Elizabeth Holmes, then the CEO of Theranos, appears at the 2014 Fortune Most Powerful Women Conference in Laguna Niguel, California.
For journalists, the story of Theranos and its founder, Stanford University dropout Elizabeth Holmes, resembles that of Enron or the Catholic Church in the movie “Spotlight”: Powerful criminals who believe themselves untouchable are brought to justice as a result of dogged reporting.
“Bad Blood,” John Carreyrou’s spectacular 2018 book about Theranos and the truth he uncovered as a reporter for The Wall Street Journal, is an affirmation of the important role journalism will always play in a just society.
There is, however, another journalist who played an important role in the Theranos story, and he has not become a bestselling author or podcast host. Instead, Roger Parloff is paying penance for the cover story he wrote for Fortune magazine in June 2014, more than a year before Carreyrou’s expose.
It was such a love letter that Theranos promptly began including reprints in packets used to solicit more money from investors who believed, as Parloff did, that Theranos could perform biotech magic. While Carreyrou has become a patron saint of investigative reporters, Parloff is a cautionary tale.
“I got caught up in this woman’s story,” Parloff said in 2019. “I began to drink the Kool-Aid. … I think I asked the right questions. I just got the wrong answers.”
He was a witness for the prosecution in Holmes’ ongoing criminal trial for fraud, pointing out times that she misled him into reporting things that were simply not true. She led him to believe that Theranos’ technology could, in 2014, perform 200 common diagnostic tests on drops of blood from a simple finger-stick, no syringe required. In truth, only about a dozen tests could be performed on the Theranos machine, and those results were unreliable. The rest were being conducted on third-party machines, sometimes using the usual venous blood draws and sometimes by jury-rigging the tests by diluting samples too small for the commercial machines to process reliably.
Parloff, it should be emphasized, did not make up lies about Theranos. He wasn’t engaged in “fake news.” But he did suffer from a failure of imagination, like everyone else who couldn’t imagine that an earnest young entrepreneur would make the kind of exaggerated claims that Holmes made. And, having been persuaded, he became an unwitting tool in helping Holmes persuade others to believe the fiction and even to invest in it.
In his thought-provoking book “Talking to Strangers,” Malcolm Gladwell proposes that humans “default to truth” — we assume other people are telling the truth until enough evidence stacks up to persuade us otherwise. While this default results in occasional disasters, human society could not exist if we all assumed everyone else was lying all the time.
Parloff’s role at Fortune was, in a far less consequential way, reminiscent of the role The New York Times’ Judith Miller played in the run-up to the invasion of Iraq: Bush administration sources assured Miller that Saddam Hussein was busily amassing weapons of mass destruction. Miller reported as much, and then the Bush administration used The Times’ reporting to promote buy-in from Congress and the American public.
This kind of self-reinforcing feedback loop is not peculiar to journalists and their sources, of course, but the consequences are rarely as devastating. Most of Theranos’ investors — especially the big names like Murdoch, Walton and DeVos — could afford to lose their investments. That doesn’t mean they deserved to be lied to, any more than the physicians and customers who trusted the results of tests performed by Theranos.
Parloff accurately reported what Holmes told him. Despite his best efforts, he effectively became a stenographer rather than a journalist because the source he trusted was eager to mislead him and eager to enlist him in misleading the public. It gives me shivers and makes me wonder how many times I’ve been similarly misled by sources. I expect it’s the same feeling a doctor might have watching the Michael Keaton character in “Dopesick” or a money manager might have when considering the frauds of Bernie Madoff or “Sir” Allen Stanford. There but for the grace of God, right?
Parloff believes he could have done better, but it’s also true that in June 2014 he did not have what Carreyrou had when he started his reporting in early 2015: a former Theranos insider who was willing to sketch out the disconnect between what Holmes was claiming and what Theranos was actually doing.
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