The Elizabeth Holmes Trial Is Sparking A Gender Debate In Silicon Valley
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As you may be following, Elizabeth Holmes is facing possible prison time over fraud charges tied to her former blood testing company, Theranos. So why haven't other tech startup CEOs who've been accused of wrongdoing ever faced criminal charges? NPR's Bobby Allyn has more.
BOBBY ALLYN, BYLINE: Selling an idea in Silicon Valley takes a big vision, charisma and something else.
MARGARET O'MARA: A certain amount of swagger and bluster.
ALLYN: That's Margaret O'Mara, longtime historian of the tech industry at the University of Washington.
O'MARA: And being able to tell a good story is part of being a successful founder, being able to persuade investors to put money into your company.
ALLYN: O'Mara says when Elizabeth Holmes promised to revolutionize health care with a portable blood testing machine that could scan a finger prick of blood for hundreds of diseases, she was doing just that - drumming up investment with a big dream. But in doing so, prosecutors say she broke the law by deceiving investors about how well the business was doing and providing false or flawed test results to patients.
As Silicon Valley focuses on Holmes' trial, there's another debate swirling - why Elizabeth Holmes? Ellen Pao is the former CEO of Reddit who now works to fight gender discrimination in tech. She says sexism is partially to blame.
ELLEN PAO: So when you see which CEOs get to continue to wreak havoc on consumers and in the market, it's people who look like the venture capitalists, who are mostly white men.
ALLYN: She points to Adam Neumann, who drove WeWork into the ground; Uber's former CEO Travis Kalanick, who resigned after a sexual harassment scandal; and Juul's Kevin Burns, who stepped down amid questions over the company's role in stoking the youth vaping epidemic. There were lawsuits and settlements and fallout, but Pao says, notably, no criminal prosecutions.
PAO: That all these people continue to lead their lives and have not been held accountable for all the harm that they've caused, it does send a message.
ALLYN: Historian O'Mara says Elizabeth Holmes did follow a Silicon Valley playbook of being a young, enthusiastic founder who leaned into bold claims about changing mankind. But it's almost become a trend for industry players to now say her case was a one-off.
O'MARA: The gap between what she and her colleagues were saying Theranos was doing and what it actually was doing was so vast (laughter) that, you know, it's very easy for Silicon Valley to just say, you know, this isn't us.
ALLYN: Former prosecutors who have tried white-collar crimes say there are several reasons why Holmes' case stands out among disgraced CEOs. First, the alleged fraudulent behavior was egregious. Holmes said she had a miracle machine, and prosecutors say it barely did anything at all. Mark MacDougall, a former federal prosecutor, says Theranos being a biotech company in the health care world raised the stakes.
MARK MACDOUGALL: It allows the government to contend with some evidence that the health of, you know, private citizens, the health of innocent people was put at risk.
ALLYN: Another reason Holmes was charged was prosecutors say they have evidence that she acted intentionally, which is sometimes hard to find in a fraud case. That's according to Hartley West. She used to be a top prosecutor in the U.S. Attorney's Office for the Northern District of California, which polices Silicon Valley.
HARTLEY WEST: It is one of the elements of the offense that if not proved deserves an acquittal. It is that that is frequently the most difficult part of any white-collar case to prove.
ALLYN: Pao, meanwhile, says she is not defending Holmes. She says prosecutors should be charging her, but she wants to see a wider conversation about why other CEOs accused of wrongdoing haven't faced criminal cases.
PAO: That's what my message is. Why aren't we holding other people accountable so we can avoid all the harm that is happening in the tech industry?
ALLYN: Holmes' trial is expected to last until later this year. If convicted, she could go to prison for years.
Bobby Allyn, NPR News, San Francisco.
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