing was impressed. He believed in her, but Phyllis gardener had her doubts. He was her mentor and he was heavily involved in the company from day one at which point I became quite disappointed in him, and I've told him so twice
and what did he say? He's an affable enough guy who says it's going to work and everything's fine.
I introduced her to a couple of venture capitalists that I felt would sit down
chat with her about her vision, her aspirations, so Elizabeth homes convince you to become a directive, didn't take much convincing.
I was very trained by her vision.
I felt it would be a really interesting proposition to to be engaged with. She asked me if I would they honour board- and I said yes years-
their Robertson would tell Bloomberg Business Week magazine. I think there are people who are the Mozart's in the Beethoven,
then the Newton and the losses in the iron stones in the divinities who come along rarely in a generation or sets these people who become scientists and artists and musicians. I think, possess a very special capability. It was before
more and more clear to me that she had it. I was in the presence of somebody who is, unlike anything, that I had seen before.
Elizabeth dropped out just like Steve jobs to start her own company, it would come to be called era, knows a mix of therapy and diagnosis.
You started raising money, many of the traditional healthcare science venture capitalists past their world.
I M D Phds in that world and they didn't buy that Elizabeth idea could work, but a number of wealthy families warden millions like TIM Draper Affair
generation, investment guy. His daughter Jesse, is a good friend of Elizabeth
cut. Elizabeth, a million dollar check funding started to fall into place and she had a Stanford professor on board. So Elizabeth, with less than two years of college,
officially dropped out of Stanford in March two thousand four to work on her business full time. Her idea had chain
she not wanted to make a portable device that could run multiple tests with just a drop or two of blood from the finger rather than those standard, traditional painful Venus drawers that were so used to now. When we talk about ideas that could change the world. This actually is one millions of people have blood drawn for tests every day, and it can be a long and painful process for anyone who's had their blood drawn the traditional way. It's not a pleasant experience. There can be times when the nurse struggles to find a vein. There's the poking around the potential bruising it stays with. You Elizabeth Plan was a system
has to blood that would only need a tiny pinprick, just drop that would have been a game. Changer actually originally did not intend to drop out of temporary, but I wasn't going to any classes and our spending all of my time talking to receive. Logistically it just seemed like a waste of money. You because I was taken twenty units and I wasn't showing up so so then I just made a decision that I was can figure out how to make it work by February of two thousand five less than a year after starting the
company she'd raised six million dollars and Channing Robertson Joint. There are no small time as a board. Member
Elizabeth was attracting other big name board members. There was Donald Lucas Senior again
first spotting other young talent.
He was an original backer of Larry, Alison, the founder of Oracle and Lucas,
similar promise in Lisbon, MRS Lucas, in an oral history, interviewee teeth for a project that you see, Berkeley and two thousand nine is only comes, and I think she probably was twenty one years old and it left Stanford didn't graduate showed a company called third am, and I thought this would be a short term safer. She did at no background of business and so that, as quite presumptuous reserve is under the present guy, but there is an important distinction. Her great grandfather was not very successful, so that was once I that's entrepreneur aside, but she was in the medical turns out later her. The hospital in their where they live is named after her great uncle. So she came by both of these. The two things are necessary. One medicine and the other arguments are quite natural,
yeah she's attracted to you, but they could buy. Two thousand five Elizabeth began to make some very bold ground breaking claims to the press about her invention. I Moyer Again- and this is a special technician- audio segment, you listening to her
regional on edited interview with Elizabeth HOMES,
president and ceo of therapy knows exactly how big is it? What is it do? What are you gonna do for you
using and fell into a handheld device in its fully integrated? The only thing you have to do with hold your finger.
You could actually do any part of your hand or your arm up toward the device to extract the little from your hand, exactly at the little teeny needle that Paul,
a little team, you drop of blood and when he gets a drop of blood, basically a run it through what we call a biological which separate out all the cells and other types of analyzed in your blood which could traditionally com
but go by us in there and then in real time, runs many different chemistry. So she was charming and convincing and early supporters were dazzled, like the drug Elizabeth also seem to know the power of a good story like this moving anecdote about her uncle, which came up again.
Then again, I grew up spending summers and the holidays with my uncle. I remember his love of crossword puzzles and trying to teach us to play football.
I remember how much he loved the beach
amber how much I loved him
was diagnosed one day with skin cancer, which all the sudden was brain cancer and in his bonds.
He didn't live to see his son grow up and I never got to say goodbye.
Elizabeth focused a lot on loss, the power of losing someone close to you became sort of a mantra repeated again and again in a world in which people do, I have to say
goodbye too soon. They say goodbye to soon. No one ever has to say, if only I had known sooner Elizabeth would come to say that her devices could save soldiers and medevac helicopters and on the battlefield enough.
I understand that it could help people all over the world. We see a world
which no one has to go through the pain of traditional phlebotomy.
I remember reading an email from the father of a little girl. He talked about taking her to the hospital and watching as they stuck her soft tissue again and again in the search for what he called the tiny, invisible Vain Elizabeth wanted to be nothing short of revolutionary. She wanted to change people's lives in the world forever, according to those around her at the time Elizabeth envision herself
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there are no was growing quickly. Homes had to.
There are a lot of technology people to realise our vision for a pinprick test. She wanted her company to have
the same design. First, aesthetic is apple. Elizabeth
was very obsessed with apple. A lot of the fact that she hired during our period,
for example, on our yola, is a former apple product designer she's funny and personal, and loves minimalist design, something she incorporated when she helped create the look of the Iphone. She was one of Elizabeth First recruits
and a big gap for therein house. When I was asked to meet this particular person who is leading a stealth start up.
I didn't know who was at the time,
and it was a bit of a clandestine meeting
and it turned out to be Elizabeth homes. We had a great conversation. It sounded like
incredibly compelling mission that was basically
really thinking about the betterment of humanity. She's, incredibly, passionate, she's, very energetic, very expressive, with their hands hasn't very. Can heat distinct voice that you just kind of your drawn into what it is that she's? Conveying and her conviction and our belief really shines through- she really did believe she was changing the world, as did we. This was a once in a lifetime opportunity to jump Shepton we jumped ship and, unfortunately,
fifteen thousand, shares and apple, but Sylvie live continues on on a joint, fair knows, as its chief design architect responsible for the look and feel of the Edison. Their nose
break through technology
looks like a black Rectangular box about the size of a desktop printer there's a light
screen in front. The machine was supposed to process those tiny blood tests and Elizabeth naturally wanted the screen
to resemble the iphones and the casing. To look like the original MAC. Elizabeth had a vision, but according to ANA Elizabeth did
look the part, so she would wear these frumpy Christmas sweaters.
He would always either in the holiday season in a car. Ok, but
the cloning came into play here.
She was very curious about Steve's attire
and I explained to her that he was inspired by Sonys heritage.
Having the same yucca come in and create a lot of the line, manager apparel that eventually lead
to get the issing yakking black turtleneck that is historically known inside, pointed that out to her, and then I think she one often
track down who sent me up. The rest is couture history per se.
It did change her her aesthetic and I think it was for the best
Elizabeth was wearing black turtle next, just like Steve Jobs, some like Phyllis Gardner, say even her voice also changed dramatically into a low, serious Barrett.
When she came in it, you didn't have a low voice. She didn't know what was your voice
just like a technical, undergrad student when I next Sargon had she says this low voice? I call my god it was quite off
you were thrown. We didn't know that it wasn't her voice until much later. In all my interactions with her, she never fell out of character. That was her voice, but other
people that I worked well actually had caught her followed a voice. I think aim is that one of the company parties may be shed a little bit too much to drink or not, but she fell on a character and expose that that wasn't missile
curly her return your voice, maybe she needed to be more convincing to projected persona within a room amongst male vc. Is I'm not really quite sure honor,
so I started to notice other behaviour that surprised her
after night come into work really early because I've kids, since I was usually one of the first people to arrive at the office elizabeth- might have beat me before, but we sometimes would pull up in the parking lot together.
I just remember she had a unique private sense. She was rocking
and slamming her head to hip hop music just fully
rocking and in a car. I don't think I was meant to see that Elizabeth kept successfully recruit
from apples ranks poaching several of odd as former colleagues. So
where are we right now we're Cooper CAFE, although this is
where you would mean Elizabeth,
where we met Elizabeth. This is where he had lived, but people outside a cellphone valley. This is a place where tech common chat about big ideas. Do they still there? I think, there's a reputation with this place that look things happen here. Deals avenue conversations happened so a bit slow right
its into that sort somewhere over there there's a forty million dollar check on his old apple colleagues. Just
Maxwell, an atom volmer, soon came
on board along with Might Bowery whose wife had worked at apple with both of them. So
you call yourselves bodies, work bodies, oh yeah, yeah Pusher, MIKE
Justin, worked on Onest team, designing the Edison and other products software. So just starting
you what made you take the offer honor
others involved in recruiting having hype it up so much. I
gone in there with this expectation that I was meeting brilliance and so that
thinking that I was meeting the next Steve Jobs next Zuckerberg, something like that that
create this impression I was in awe of this person's drive. So for me this was something that could make a positive dent on humanity.
Adam was an engineer generally goddesses somebody I want to come here, for
we wanted to see her become that donnerwetter. Like everybody wants to work for the next EU jobs, it wasn't long before they started
see, they were designing something in the apple style for technology that really didn't exist,
but there was over a feeling of like we have.
There will be no need for apple designers here that didn't make sense at first, but then,
as we start to learn from people saying, the tech doesn't work or the science isn't matching up, and then we understood all right. That's why you don't want us here. It's not because you don't like us as people is that, like we actually can't provide value to this company right now, if the underneath the found
it isn't working. On top of that they say: Elizabeth arrange things so that everyone was purposely silos. They were sworn to secrecy to protect what Elizabeth felt were trade secrets, but it was like the left hand, didn't know what the
right hand was doing. I went beyond micromanaging. It was like actively kind of trying to foster this common.
Commissioner. It is a complete distrust for the organisation that she'd built under her, but despite this chaos, she even manage to
which avi to vein in from apple, he was Steve Jobs right hand at the company. He led the software team that developed MAC away
ten obvious, even in the Steve Jobs Movie. It's like this,
our key software desire and he wrote a demo programme as likely built a great car. We haven't built the engine for a golf cart battery in there to make a Gulf age
when the board in two thousand six, but quickly got frustrated with what he was seeing. I think what you didn't expect was. I would actually ask a lot of questions
that if things were going as they should be going, but I would ask tough questions: how did she respond when you would ask tough questions? You know she was really good outside
reflecting them, so it was generally probably,
let's say more of a non answer or ay evasive answer, which is we don't have the contract right now? Maybe get that for you later
just like that, he wasn't the only one confused by the company. It seemed like employee
is, were being hired and fired really quickly. Here's Justin Elizabeth
did do a great job of recruiting amazing people. I watch those people that I trusted disappear.
Our office was right next to the General Council and the head of business development, both of whom were people
a tremendous admiration for their extremely sharp and knew the industry very well and they just vanished, and then I think I'd like to
after I started. The CFO was just like probably fired or disappeared right, and that was disconcerting.
Ana then their noses chief design architect noticed the same thing.
She did not want to hear other people's opinions show
and positive results. I think said
you know anyone who basically tub Elizabeth now and disagreed with her perspective and point of view, you were immediately terminated.
It was just a very unusual environments. There were posts,
two glass doors website from employees
where they could
to South America,
Hurricane dictatorship or a drug cartel. How would you describe the culture of their names just in first watching people that I really trusted vanish and then actually noticing that this person is willing to lie to me about extremely trivial unimportant things? And how do you know she lied
because we were? We are discussing some product design over a mail. I was expecting to stay in the office late to finish it up and she's said something effective. You know like I can't you know. I can't help without right now, but I will get back to you and I'm in the office tomorrow and she was actually just in
office right down the hall from me, and I could see her sending you that night. So I walked over to her and had a bit of an argument with her and then walk back to my office and she stormed after me and came in and shut the door behind me and said. Don't ever walk off on me again,
but did she acknowledged that she had lied to you
course nigh and things went b
and what employees say was casual lying? Just as Elizabeth had convinced the apple recruits to come aboard to design a product for technology that didn't yet exist, she was trying to sell a product to big farmer that wasn't ready. One incident was particularly troubling to ANA Elizabeth and convinced a major drug company to let their nose test its technology on terminal cancer. Patients in a study in Tennessee really vulnerable people. This made on a really nerve.
There were a patients who are third and fourth stage oncology cancer patients at the University of Tennessee that had given up their basically their blood to test this device.
We had gone word from Adam Volmer, who was our
chemical engineer, working on the internal mechanism for the Edison device that light
sleeping in and with light seeping in a the blood telemetry data, thus corrupt.
The data. There was a very unfortunate situation and, as it turned out like
and all this very sensitive chemistry that thousands of people working on
and it can be as precise, unwanted but a few screwed up the introduction of the blood into this cartridge. There was a game over. You would get a wildly
wrong resulting ready, but I think we all knew from where we saw that like it
like, we were a very long way away from having a working product are going. Steady, fell,
sure rest where we arrive. They just weren't,
you weren't, generating reliable reproducible data. These employees,
he didn't know the test results wooden impact, the actual treatments given to these cancer patients and would just be for research purposes. Elizabeth kept that detail for most there are no supplies regardless
they hated making such vulnerable people guinea pigs. Did you raise a red flag? Did you
internally say? I think this is a problem battery a feedback just one like.
Generally ignored dapper enough cycles amounted to spot like there were people like myself and others who disagreed with a lot of these decisions and just with being overlooked again begun
ANA confronted Elizabeth, too bad information with suppressed, and so I said, I'm gonna take this Elizabeth directly and have a conversation with her, of which I did,
and she basically conveyed to me that I should
This is an incredibly critical juncture in the country.
Is a current fund raising and I was like that's unacceptable from an ethical perspective. I just cannot stomach
and I confronted with this information, and she gave me an ultimatum. Suppress it and continue on is business as usual,
or I said I was resigning and
send it to resign nights that my wrist
ignition letter under any through a door and honour
the heavy jars door, and I left for him.
She inevitably found out that I have resigned
and she frantically tried calling me. I would not take your phone calls. I just literally had nothing
I wanted to do with their company anymore on his departure left. Her former recruit
stunned on. I just said you know
with his lying. She told everyone the Tec in this situation worked and it didn't work at all and I'm gonna go be a full time. Chef for my family sounds like a pretty big one eighty year, but soon they'd be out the door to just didn't, send Elizabeth to man
meant books and a pretty epic letter of resignation. Do you mind reading starting on that? Second paragraph hi, I'm resigning good, look and please do read those books, watch the office and believe in the people who disagree with. You
wish, I could say better things, but I think you know exactly what is going on at their house. Lying is disgusting habit and flows through the conversations here like it's our own currency, but I really
really believe you know it already and for some reason I can't figure out you allow it to continue. I feel like I owe you this bad attempt at an exit interview, since we have no hr to efficiently record it just Maxwell years later. Just in would see her just one more time, the other, as this point in I think too
and twelve, and I was standing in the sea- vs covered my own blood having just been hit by a car, and I turn and picking up like vicarious something and Elizabeth Sprightly.
I mean she's like high just in totally regardless of the
like I'd. Obviously just you know been hit by a car, I wanna bite and she she says you know we really. We really benefit from having you in the company right now. I see no shame that things turned out the way they did or what?
Ok, it's really good. Seeing you Elizabeth! You know thanks.
However, I am not in any way now there. If you had just been hit by a car now it was, it was so sorry. Avi ran into the same problems with trust. He says he started to raise issues when it was proposed that there are no transfer some stock into a nonprofit foundation that might sound innocuous, but basically it would give Elizabeth even more control over the company, because by controlling the foundations we would have voted control. The shares. Why didn't make any sense to me and it wasn't that big a deal in the grand scheme of things o them didn't make? Any sense word got back to her. I think that I raised an objection to this, and I think this is this was like the last straw for her. For me,
word got back to Elizabeth, threw down Lucas that board member you heard from before, who once helped Larry Alison get his start. Then always a bit goes dark on me and on Lucas called me so went to visit him,
and he said he now Elizabeth would like you to resign from the board cutting to the chase. He little is that you're still any questions by this point. Avi was irritated him seriously. Question many claims, Elizabeth and therein else had made and it was like- or something is very wrong here. All these promises- none of them have happened. All these people involved are all gone
and nothing even lined up, and so I pull this altogether all this information together printed or allies at dawn. Ok, I'll, give you a choice. I think that there is a chance. This company can make this point
work and I would love to stick around with you and help you to make it work, and we probably need
revisit Howl Elizabeth role and everything else and do a few few things unhappily stick around and do that or if you want a resign, your choice, he said
I want you to resign as like out of a movie and their surprised that he said I'd like for you to resign. I shouldn't have been, but I was.
And I was the reason I was surprised was because I done all this work to find so many things that were clearly broken, many of which to me were fixable, and I guess I had just naively assumed that dawn would listen, but he was just his goal. Then I think was just
support Elizabeth and he believed everything that she said. Don honestly believe that she was the next Steve jobs but
meaning didn't just end with obvious resignation. No doubt said he needed one more thing from avi. It actually gets weirder.
So I tell dawn,
I'm gonna resign, have the lawyers semi the paperwork outside it and send it as I get up
the paper to him, give it to him as I get up to walk out the door Don says to me: oh
before you go, I need you to sign something also like what do you need me to sign any says. Well,
Beth is going to buy some sharers from another founder in a private transaction and I'm like Don I'm not just gonna, blindly sign something, I'm not even sure that makes sense, and so then I get up and finally the guy
and is all one more thing. I need you to sign your own rights away like this is getting ridiculous. I'm like I, don't even know what this is about. Just have the lawyers contact me and I'll figure it out later and on Christmas Eve, that years of going back and forth all with where it was literally like eleven p m. On Christmas Eve, the
General Council of the company send me an email saying we need you to sign this.
And oh by the way, is come to our attention that you ve been disparaging the company and saying negative things to people in general about the company and a company in our stage cannot afford to be disparaged like this essentially saying they gonna sue me unless I sign this agreement to give up my rights. This is this: is Christmas Eve on getting this mouth, so they threatened to see you on Christmas Eve, yeah, basically licking about that close from four to think was a literal threat, but it was pretty close avi on the advice of a good friend whose an attorney relented and signed the papers. I would have one there's no question. It probably, I think a lot of kind of exposed her and exposed the company for animals they being a fraud, but for not being totally with jet and he caught a seventh. What is that
your responsibility and do want to spend all this money in a lawsuit just to do that is like the plague. Gonna go out of business anyway, right and I said you're right and so the next day I just signed the forms and wet my hands of it. So you weren't down with Baron House, I was done with their owners.
I had seen so many things that were bad go on.
I will never expected anyone would behaved whether she behaved as a seal and believe me. I work for Steve jobs. I saw some crazy things, but
always a birth took her to a new level. Would we know personal attacks? Threats of war suits walkouts quitting and losing the guy who is Steve Jobs right hand? That would kill a lot of start ups, but it didn't kill Farragos
a new people kept coming to work at the company. Amazingly, this was nearly nine years before the company really started to unravel. If what
he says was true how good things have gone on as long as they did. While Elizabeth became a super star in the process in the next episode of the drop out, cash is running out
and Elizabeth brings in a new right hand with deep pockets. Did you ever tell investors that units from all I had a romantic relationship at the time they were asking, thus unfairness. They continue to call
Baden environment of extreme secrecy. Yet there is definitely a culture of here. I don't know it's out started, but it was definitely there and, as the technology gets ready to hit the market, were they
about to potentially put millions of lives at risk. Elizabeth home,
Loreen, Fuse Channing, Robertson and Donald Lucas didn't respond
or decline. To comment for this. Podcast
drop out is written in produced by Taylor done Victoria Thomson and me, predators are Chris through Bay and Evan Viola Creed and our theme song. Researchers are Victor ordinary lane when our work is by
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ABC Specialised units thanks,
so the team at ABC Radio, Steve Jones, Andrew Kelp, Josh, cohesion and painful as enter the Wall Street Journal John Kerry Room author of bad blood was investigated. Reporting first expose this remarkable story. Be sure to subscribe to the drop out podcast and if you like, what you heard leave us review, was its new episodes of the drop out every Wednesday.
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Transcript generated on 2019-12-08.