Capitol Report: Mattis, Schultz among political elite with links to Theranos

James Mattis was one of many Washington insiders to serve on the board of Theranos, which the SEC charged with “massive fraud.”

Defense Secretary Jim Mattis was among the many high-profile political heavyweights with links to Theranos, the biotech charged with fraud by the Securities and Exchange Commission on Wednesday.

Mattis became a board director for Theranos in 2013 and quit only after he was nominated to be defense secretary.

Before joining the board, Mattis tried to get the Defense Department to procure Theranos equipment to use in Afghanistan, The Wall Street Journal reported. The department ultimately decided against doing so, though the U.S. Army awarded a contract to Theranos in 2012.

Two former secretaries of state, George Schultz and Henry Kissinger, as well as former Defense Secretary William Perry and ex-Sens. Bill Frist and Sam Nunn also were on the star-studded board.

Tyler Schultz, the grandson of the ex-secretary of state, was one of the Theranos employees who raised questions about the company and alerted a state regulator, according to a Wall Street Journal profile.

None of those board members were named individually in the SEC suit, which charged the company, founder Elizabeth Holmes and former company president, Ramesh Balwani. The SEC suit said Holmes was the primary liaison with the board.

The SEC did say that Holmes convinced the board — as well as shareholders — in early 2014 to split Theranos stock and give super voting powers to Holmes.

One board member — the SEC didn’t say which one — found out from Holmes in June 2014 that she was contemplating terminating the company’s relationship with a grocery chain that media reporting has shown to be Safeway. But Holmes continued to talk about the grocery relationship in meetings with investors after that.

The presidential campaign of Hillary Clinton had planned to hold a fundraiser at Theranos before moving it after media attention. Theranos founder Elizabeth Holmes participated in health-care summits sponsored by the Clinton Foundation.

Rupert Murdoch, the executive chairman of News Corp, invested $100 million in Theranos in a funding round that lasted between 2014 and 2015, according to a Wall Street Journal article. News Corp is the parent company of MarketWatch.

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