Former U.S. Secretary of Defense James Mattis, who served on Theranos’ board of directors, testified he was \u00ab\u00a0disappointed at the level of transparency\u00a0\u00bb from CEO Elizabeth Holmes.<\/b>
\nSAN JOSE, CALIF — Former U.S. Defense Secretary General James Mattis testified on Wednesday that as a board member at Theranos he was \u00ab\u00a0frankly amazed\u00a0\u00bb at what was possible at first but later became disillusioned with the company. \u00ab\u00a0We were putting our reputation at risk, and reputational risk is something I pay a lot of attention to given my background,\u00a0\u00bb Mattis said on the stand during the trial of former Theranos CEO Elizabeth Holmes. Mattis, a retired four-star general, served on Theranos’ board of directors from 2013 until December 2016., and was the first high-profile witness since the trial kicked off last month. The jury listened intently to his testimony, which lasted three hours. \u00ab\u00a0Looking back now I’m disappointed at the level of transparency from Ms. Holmes,\u00a0\u00bb Mattis said, adding \u00ab\u00a0we were being deprived of fundamental issues.\u00a0\u00bb Mattis was the seventh witness the government called to testify in the case. Holmes is fighting 12 charges of wire fraud and conspiracy in connection with misleading investors and patients. She has pled not guilty. ‘I was not a medical person’ Mattis recounted meeting Holmes after an event in San Francisco where she pricked his finger to demonstrate her blood-testing technology. He said his first impression of the CEO was \u00ab\u00a0sharp, articulate, committed,\u00a0\u00bb but he was at first hesitant to accept Holmes’ invitation to join the board. \u00ab\u00a0I asked her ‘why’, I was not a medical person,\u00a0\u00bb Mattis said. He recalled that Holmes told him she wanted him on the board \u00ab\u00a0to help her build a corporate culture out of building elite teams, how to get commitment out of people, it was about management, about personnel.\u00a0\u00bb Mattis eventually agreed to join, testifying that he went to a bookstore \u00ab\u00a0and picked up two books and two pamphlets to educate myself on being a board member.\u00a0\u00bb Mattis revealed he invested $85,000 in Theranos and was paid $150,000 to serve on its board. \u00ab\u00a0Was that a significant investment for you?\u00a0\u00bb John Bostic, an assistant U.S. attorney asked. \u00ab\u00a0For someone who had been in government for 40 years, yes\u00a0\u00bb Mattis said. Other high-profile government figures on the board included former Secretaries of State Henry Kissinger and George Shultz. During cross-examination, defense attorneys pointed to an email from February 2015 in which Holmes wrote to Mattis stating that she and Ramesh Balwani, her top executive and for a time romantic partner, wanted to get paid in stock options rather than a salary. \u00ab\u00a0At the time I thought she had strong belief in her company,\u00a0\u00bb Mattis said. Attorneys for Holmes also pointed out that the board members were sophisticated and knowledgeable enough to express their opinions and ask questions if they had concerns. Mattis agreed. Defense attorneys also discussed Holmes’ eventual need for a security team. \u00ab\u00a0You thought that providing that kind of security for her was necessary?\u00a0\u00bb Kevin Downey, a defense attorney for Holmes asked. \u00ab\u00a0Secretary Shultz called me in with a concern that her public profile was going to be a danger for her,\u00a0\u00bb Mattis recalled. Mattis introduced Holmes to his longtime chief bodyguard. \u00ab\u00a0I deferred to her, I thought she had good judgment and Secretary Shultz probably knew more about the civilian world and what the threats were for people who end up on the front page of a magazine,\u00a0\u00bb Mattis said.<\/p>\n