Trump's Defense Pick Officially Cuts Ties With Theranos

Published: Jan 10, 2017

Trump's Defense Pick Officially Cuts Ties With Theranos January 9, 2017
By Alex Keown, Breaking News Staff

WASHINGTON – Gen. James Mattis stepped down as a member of the Theranos board of directors as he prepares to take on the new job of U.S. Secretary of Defense.

According to a letter submitted to the Department of Defense and made public last week by the Office of Government Ethics, Mattis stepped down from his role with the embattled Theranos in December as he readies himself for the confirmation hearings to take on the new position. Although he has stepped down from the board, Mattis has not divested himself of company stock. In the letter, he said his duties as secretary are “unlikely to involve particular matters affecting the financial interests of Theranos, Inc.” He added that as long as he owns stock in the privately-held company, he will not participate in any matter that has a “direct and predictable effect on the financial interests” of Theranos. Mattis also said if he divests Theranos stock, he would not participate in any matter that could affect the company for a period of one year, unless, he said, he is authorized to do so.

Mattis joined the Theranos board of directors in 2013 and has received fees of $150,000, Bloomberg reported. However, Mattis’ connections to Theranos and its founder, Elizabeth Holmes go back a bit further. The two met in 2011 and Mattis became interested in testing Theranos’ blood-testing equipment in war theaters in a pilot program that would not have required approval by the U.S. Food and Drug Administration. But, in 2012 the Department of Defense raised concerns about Theranos’ blood testing technology and notified the FDA. In a 2015 report by the Washington Post, Holmes sought aid from Mattis to “squelch those ‘inaccurate’ concerns” raised by the DOD official. According to the Post, Mattis, sent multiple emails to other military leaders asking “how do we overcome this new obstacle.”

“I have tried to get this device tested in theater asap, legally and ethically,” Mattis wrote in the emails, the Post said. “This appears to be relatively straight-forward yet we’re a year into this and not yet deployed.” That field test never took place, despite Mattis’ influence.

After Mattis retired from the military, he then joined Theranos’ board.

The concerns raised by the defense department officials reflected concerns raised by other entities that ultimately led to Theranos abandoning its blood-testing roots and focus on the development of a miniaturized and portable lab.

President-elect Donald Trump tapped Mattis as his choice for Secretary of Defense in November.

In addition to his resignation from the Theranos board, Mattis’ letter said he will resign from several other boards on which he serves if the U.S. Senate confirms him next week. Some of those boards include General Dynamics, which is a defense department supplier.

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