فصل 20

The Ambush

The rental house Tyler Shultz shared with five roommates in Los Altos Hills was only a twenty-five-minute drive from his parents’ home in Los Gatos, so he tried to have dinner with them about once every other week. Early on the evening of May 27, 2015, Tyler eased his little Toyota Prius C into his parents’ garage and entered the house through the kitchen. When he caught sight of his father, he immediately sensed that something was wrong. His face was a mask of worry and panic.

“Have you been speaking to an investigative journalist about Theranos?” his father asked accusingly.

“Yes,” Tyler responded.

“Are you kidding me? How stupid could you be? Well, they know.”

Tyler learned that his grandfather had just called to say that Theranos was aware he was in contact with a Wall Street Journal reporter. If he wanted to get out of what George had described as “a world of trouble,” he would need to meet with the company’s lawyers the next day to sign something.

Tyler called his grandfather back and asked if the two of them could get together later that night without any lawyers. George said he and Charlotte were out to dinner but should be home by nine and Tyler could come by then. Tyler sat down for a quick meal with his parents, then headed home to think through how he would approach the conversation with his grandfather. His mother and father gave him big hugs as he headed out the door.

When he got home, Tyler called me. From the tone of his voice he seemed a nervous wreck. He asked whether I had disclosed our communications to Theranos. Absolutely not, I replied, telling him I took the promises of confidentiality I made to sources very seriously. We tried to figure out what had happened.

It had been three weeks since we had met at the beer garden in Mountain View. Back in New York, Matthew Traub had continued putting off my requests for an interview with Holmes and had asked me to send him questions instead. I had sent him an email outlining seven main areas I wanted to discuss with Theranos, ranging from Ian Gibbons to proficiency testing.

I forwarded the email to Tyler and he scanned it while we were on the phone. In one section about assay validation, I had included a coefficient of variation for one of the Edison blood tests, not realizing that it was a figure Tyler had calculated himself. There was nothing else in the email that could point to him, so Tyler assumed that was what they had seized on. He seemed to relax. He could easily explain that number away, he said. It could have come from anyone.

Tyler didn’t tell me he was about to go see his grandfather, only that Theranos wanted him to come to its offices the next day to meet with its lawyers. I advised him not to go. He no longer worked for the company and was under no obligation to accede to the request. If he went, they would try to smoke him out, I warned him. Tyler said he would think things over. We agreed to touch base again the next day.

—

TYLER ARRIVED at his grandfather’s house at 8:45 p.m. George and Charlotte weren’t home yet, so he waited out in the street until he saw their car pull into the driveway. He gave them a few minutes to settle in, then walked into the house. He found them sitting in the living room.

“Have you spoken to any reporters about Theranos?” George asked.

“No,” Tyler lied. “I have no idea why they would think that.”

“Elizabeth knows you’ve been talking to the Wall Street Journal. She says the reporter used the exact phrasing that’s in one of your emails.”

Charlotte corrected her husband: “I think she said it was a number.”

Was it a number related to proficiency testing? Tyler asked. A lot of people had seen that data, he said. The Journal could have gotten it from many other former employees.

“Elizabeth says it could have only come from you,” George said sternly.

Tyler stuck to his guns. He said he had no idea how the reporter had gotten his information.

“We’re doing this for you,” George said. “Elizabeth says your career will be over if the article is published.”

Without admitting anything, Tyler tried once more to convince his grandfather that Theranos was misleading him. He went over again all the things he had told him a year earlier, including the fact that the company performed only a small fraction of its blood tests on its proprietary Edison devices. George remained unconvinced. He told Tyler that Theranos had prepared a one-page document for him to sign affirming that he would abide by his confidentiality obligations going forward. The Wall Street Journal was going to publish Theranos trade secrets and those trade secrets would become public domain if the company didn’t show it had taken action to protect them, he explained. Tyler didn’t see why he had to do that but said he’d be willing to consider it if it meant the company would stop bothering him.

“Good, there are two Theranos lawyers upstairs,” George said. “Can I go get them?”

Tyler felt blindsided and betrayed. He had specifically asked that they meet without lawyers. But if he tried to duck out now, it would reinforce everyone’s suspicion that he had something to hide, so he heard himself say, “Sure.”

While George went upstairs, Charlotte told Tyler she was beginning to wonder whether the Theranos “box” was real. “Henry is too,” she said, referring to Henry Kissinger, “and he’s been saying he wants out.”

Before Charlotte had time to say more, a man and a woman appeared and strode aggressively toward Tyler. Their names were Mike Brille and Meredith Dearborn. They were partners at Boies, Schiller & Flexner. Brille told Tyler he had been tasked with finding out who the Journal’s sources were and had identified him in about five minutes. He handed him three documents: a temporary restraining order, a notice to appear in court two days later, and a letter stating Theranos had reason to believe Tyler had violated his confidentiality obligations and was prepared to file suit against him.

Tyler again denied having talked to a reporter.

Brille said he knew he was lying and pressed him to admit it, but Tyler stood firm. The lawyer refused to let it rest. He was like an attack dog. He continued to badger Tyler for what felt like an eternity. At one point, Tyler looked at his step-grandmother and asked her if she felt as uncomfortable as he did. Charlotte was glowering at Brille and looked like she was about to give him her right hook.

“This conversation needs to end,” Tyler finally said.

George came to his grandson’s help. “I know this kid, and this kid doesn’t lie. If he says he didn’t speak to the reporter, then he didn’t speak to the reporter!” he exclaimed. The former secretary of state ushered the two lawyers out of the house. When they were gone, he called Holmes and told her this was not what they had agreed upon. She had sent over a prosecutor rather than someone who was willing to have a civilized conversation. Tyler was ready to go to court the next day, he warned her.

Tyler felt his heart rate accelerate and his hands shake as he watched Charlotte grab the phone from George’s hand and heard her say, “Elizabeth, Tyler did not say that!”

George got back on the line and a compromise was reached: they would meet again at the house the following morning and Theranos would bring the one-page document they had originally discussed affirming that Tyler would honor his confidentiality obligations. Before hanging up, he implored Holmes to send a different lawyer this time.

—

THE NEXT MORNING, Tyler arrived at his grandfather’s house early and waited in the dining room. He wasn’t surprised when it was Brille who showed up again. Holmes was playing his grandfather like a fiddle.

The lawyer had brought along a new set of documents. One of them was an affidavit stating that Tyler had never spoken to any third parties about Theranos and that he pledged to give the names of every current and former employee who he knew had talked to the Journal. Brille asked Tyler to sign the affidavit. Tyler refused.

“Tyler isn’t a snitch. Finding out who spoke to the Wall Street Journal is Theranos’s problem, not his,” George said.

Brille ignored the former secretary of state and continued pressing Tyler to sign the document and to name the newspaper’s sources. Look at things from his perspective, he pleaded: in order to do his job, he needed to get that information from him. But Tyler wouldn’t budge.

After the uncomfortable standoff had dragged on long enough, George took Brille into a separate room and came back to talk to Tyler alone. What would it take for him to sign that document? he asked his grandson. Tyler replied that Theranos would have to add a clause promising not to sue him.

George grabbed a pencil and scrawled a line on the affidavit to the effect that Theranos pledged not to sue Tyler Shultz for two years. Tyler wondered for a split second if his grandfather thought he was an idiot.

“That doesn’t work for me,” he said. “It needs to say they won’t ever sue me.”

“I’m just trying to come up with something Theranos will agree to,” George protested.

But the old man seemed to realize the absurdity of what he’d just proposed. He crossed out the words “two years” and replaced them with “ever.” Then he stepped back out of the dining room to go talk to Brille. The two of them returned a few minutes later, with Brille having apparently agreed to Tyler’s terms.

The brief interlude had given Tyler time to think, however, and he’d decided he wasn’t going to sign anything. One of the other documents Brille had brought that morning was his original Theranos confidentiality agreement. Tyler pretended to read it over while he thought about the best way to say he wouldn’t be signing the affidavit. After a long, awkward silence, he settled on how to couch his refusal.

“A Theranos lawyer has drafted this with Theranos’s best interests in mind,” he said. “I think I need a lawyer to look at it with my best interests in mind.”

Both his grandfather and Brille looked exasperated. George asked if Tyler would sign the document if his estate attorney, Bob Anders, reviewed it and told him it was OK to do so. Tyler said he would, so George headed upstairs to fax the modified affidavit to Anders. Figuring it would take him a while to get up the stairs and work the fax machine, Tyler went to the kitchen and started going through his grandfather’s phone book looking for the estate lawyer’s number. He wanted to get to him first. As he was riffling through the pages, Charlotte handed him a piece of paper with the number on it. “Call him,” she said.

Tyler placed the call from the backyard. He quickly explained the situation to Anders. Still digesting all the information, the lawyer asked who was representing Theranos. Tyler had the letter threatening to sue him that Brille had given him the night before in his hand. He told Anders it was signed by a “David Boy-zee,” mispronouncing the famous lawyer’s last name.

“Holy shit! Do you know who that is?”

Boies was one of the most powerful and prominent lawyers in America, Anders explained. This was a serious situation, he said. He recommended that Tyler come see him at his office in San Francisco that afternoon.

Tyler followed his advice and drove to the city. He met with Anders and one of his partners on the seventeenth floor of the Russ Building, a neo-Gothic tower in the Financial District that was once San Francisco’s tallest building. After conferring with the two lawyers, Tyler decided not to sign the document. They agreed to communicate that message to Theranos on his behalf, but they would eventually need to refer him to another attorney to avoid a conflict of interest. Their firm, Farella Braun + Martel, also represented Holmes’s estate.

When Anders informed Mike Brille that Tyler would not be signing the affidavit, Brille warned that Theranos would have no choice but to sue him. Tyler went home expecting to be summoned to court the next day, but late that evening, Brille sent Anders an email saying Theranos had decided to hold off on a lawsuit to give the two sides more time to work something out. Tyler breathed a sigh of relief when he got the news.

—

ANDERS REFERRED TYLER to a lawyer named Stephen Taylor, who headed a boutique law firm in San Francisco experienced in handling complex business disputes. During the following weeks, Brille and Taylor exchanged four different drafts of the affidavit.

Tyler tried to be conciliatory in an effort to reach an agreement, acknowledging in the new versions of the document that he had talked to the Journal. Theranos gave him the option of saying that he was young and naïve and that the reporter had deceived him, but he declined. He had known exactly what he was doing and youth had nothing to do with it. He hoped he would have acted the exact same way if he had been forty or fifty. To placate Theranos, Tyler did consent to being portrayed as a junior employee whose duties were so menial that he couldn’t possibly have known what he was talking about when it came to topics like proficiency testing, assay validation, and lab operations.

But the negotiations stalled over two issues. Theranos still wanted Tyler to name the Journal’s other sources, which Tyler steadfastly refused to do. And the company declined to include his parents and heirs in the litigation release it was willing to grant him. As the stalemate dragged on, Boies Schiller resorted to the bare-knuckle tactics it had become notorious for. Brille let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators. His lawyer tried to make light of it.

“It’s not a huge deal,” he said. “Just don’t go anywhere you’re not supposed to be and remember to smile and wave to the man in the bushes outside your house when you leave for work.”

One evening, Tyler’s parents received a call from his grandfather. George said Holmes had told him that Tyler was responsible for most of the information the Journal had and was being completely unreasonable. Tyler’s parents sat him down in their kitchen and pleaded with him to sign whatever Theranos wanted him to sign at the next opportunity. Otherwise, they would have to sell their house to pay for his legal costs. It wasn’t that simple, Tyler replied, unable to say much more. He badly wanted to explain to them what was going on, but he was under instructions not to discuss the negotiations with Theranos with anyone.

To allow Tyler to update his parents about where things stood, Taylor arranged for them to have their own legal counsel. That way he could communicate with them through attorneys and those conversations would be protected by attorney-client privilege. This led to an incident that rattled both Tyler and his parents. Hours after his parents’ new lawyer met with them for the first time, her car was broken into and a briefcase containing her notes from the meeting was stolen. Although it could have been a random act of theft, Tyler couldn’t shake his suspicion that Theranos had something to do with it.

—

I HAD NO IDEA any of this was happening. After Tyler’s anxious call the evening he had dinner at his parents’ house, I tried to check back in with him. I sent an email to his Colin Ramirez address, which he’d insisted we continue using for his protection, and called him on his burner phone. But my email went unanswered and the phone appeared to be turned off and didn’t have a voicemail. I continued to try the email address and the phone for several weeks, to no avail. Tyler had gone dark.

I suspected Theranos was putting the screws to him, but I couldn’t confront the company about it since he was a confidential source. I hoped he wouldn’t cave under pressure and I took comfort in the fact that he had already sent me his email to Holmes questioning Theranos’s practices and the complaint he had filed with New York State. When added to the internal email trail about proficiency testing I had obtained from Alan Beam, it made for a damning trove of documents.

I pressed forward with my reporting, calling the New York State Health Department to inquire about what had come of Tyler’s anonymous complaint. It had been forwarded to the federal Centers for Medicare and Medicaid Services for investigation, I was told. But when I called CMS, I learned that no one there could find any trace of it. It had somehow been lost in the shuffle. To their credit, the folks who ran the agency’s lab-oversight division seemed serious about following up on it now that they knew of its existence. They asked me to forward it to them and assured me it wouldn’t be overlooked this time.

Meanwhile, Matthew Traub was continuing to give me the runaround. It seemed I was the only reporter in America to whom Holmes wouldn’t grant an interview. She had recently appeared on CBS’s morning news program, Fareed Zakaria’s show on CNN, and Jim Cramer’s Mad Money on CNBC. The icing on the cake was when one evening in early June I glanced up from my computer at one of the TVs in the newsroom and there she was in her black turtleneck carrying forth on Charlie Rose. During a heated phone conversation the next day, I told Traub that Theranos couldn’t keep putting me off indefinitely. If not Holmes, someone from the company needed to meet with me to address my questions and it had to happen soon, I yelled, pacing back and forth in front of my stoop in Brooklyn.

Traub came back to me a few days later proposing that I meet with a Theranos representative at the offices of Boies Schiller in Manhattan. I initially agreed but then thought the better of it. That would be the equivalent of marching straight into the lion’s den. I called him back and told him the Theranos representative—and the phalanx of attorneys I suspected would accompany him—needed to come to me. A meeting was scheduled for 1:00 p.m. on Tuesday, June 23, at 1211 Avenue of the Americas, home to the Wall Street Journal.