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The Role of Public Relations in Theranos’ Fall Up

I have been completely captivated with the story of Elizabeth Holmes and Theranos. I read numerous articles, listened to the ABC Radio & ABC News Nightline podcast series, “The Dropout,” and watched HBO’s documentary, “The Inventor: Out for Blood in Silicon Valley.” A major reason for my infatuation with this story is the role that public relations had in the company and Holmes’ fall to the top.

For those not as enraptured with this story as I am, here’s a quick recap: Stanford-dropout Elizabeth Holmes started Theranos, a diagnostics lab. Said lab developed a new technology that promised to disrupt the industry with a revolutionary finger-prick test to screen for hundreds of diseases with just a few drops of blood. The company, valued at $9 billion in 2015, was in partnership with Walgreens to operate “wellness centers” within their locations. Theranos has since been implicated in massive fraud with Holmes and Ramesh “Sunny” Balwani, former COO, both charged with nine federal counts of conspiracy and wire fraud.

Now back to PR’s Role in the drama.

During Theranos’ existence, the company and/or Holmes was featured favorably in Fortune Magazine, The New Yorker, Wired, Glamour and The New York Times Style Magazine, and more, including a few cover stories. Those five major publications alone reach more than 145 million people monthly. During the media interviews, specific details of the process and the system were hidden behind the terms “trade secrets” and “protection against competitive companies” – giving Holmes a virtual blank slate to tell her story unchallenged. Holmes and her team presented the technology rather broadly to media with one Fortune writer describing her explanation of the company as “comically vague.” However vague, these highly favorable media features (read: puff pieces) contributed to the meteoric rise of the Theranos brand. A Forbes feature article was even included in investor packets along with false claims attributed to General James Mattis that Theranos products were used by the U.S. military on the front lines (courtesy of Episode Six of “The Dropout” podcast.)

Although these reporters from very reputable publications have since offered retractions and apologies for their role in the perpetuation of Holmes and the Theranos lie, there is additional blame to be had. A 2018 Vox article details how Theranos’ public relations team was implicated in, at the very least, hiding the truth from journalists.

From the article: Now that Theranos has been implicated in massive fraud, that encounter serves as a reminder of the skepticism both journalists and health care consumers need to have in an age when public relations, marketing, and advertising try to guide the story and our treatment.”

As PR practitioners, we have responsibility not only to clients but also to the public. It’s unethical, no matter how massive or revolutionary the company, to perpetuate false news. Pro tip: if you have to intervene excessively and mediate what reporters will say and do during product reviews, site visits and executive interviews—stop pitching. There is a big difference between framing the story in a positive light to ensure the message is received as intended vs. flat out fraud. All the more so when we’re talking about a life and death technology that is in-market and being relied upon by consumers. Public relations teams who don’t conduct the due diligence to verify the accuracy of the details they are promoting are just as liable as the CEOs and COOs who choose to perpetuate such frauds.

Today, Theranos is dissolved and Holmes and Balwani are due in court in early July for  federal charges. Additionally, the pair was charged by the SEC for lying to the public about the company’s technology, business and financial performance. If you want to get knocked off the top of a mountain, flat out lies perpetuated by a PR machine is a sure bet.

It’s obvious that I’m not the only person obsessed with this story — Hulu recently confirmed  they will air a limited series entitled “The Dropout,” chronicling this story with Kate McKinnon playing Holmes. This will give all of us more time to explore in detail the role PR had in its success, and ultimately, its failure.

Ashleigh Artist is a TV aficionado and a pop culture addict. In her spare time she reviews TV shows and shares the latest entertainment news on her Instagram account, “WatchWithAsh”.

Stratacomm is a full-service, integrated communications agency. Among our services, we offer risk management and crisis communications (here are five questions to assess your organization’s level of crisis preparedness).  And for more on Stratacomm’s take on ethics, check out this recent podcast discussion.