James Mattis — Direct/Cross/Redirect
1,582 lines(GOVERNMENT'S WITNESS, JAMES MATTIS, WAS SWORN.)
JAMES MATTIS: I DO.
JUDGE DAVILA: PLEASE HAVE A SEAT HERE, SIR. I'LL INVITE YOU TO MAKE YOURSELF TO FEEL COMFORTABLE. ADJUST THE CHAIR AND MICROPHONE AS YOU NEED. I'LL ENCOURAGE YOU TO SPEAK DIRECTLY INTO THE MICROPHONE. WHEN YOU ARE COMFORTABLE, WOULD YOU PLEASE STATE YOUR NAME AND THEN SPELL IT, PLEASE.
JAMES MATTIS: MASK?
JUDGE DAVILA: MR. BOSTIC IS GOING TO ASK YOU A QUESTION ABOUT THAT.
JAMES MATTIS: OKAY. /// /// ///
DIRECT EXAMINATION BY MR. BOSTIC:
MR. BOSTIC: FOR NOW, IF YOU COULD STATE AND SPELL YOUR NAME FOR THE RECORD.
JAMES MATTIS: JAMES MATTIS, M-A-T-T-I-S.
MR. BOSTIC: THANK YOU. GENERAL MATTIS, IF YOU ARE VACCINATED AND COMFORTABLE REMOVING YOUR MASK, I UNDERSTAND FROM THE COURT THAT YOU'RE WELCOME TO DO SO.
JUDGE DAVILA: PLEASE DO.
JAMES MATTIS: THANK YOU.
JUDGE DAVILA: YOU'RE WELCOME.
BY MR. BOSTIC:
MR. BOSTIC: GOOD AFTERNOON AGAIN. LET ME START BY ASKING, WAS THERE A TIME WHEN YOU WERE ON THE BOARD OF DIRECTORS OF A COMPANY CALLED THERANOS?
JAMES MATTIS: YES.
MR. BOSTIC: WHAT WERE THE APPROXIMATE DATES OR YEARS WHEN YOU WERE ON THE THERANOS BOARD?
JAMES MATTIS: PROBABLY AUGUST, SEPTEMBER TIMEFRAME OF 2013 UNTIL DECEMBER, I BELIEVE, OF 2016.
MR. BOSTIC: AND PRIOR TO JOINING THE THERANOS BOARD OF DIRECTORS, DID YOU PREVIOUSLY HAVE ANY CONTACT WITH THE COMPANY THERANOS?
JAMES MATTIS: YES, I DID.
MR. BOSTIC: AT A HIGH LEVEL, WHAT WAS THE NATURE OF THAT CONDUCT, OR THAT CONTACT?
JAMES MATTIS: I WAS THE COMMANDER OF U.S. CENTRAL COMMAND, THE COMMAND COVERING THE MIDDLE EAST. I WAS IN SAN FRANCISCO TO GIVE A SPEECH, AND I MET MS. HOLMES AT THAT EVENT.
MR. BOSTIC: DID YOU CONTINUE TO HAVE CONVERSATIONS WITH MS. HOLMES FOLLOWING THAT INITIAL MEETING?
JAMES MATTIS: I DID.
MR. BOSTIC: WERE THOSE CONVERSATIONS ABOUT THE POSSIBILITY OF THERANOS USING -- OR EXCUSE ME. LET ME START AGAIN. WERE THOSE CONVERSATIONS ABOUT THE POSSIBILITY OF THE MILITARY USING THERANOS BLOOD TESTING TECHNOLOGY?
JAMES MATTIS: YES. I WAS BACKSTAGE FOR A SPEECH I WAS GOING TO GIVE IN SAN FRANCISCO. SHE PRICKED MY FINGER TO GIVE ME AN IDEA OF WHAT THE MACHINE BLOOD DRAW WAS SHE POINTED TO, I BELIEVE THAT'S WHEN I FIRST SAW THE MACHINE, A BOX-LIKE A DEVICE SITTING ON A BENCH RIGHT THERE, AND EXPLAINED ABOUT THE SPEED AND WHAT IT COULD DO.
MR. BOSTIC: APPROXIMATELY WHAT YEAR DID THAT FIRST CONTACT TAKE PLACE?
JAMES MATTIS: I BELIEVE 2000 -- I'M NOT SURE. EITHER 2011 OR 2012. I BELIEVE I CAN FIND IT FOR YOU IF YOU NEEDED IT.
MR. BOSTIC: THAT'S FINE FOR NOW. AND WE'LL CIRCLE BACK MORE TO THAT INITIAL MEETING AND WHAT YOU LEARNED. CAN YOU TELL US FIRST, THOUGH, ABOUT YOUR CAREER LEADING UP TO THAT TIME? GIVE US AN OVERVIEW OF YOUR CAREER LEADING UP TO THE 2011 TIMEFRAME.
JAMES MATTIS: I WAS IN COLLEGE IN 1969. THE DRAFT WAS ON. I JOINED THE MARINE RESERVES IN 1971 AFTER THREE YEARS AT WASHINGTON STATE COLLEGE. I WAS COMMISSIONED A SECOND LIEUTENANT IN THE MARINE CORPS. I WAS AN INFANTRY OFFICER FOR A LITTLE OVER 40 YEARS IN ACTIVE DUTY.
MR. BOSTIC: AND WHAT WAS YOUR POSITION OR TITLE IN 2011? LET'S START WITH YOUR RANK IN THE MILITARY. WHAT WAS YOUR RANK AT THAT TIME?
JAMES MATTIS: I WAS A GENERAL, FOUR STAR GENERAL IN 2010. I TOOK OVER U.S. CENTRAL COMMAND IN I BELIEVE AUGUST OF 2000 -- EXCUSE ME, 2010, AUGUST OF 2010. AND I WAS IN CHARGE OF MILITARY OPERATIONS IN THE MIDDLE EAST FROM EGYPT TO PAKISTAN FROM THE SAUDI ARABIA PENINSULA UP INTO SIBERIA.
MR. BOSTIC: AND YOU SAID IT'S CALLED CENTRAL COMMAND, THAT REGION?
JAMES MATTIS: YES.
MR. BOSTIC: AND IS THAT ALSO SHORTENED TO CENTCOM SOMETIMES?
JAMES MATTIS: IT IS, YES.
MR. BOSTIC: AND THAT GEOGRAPHICAL AREA THAT YOU JUST DESCRIBED, IS IT FAIR TO SAY THAT IT'S ONE OF THE MOST BUSY AREAS FOR MILITARY ACTIVITY?
JAMES MATTIS: YES. WE HAD ABOUT 200,000 U.S. TROOPS, ABOUT 50,000 ALLIED TROOPS, AND WE HAD ACTIVE OPERATIONS IN IRAQ, AFGHANISTAN, YEMEN, AND ELSEWHERE.
MR. BOSTIC: AND AS COMMANDER OF CENTCOM AT THAT TIME, WERE YOU OVERSEEING ALL OF THOSE SERVICE MEMBERS?
JAMES MATTIS: YES, SIR.
MR. BOSTIC: AND IN THAT POSITION, WERE YOU OVER MULTIPLE BRANCHES OF THE U.S. ARMED SERVICES?
JAMES MATTIS: YES, ARMY, NAVY, AIR FORCE, COAST GUARD, MARINE CORPS, PLUS THE ALLIED FORCES.
MR. BOSTIC: YOU TESTIFIED THAT YOU JOINED THE THERANOS BOARD IN 2013 AND WERE ON IT UNTIL 2016; IS THAT CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: CAN YOU BRIEFLY SUMMARIZE, AGAIN AT A HIGH LEVEL, YOUR CAREER POST THERANOS?
JAMES MATTIS: POST THERANOS?
MR. BOSTIC: YES, PLEASE.
JAMES MATTIS: YES. I WENT BACK INTO GOVERNMENT SERVICE FOR TWO YEARS AS THE SECRETARY OF DEFENSE.
MR. BOSTIC: LET'S GO BACK TO THAT ORIGINAL CONTACT WITH THERANOS AND YOUR MEETING WITH MS. HOLMES. IF I COULD DIRECT YOUR ATTENTION TO THE BINDER IN FRONT OF YOU, THERE'S A TAB LABELLED 5404. IF I COULD ASK YOU TO TURN TO THAT TAB, PLEASE. LET ME KNOW ONCE YOU'RE THERE. TAKE YOUR TIME.
JAMES MATTIS: 5404?
MR. BOSTIC: YES, 5404. TAKE YOUR TIME.
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND DO YOU RECOGNIZE THE DOCUMENT AT 5404?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS THE DOCUMENT?
JAMES MATTIS: IT'S AN EMAIL EXCHANGE BETWEEN MS. HOLMES AND MYSELF IN OCTOBER, NOVEMBER, OF 2011. THIS WAS WHILE I WAS COMMANDER OF U.S. CENTRAL COMMAND.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5404 INTO EVIDENCE.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5404 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: THANK YOU. MS. HOLLIMAN, IF WE COULD DISPLAY THAT EXHIBIT AND GO TO PAGE 5, PLEASE. LET'S START BY ZOOMING IN ON THE BOTTOM MESSAGE, PLEASE. THANK YOU.
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE ON YOUR SCREEN AN EMAIL FROM MS. HOLMES TO YOU ON AUGUST 26TH, 2011?
JAMES MATTIS: NO. IT'S FROM MS. HOLMES TO ADMIRAL SWEENEY.
MR. BOSTIC: THANK YOU. THANK YOU FOR CORRECTING ME. DOES THAT MESSAGE CONTAIN A NOTE ADDRESSED TO YOU, GENERAL MATTIS?
JAMES MATTIS: OH, YEAH, I SEE IT DOWN BELOW, YEAH.
MR. BOSTIC: AND DO YOU RECALL WHEN THIS HAPPENED IN RELATION TO WHEN YOUR FIRST MEETING WAS WITH MS. HOLMES? WOULD THIS HAVE BEEN AROUND THAT TIME OR A FEW WEEKS AFTER?
JAMES MATTIS: I BELIEVE IT WAS AROUND THAT TIME JUST FROM READING WHAT THE MESSAGE SAYS AND THE DATE ON IT.
MR. BOSTIC: LET'S ZOOM OUT, MS. HOLLIMAN, AND THEN GO TO THE MESSAGE AT THE TOP HALF OF THE PAGE. WE CAN JUST CAPTURE THE TEXT THERE. GENERAL MATTIS, DO YOU RECOGNIZE WHAT IS ON THE SCREEN NOW AS A MESSAGE THAT YOU SENT IN RESPONSE TO MS. HOLMES AROUND THAT TIME?
JAMES MATTIS: YES. THAT'S A NOTE FROM ME TO MS. HOLMES.
MR. BOSTIC: LET'S GO TO PAGE 3 OF THIS EXHIBIT IF WE CAN. LET'S ZOOM IN ON THE SECOND MESSAGE FROM THE BOTTOM. YES, FROM THERE DOWN. THANK YOU. GENERAL MATTIS, ARE YOU LOOKING NOW AT ANOTHER EMAIL MESSAGE FROM YOU TO MS. HOLMES?
JAMES MATTIS: YES, ON OCTOBER 8TH, 2011.
MR. BOSTIC: THE SECOND SENTENCE OF YOUR EMAIL THERE SAYS, "I'M TRYING TO FIND A WAY TO EMPLOY YOUR DEVICE ON A SWIFT 'PILOT PROJECT' OR 'PROOF OF PRINCIPLE' TO EXPEDITE ITS ENTRY TO OUR FORCES." CAN YOU EXPLAIN WHAT YOU MEANT BY THAT?
JAMES MATTIS: YEAH. I WAS TAKEN WITH THE IDEA THAT WITH ONE DROP OF BLOOD AND WITH REMOTE CAPABILITY, YOU COULD BASICALLY TEST FOR A BROAD ARRAY OF PROBLEMS. AND IN TRIAGE WHERE YOU HAVE CAUSALITIES GOING IN, THIS COULD BE VERY, VERY HELPFUL FOR MEDICAL PERSONNEL IF IT COULD DO WHAT SHE SAID IT COULD DO. AND SO I WANTED TO PUT IT ALONGSIDE WHAT WE WERE USING THEN, NOT TO DIAGNOSE, BUT TO PUT IT ALONGSIDE AND SEE IF IT PERFORMED AS STATED.
MR. BOSTIC: SO LET ME FOLLOW UP ON A COUPLE OF THINGS THERE. AT THIS POINT YOU HAD SOME LEVEL OF UNDERSTANDING ABOUT WHAT THE THERANOS TECHNOLOGY COULD SUPPOSEDLY DO; IS THAT CORRECT?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND WHERE DID THAT KNOWLEDGE COME FROM?
JAMES MATTIS: THE DISCUSSION I HAD WITH MS. HOLMES, IT WAS VERY RUDIMENTARY IN TERMS OF HOW MUCH BLOOD IT WOULD TAKE AND THAT IT COULD DO THE SAME TESTS AS WE WOULD BE DOING WITH ALL OF THE TUBES OF BLOOD THAT WE HAVE ALL GIVEN MANY TIMES.
MR. BOSTIC: BESIDES THE TYPE OF SAMPLE AND THE SIZE OF THE SAMPLE, DID YOU KNOW ANYTHING AT THIS POINT ABOUT THE SIZE OF THE DEVICE THAT WAS USED, OR THAT WOULD BE USED TO PERFORM THOSE TESTS?
JAMES MATTIS: YES, THERE WAS A -- I DON'T KNOW IF IT WAS THE REAL DEVICE OR A FACSIMILE OF IT, BUT SHE POINTED TO THE SIZE OF THE MACHINE. I BELIEVE THE MACHINE WAS THERE. IT MIGHT HAVE BEEN A PICTURE, BUT I'M PRETTY SURE THE MACHINE WAS THERE. IT WAS -- AGAIN, THIS WAS BACKSTAGE I THINK JUST BEFORE I'M GOING TO GIVE A SPEECH OR JUST AFTERWARDS BEFORE A DINNER. BUT IT WAS -- THAT'S ABOUT -- I'VE TOLD YOU JUST ABOUT AS MUCH AS I KNEW. VERY RUDIMENTARY WHAT I KNEW ABOUT AT THAT POINT, OTHER THAN IT GOT MY INTEREST.
MR. BOSTIC: AND BASED ON THE EITHER THE EXAMPLE YOU SAW OR MS. HOLMES'S DESCRIPTION, WHAT DID YOU UNDERSTAND THE SIZE OF THE DEVICE TO BE? HOW BIG WAS IT?
JAMES MATTIS: OH, PROBABLY -- I CAN'T REALLY -- I DON'T KNOW. MAYBE A FOOT AND A HALF -- 2 FEET WIDE, 2 FEET DEEP AND 18 INCHES HIGH IF I RECALL RIGHT, ABOUT SOMETHING LIKE THAT.
MR. BOSTIC: APPROXIMATELY?
JAMES MATTIS: APPROXIMATELY. SOMETHING THAT COULD BE PUT INTO CONSTRAINED SPACES.
MR. BOSTIC: BASED ON THAT KNOWLEDGE, YOU WERE INTERESTED IN POSSIBLE MILITARY APPLICATIONS FOR THE DEVICE?
JAMES MATTIS: YES.
MR. BOSTIC: AND YOU JUST TESTIFIED ABOUT THE NATURE OF THIS PILOT PROJECT OR PROOF OF PRINCIPLE. CAN YOU SAY MORE ABOUT THAT? HOW WOULD IT BE THE SAME AS OR DIFFERENT FROM ACTUALLY USING THE DEVICE FOR DIAGNOSTIC PURPOSES?
JAMES MATTIS: WELL, BY DOING IT THIS WAY, WE COULD DO A SIDE-BY-SIDE COMPARISON, WHAT ARE WE DOING RIGHT NOW IN THEATRE? WE WERE TAKING CASUALTIES -- IT WAS TOUGH FIGHTING AT THAT POINT -- AND PUT IT RIGHT ALONGSIDE IT. AND DON'T USE IT FOR DIAGNOSIS, BUT THEN COMPARE THE RESULT AND PUT THE BLOOD THROUGH USING THAT PROCESS AND SEE WHAT HAPPENED. WAS IT MORE ACCURATE? WAS IT FASTER? YOU KNOW, THESE KIND OF ASPECTS TO IT. AND THEN WE WOULD KNOW IF WE WERE REALLY INTERESTED IN BRINGING IT IN THEATRE.
MR. BOSTIC: YOU SAID THIS WOULD BE A COMPARISON. DO YOU MEAN A COMPARISON BETWEEN THE THERANOS TECHNOLOGY AND CONVENTIONAL BLOOD ANALYZERS?
JAMES MATTIS: EXACTLY.
MR. BOSTIC: WHY NOT JUST MOVE RIGHT TO USING IT FOR DIAGNOSTIC PURPOSES? WHY WAS IT NECESSARY TO GO THROUGH THIS TESTING PROCESS FIRST?
JAMES MATTIS: WELL, IN BOTH THE CIVILIAN WORLD AND THE MILITARY WORLD -- I CAN SPEAK MOST AUTHORITATIVELY IN THE MILITARY WORLD -- ALTHOUGH THEY BOTH USE SOME OF THE SAME CERTIFICATIONS, IT'S A VERY REGULATED INDUSTRY. AND CONSIDERING THAT WE DEAL WITH A LOT OF VIOLENCE AND WE WERE TAKING A LOT OF CASUALTIES, YOU DON'T TAKE CHANCES ON SOMETHING LIKE THAT. IT NEEDS TO PROVE ITSELF BEFORE IT'S BROUGHT IN, AND THERE'S A CERTIFICATION PROCESS IT HAS TO GO THROUGH, BUT I WANTED TO GET IT STARTED.
MR. BOSTIC: LET'S LEAVE PAGE 3 AND GO TO PAGE 1 OF THIS EXHIBIT, PLEASE. ONCE WE'RE AT PAGE 1, LET'S ZOOM IN ON THE TOP EMAIL MESSAGE, PLEASE. GENERAL MATTIS, DO YOU SEE ANOTHER EMAIL FROM MS. HOLMES TO YOU, THIS ONE DATED NOVEMBER 20TH, 2011?
JAMES MATTIS: YES.
MR. BOSTIC: AND IN THAT MESSAGE, MS. HOLMES SAYS, "IT IS ON US TO DRIVE FORWARD AND GET A PILOT." DO YOU SEE THAT?
JAMES MATTIS: YES, I DO.
MR. BOSTIC: AND IS THAT PILOT REFERRING TO THE TESTING PROCESS THAT YOU WERE REFERENCING?
JAMES MATTIS: YES. THAT'S HOW I INTERPRET IT, BUT I'M CERTAIN THAT IT IS.
MR. BOSTIC: THE LINE BELOW THAT SAYS, "WE WILL DO ALL IT TAKES TO MAKE THIS HAPPEN AND WORK THROUGH THIS PROCESS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND IS THAT CONSISTENT WITH WHAT MS. HOLMES WAS SIGNALLING TO YOU ABOUT THERANOS'S INTEREST IN THIS PARTNERSHIP?
JAMES MATTIS: SHE SUMS IT UP RIGHT THERE, YES.
MR. BOSTIC: WE TALKED A LITTLE BIT ABOUT YOUR UNDERSTANDING AT THAT TIME OF WHAT THE THERANOS TECHNOLOGY WAS. WE TALKED ABOUT THE DEVICE, THE METHOD OF FINGERSTICK SAMPLE DRAW. AROUND THAT TIME, DID YOU UNDERSTAND THAT THE THERANOS DEVICE -- SORRY, THAT THE THERANOS TECHNOLOGY INCLUDED A SINGLE DEVICE THAT COULD DO ALL OF THE TESTS OR MULTIPLE DEVICES?
JAMES MATTIS: WELL, IT WAS A SINGLE DEVICE. THAT'S WHY I WAS INTERESTED IN IT.
MR. BOSTIC: AND WHY WAS THAT YOUR UNDERSTANDING, THAT IT WAS A SINGLE DEVICE?
JAMES MATTIS: WELL, ON THE SMALLER SHIPS, MY SHIPS OUT AT SEA, THEY DON'T HAVE A DOCTOR. THEY HAVE WHAT YOU WOULD CALL A MEDIC IN THE ARMY OR AIR FORCE, THEY HAVE A CHIEF HOSPITAL CORPSMAN. AT REMOTE OUTPOSTS YOU HAVE MEDICS, YOU DON'T HAVE DOCTORS IN THE SMALL OUTPOSTS, FOR EXAMPLE, IN THE HINDU KUSH. AND SO IF YOU CAN PUT ONE OF THESE IN AND HAVE SOMEONE WITH LIMITED MEDICAL KNOWLEDGE TRAINED TO USE IT, IT COULD MAKE A BIG DIFFERENCE. RIGHT THERE AT THE POINT WHERE THE CASUALTY OR THE ILLNESS IS TAKING PLACE, YOU CAN DETERMINE, DO YOU NEED TO DO A MEDEVAC IN THE MIDDLE OF THE NIGHT, IN THE MIDDLE OF A STORM OR SOMETHING LIKE THAT IF THEY HAD SOMETHING LIKE THIS, IF IT COULD DO THIS. IT WOULD ALSO HELP US IN TRIAGE IF YOU HAD A NUMBER OF CASUALTIES AT ONE TIME. AND WHAT SHE ALLUDED TO ME ABOUT THE SPEED OF THIS, IT COULD HELP DOCTORS MAKE DECISIONS IN TRIAGE OF WHO GETS TREATED FIRST AND WHO IS MOST IN NEED OF CARE.
MR. BOSTIC: IF IT WERE THE CASE THAT ONE DEVICE COULD NOT PERFORM ALL OF THE TESTS AND MULTIPLE DEVICES WERE NEEDED, WOULD THAT HAVE DECREASED OR AFFECTED YOUR INTEREST IN THIS TECHNOLOGY?
JAMES MATTIS: I WOULDN'T BE TALKING ABOUT IT FROM THIS POSITION HERE. THE REASON I WAS INTERESTED IS BECAUSE IT WAS ONE DEVICE THAT COULD DO THIS. THAT WAS WHY I WAS INTERESTED. YEAH, I PROBABLY WOULD NOT HAVE BEEN INTERESTED IF IT WAS GOING TO BE SOMETHING THAT WE HAVE TO BRING IN A LOT OF OTHER STUFF FOR.
MR. BOSTIC: HOW ABOUT THE SIZE OF THE DEVICE? WAS THE RELATIVELY SMALL SIZE OF THE ANALYZER AN IMPORTANT FACTOR IN YOUR INTEREST?
JAMES MATTIS: ABSOLUTELY. YOU HAVE LIMITED ROOM IN A SICK BAY ON A SHIP, AND IT'S A RUGGED ENVIRONMENT WHEN YOU'RE OUT IN THE FIELD AT SOME OF THE OUTPOSTS. SO ONE DEVICE IS EASIER TO INCORPORATE. ONE DEVICE IS EASIER TO KEEP CLEAN, OR AT LEAST TRYING TO KEEP FROM BEING IN A PLACE WHERE IT'S GOING TO GET BEAT UP BY THE ENVIRONMENT.
MR. BOSTIC: IF INSTEAD YOUR UNDERSTANDING AT THE TIME WAS THAT ADDITIONAL DEVICES, INCLUDING SOME DEVICES UP TO THE SIZE OF, SAY, A REFRIGERATOR OR A LARGE COPIER WOULD BE NEEDED, WOULD YOU STILL HAVE BEEN JUST AS INTERESTED IN THE THERANOS TECHNOLOGY?
JAMES MATTIS: NO.
MR. BOSTIC: IN SELECTING OR EVALUATING THIS KIND OF DEVICE OR TECHNOLOGY FOR MILITARY USE, WOULD ACCURACY OF THE TESTING ALSO BE IMPORTANT?
JAMES MATTIS: WELL, WE -- WE TAKE CAUSALITIES IN OUR LINE OF WORK. ACCURACY IS CRITICAL BECAUSE A LOT OF OUR CASUALTIES ARE EMERGENCY. WHAT I WAS CONCERNED WITH IN THEATRE WAS NOT THE KIND OF MEDICAL CARE OF A COMMUNITY HOSPITAL. IT WAS PEOPLE WHO WERE INJURED USUALLY WITH FRAGMENTATION OR CONCUSSION INJURIES, THAT SORT OF THING THAT NEEDED IMMEDIATE LIFE SAVING CARE, OR CERTAINLY THE KIND OF CARE THAT WOULD KEEP THEM FROM LOSING A LIMB OR SOMETHING LIKE THAT.
MR. BOSTIC: SO, IN OTHER WORDS, THE STAKES ARE VERY HIGH?
JAMES MATTIS: YES, THE STAKES ARE VERY HIGH.
MR. BOSTIC: WHAT ABOUT RELIABILITY OF THE DEVICE? THE ABILITY OF THE DEVICE TO KEEP FUNCTIONING, NOT TO BREAK DOWN AND TO RETURN CONSISTENT RESULTS, WOULD THOSE THINGS BE IMPORTANT?
JAMES MATTIS: THEY WOULD BE, BUT THAT WOULD BE DETERMINED IN THE SIDE-BY-SIDE TEST. I WASN'T MAKING AN ASSUMPTION THAT IT WOULD OR WOULD NOT. I JUST WANTED TO GET IT OUT THERE SO THE MILITARY DOCTORS -- THERE'S NOTHING LIKE SEEING SOMETHING IN ACTION TO SAY LET'S GET IT AND BUILD THE SUPPORT FOR SOMETHING LIKE THIS THAT WAS SO NEW. I MEAN, I WAS, FRANKLY, AMAZED AT WHAT WAS POSSIBLE.
MR. BOSTIC: AND, AGAIN, THAT WAS BASED ON WHAT MS. HOLMES WAS TELLING YOU AT THE TIME?
JAMES MATTIS: TOTALLY, YES. I HAD NO OTHER SOURCE OF INFORMATION ON IT.
MR. BOSTIC: THE TEST THAT WE HAVE BEEN TALKING ABOUT, EXCUSE ME, WAS IT YOUR UNDERSTANDING THAT A SUCCESSFUL OUTCOME ON THAT TEST WOULD BE A PREREQUISITE TO THE MILITARY ACTUALLY USING THE DEVICE FOR TREATING SOLDIERS?
JAMES MATTIS: IT WAS CERTAINLY A PREREQUISITE FOR ME SUPPORTING TO MOVE FORWARD AND SAY WE OUGHT TO DO THIS.
MR. BOSTIC: WE'VE TALKED SO FAR ABOUT YOUR UNDERSTANDING AND IMPRESSION OF THE TECHNOLOGY AT THAT TIME. HOW ABOUT MS. HOLMES HERSELF? WHAT WAS YOUR IMPRESSION OF HER? HOW DID SHE STRIKE YOU?
JAMES MATTIS: SHARP, ARTICULATE, COMMITTED.
MR. BOSTIC: WERE YOU IMPRESSED BY HER PERSONALLY?
JAMES MATTIS: I WAS. THAT DIDN'T TAKE THE PLACE FOR HAVING THE DEVICE PROVE ITSELF.
MR. BOSTIC: IF I COULD ASK YOU TO TURN IN YOUR BINDER TO EXHIBIT 5409.
JAMES MATTIS: UH-HUH. OKAY.
MR. BOSTIC: OKAY. AND ONCE YOU'RE THERE, LET ME KNOW IF YOU RECOGNIZE THAT EXHIBIT.
JAMES MATTIS: YES. IT'S AN EMAIL CHAIN BETWEEN MS. HOLMES AND I -- ME. IT LOOKS LIKE MARCH OF 2013. I THINK THIS IS IMMEDIATELY FOLLOWING MY LEAVING U.S. CENTRAL COMMAND. I'M NOT SURE OF THE DATE, BUT IT'S CERTAINLY AROUND THE DATE I LEFT U.S. CENTRAL COMMAND AS COMMANDER.
MR. BOSTIC: UNDERSTOOD. YOUR HONOR, WE MOVE IN EXHIBIT 5409.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5409 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MS. HOLLIMAN, IF WE CAN ZOOM IN ON THE TWO BOTTOM EMAILS. THANK YOU.
MR. BOSTIC: GENERAL MATTIS, ARE THESE THE EMAILS THAT WE HAVE BEEN LOOKING AT BETWEEN YOU AND MS. HOLMES IN MARCH 2013?
JAMES MATTIS: YES.
MR. BOSTIC: AND IN THE BOTTOM MESSAGE, MS. HOLMES WRITES TO YOU, "WE ARE MAKING SURE THAT OUR DEPLOYMENT IS DONE RIGHT AND ARE VERY CLOSE TO ACTIVATING OUR PROGRAM. I WISH YOU COULD HAVE BEEN HERE WHEN WE GO LIVE. I VERY MUCH LOOK FORWARD TO HAVING THE OPPORTUNITY TO BRIEF YOU ON IT WHEN WE DO." DO YOU SEE THAT?
JAMES MATTIS: I DO.
MR. BOSTIC: AND AT THIS POINT IN TIME, WOULD THIS HAVE BEEN REFERRING TO A DEPLOYMENT WITH THE U.S. MILITARY?
JAMES MATTIS: ABSOLUTELY. I THINK THAT'S WHY SHE WOULD HAVE BEEN CONTACTING ME ABOUT IT. I'M SURE THAT'S WHAT IT IS.
MR. BOSTIC: LET ME DIRECT YOUR ATTENTION TO THE EMAIL ABOVE THAT, WHICH IS A MESSAGE FROM YOU TO MS. HOLMES. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND IN THAT EMAIL YOU SAY, "I'M A STRONG BELIEVER IN WHAT YOU HAVE DESIGNED/BUILT AND HOPE THAT WE CAN GET IT IN THEATRE SOON TO TEST IT." DO YOU SEE THAT?
JAMES MATTIS: YES, ABSOLUTELY.
MR. BOSTIC: AROUND THIS TIME -- WE HAVE BEEN TALKING ABOUT THE TESTING PROCESS THAT THE MILITARY WOULD HAVE TO GO THROUGH BEFORE IT USE THE DEVICE.
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND AT THIS POINT IN MARCH OF 2013, HAD THAT TESTING PROCESS COMPLETED?
JAMES MATTIS: NO, IT HAD NOT. WE HAD BEEN UNSUCCESSFUL AT GETTING IT INTO THEATRE.
MR. BOSTIC: AND HAD THAT TESTING PROCESS IN THEATRE EVEN STARTED AS FAR AS YOU KNOW IN MARCH OF 2013?
JAMES MATTIS: NO, NO, IT HAD NOT.
MR. BOSTIC: AT THIS POINT WERE YOU STILL INTERESTED, THOUGH, IN THE THERANOS TECHNOLOGY AND HOPING THAT TEST COULD HAPPEN?
JAMES MATTIS: THE CAUSALITIES HAD NOT RELENTED. I WAS INTERESTED IN ANYTHING THAT COULD PROMISE SOME IMPROVEMENT IN THE CARE OF THE CAUSALITIES.
MR. BOSTIC: SO FAR WE'VE GONE FROM NOVEMBER OF 2011 UP TO MARCH OF 2013; CORRECT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: WHAT WAS YOUR UNDERSTANDING AT THE TIME OF WHY THIS TEST HAD NOT YET BEGUN, THE MILITARY TEST OF THERANOS TECHNOLOGY?
JAMES MATTIS: WELL, I CAN'T GIVE YOU A DETAILED BLOW BY BLOW, BUT WHEN I WOULD COME BACK, I WOULD TURN IT OVER TO MY CHIEF OF STAFF WHO RUNS THE STAFF WHEN I'M OUT TRAVELLING TO THEATRE AND ALL, AND HE WAS WORKING IT. I THINK THAT MY SURGEON AND MY JUDGE ADVOCATE WERE WORKING IT AS WELL. MY GOAL WAS TO GET IT IN FOR THE SIDE-BY-SIDE FOLLOWING ALL LEGAL AND ETHICAL -- AND I HIGHLIGHTED THIS IN MY VERBAL TALKS, WHICH I THINK YOU'LL FIND IN SOME OF THE EMAILS AS WELL -- AND I WAS A STRONG BELIEVER IN GETTING THIS IN THEATRE SO IT COULD EITHER STAND AND DELIVER, OR IT WOULDN'T. BUT I DID NOT WANT TO MISS AN OPPORTUNITY IF THIS WAS GOING TO DELIVER THIS AND SAY WE SAT ON OUR HANDS AT A TIME WHEN SOMETHING COULD HAVE HELPED.
MR. BOSTIC: LET'S ZOOM OUT AND ZOOM BACK IN ON THE MIDDLE MESSAGE IN THIS PAGE FROM MS. HOLMES. GENERAL MATTIS, DO YOU SEE ON THE SCREEN A MESSAGE FROM MS. HOLMES TO YOU, EXCUSE ME, ON MARCH 26TH, 2013?
JAMES MATTIS: YES.
MR. BOSTIC: AND IN THAT MESSAGE, DOES SHE WRITE: "THIS INITIATIVE IS OUR SMALL WAY OF BEING ABLE TO SERVE AND WE WILL DO WHATEVER IT TAKES TO MAKE IT SUCCESSFUL"?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AROUND THIS TIME, WAS MS. HOLMES CONTINUING TO EXPRESS INTEREST ON BEHALF OF THERANOS AND MOVING FORWARD WITH THIS PARTNERSHIP?
JAMES MATTIS: YES. MY CONCERN -- I TOOK HER AT HER WORD. SHE, SHE MOVED WHAT I THOUGHT WAS FORWARD ON IT, AND I WAS JUST TRYING TO GET THE MILITARY SIDE TO OPEN THE DOOR TO THE SIDE-BY-SIDE TEST SO LONG AS THERE WAS NO RULE BARRING IT, AND I LEFT THAT IN THE HANDS OF MY CHIEF OF STAFF. THIS WAS NOT A SIGNIFICANT ISSUE CONSIDERING EVERYTHING THAT WE WERE DEALING WITH IN THE CENTRAL COMMAND REGION, THE MIDDLE EAST REGION AT THIS POINT. BUT IT WAS SOMETHING THAT I DIDN'T WANT TO HAVE SIMPLY PEOPLE GO TO SLEEP ON AND NOT TAKE ADVANTAGE OF IT IF IT WOULD HELP.
MR. BOSTIC: AND AT THIS POINT WERE YOU AWARE OF ANY HOLDUPS ON THE THERANOS SIDE OF THINGS? IN OTHER WORDS, WAS THE COMPANY READY TO MOVE FORWARD WITH THIS TEST BASED ON YOUR UNDERSTANDING?
JAMES MATTIS: THESE EMAILS ARE PROBABLY ALL I HAD, BUT IT WAS ELIZABETH'S REASSURANCE THAT SHE WAS READY TO MOVE FORWARD. SO MY FRUSTRATION WAS MOSTLY DIRECTED TO MY CHIEF OF STAFF ABOUT SAYING YES OR NO, IT CAN BE BROUGHT IN FOR A PILOT PROJECT, A SIDE-BY-SIDE COMPARISON, OR IT CANNOT.
MR. BOSTIC: DO YOU RECALL AT ANY POINT MS. HOLMES TELLING YOU THERANOS DID NOT HAVE THE RESOURCES TO MOVE FORWARD WITH THE MILITARY TESTS OR PARTNERSHIP?
JAMES MATTIS: NO. SHE APPEARED VERY AGGRESSIVE IN WANTING TO GET IT IN.
MR. BOSTIC: AT ANY POINT DO YOU RECALL MS. HOLMES TELLING YOU THAT THE COMPANY WOULD NEED TO PRIORITIZE THE COMMERCIAL LAUNCH OVER THE PARTNERSHIP WITH THE MILITARY?
JAMES MATTIS: SHE NEVER MENTIONED COMMERCIAL LAUNCH IN ANY CONTEXT TO ME. I MEAN, I ASSUMED IT WAS GOING ON, BUT IT WAS NOT THE SUBJECT OF OUR EMAILS AT ANY POINT THAT I RECALL.
MR. BOSTIC: WE'RE NOW IN MARCH OF 2013 WITH THIS CORRESPONDENCE. DID YOU STILL HAVE THE SAME UNDERSTANDING AT THAT TIME WHAT THE THERANOS TECHNOLOGY WAS AND WHAT IT COULD DO?
JAMES MATTIS: YES, I WAS STILL IN THE VERY RUDIMENTARY STAGE AND I JUST -- IT WAS, IT WAS PROMISING TO ME, BUT WE, WE WOULD HAVE TO SEE IF IT COULD DELIVER, AND SO THAT'S ABOUT AS MUCH AS I KNEW ABOUT IT.
MR. BOSTIC: AND BASED ON YOUR CONVERSATIONS WITH MS. HOLMES, DID YOU STILL UNDERSTAND THAT THE THERANOS TECHNOLOGY WAS EMBODIED IN ONE DEVICE THAT COULD PERFORM ALL OF THE TESTS?
JAMES MATTIS: YES. I WOULD NOT HAVE BEEN INTERESTED IN IT WERE IT NOT.
MR. BOSTIC: AT ANY POINT DURING THIS TIME PERIOD THAT WE'VE BEEN TALKING ABOUT, DID MS. HOLMES TELL YOU THAT, FOR EXAMPLE, THE COMPANY NEEDED MORE TIME TO WORK ON DEVELOPING THE DEVICE BEFORE IT WOULD BE READY FOR USE BY THE MILITARY?
JAMES MATTIS: WELL, I THINK MY IMPRESSION AT THE TIME WAS THAT IT WAS A STARTUP, MOVING OUT OF STARTUP TERRITORY AND BRINGING IT FORWARD. I ASSUMED, AS NEW AS IT WAS, I MEAN, IT WOULD PROBABLY BE MORE WORK GOING ON WITH IT, BUT, NO, IT WAS -- I MEAN, SHE WAS VERY CONFIDENT THAT IF WE GOT IT IN THERE, IT WOULD PROVE ITSELF.
MR. BOSTIC: BECAUSE IT WAS A STARTUP, DID THAT FACTOR INTO THE NEED FOR THE TECHNOLOGY TO PROVE ITSELF IN YOUR MIND?
JAMES MATTIS: I WOULD HAVE REQUIRED THE SAME THING IF IT WAS AN ESTABLISHED COMPANY. AND IT WASN'T THAT MUCH OF A STARTUP. SHE HAD BEEN WORKING ON THIS FOR A WHILE. SHE TOLD ME WHEN SHE LEFT COLLEGE WHEN WE WERE HAVING A SHORT TALK THERE BEHIND THE CURTAIN, SO TO SPEAK, AND SO I KNEW SHE HAD BEEN WORKING ON THIS AND PUTTING A LOT OF EFFORT INTO IT FOR YEARS.
MR. BOSTIC: AND MOVING FORWARD IN TIME -- WELL, LET ME JUST ASK YOU, SITTING HERE TODAY, ARE YOU AWARE OF THE THERANOS TECHNOLOGY EVER BEING USED BY CENTRAL COMMAND TO TREAT SOLDIERS?
JAMES MATTIS: IT HAD NOT BEEN USED PRIOR TO MY DEPARTURE, AND I'M NOT AWARE OF IT BEING USED SINCE I LEFT, BUT I'M NOT IN THE CHAIN OF COMMAND ANYMORE EITHER.
MR. BOSTIC: AND WHEN YOU SAY PRIOR TO YOUR DEPARTURE, DO YOU MEAN YOUR DEPARTURE FROM THE MILITARY?
JAMES MATTIS: NO, FROM U.S. CENTRAL COMMAND IN MARCH OF 2013.
MR. BOSTIC: OKAY. HOW ABOUT DURING YOUR TIME AT THERANOS? I'D LIKE TO CONSIDER THAT TIME, TOO. WHEN YOU WERE ON THE BOARD OF DIRECTORS FROM 2013 TO 2016, DID YOU BECOME AWARE DURING THAT TIME OF THERANOS TECHNOLOGY BEING USED BY CENTRAL COMMAND TO TEST SOLDIERS?
JAMES MATTIS: NO.
MR. BOSTIC: TO YOUR KNOWLEDGE, INCLUDING THAT TIME PERIOD WHEN YOU WERE WITH CENTRAL COMMAND AND THE TIME WHEN YOU WERE WITH THERANOS, WAS THE THERANOS ANALYZER EVER ACTUALLY DEPLOYED AND PUT INTO THE FIELD BY THE MILITARY?
JAMES MATTIS: I'M NOT AWARE OF IT.
MR. BOSTIC: AND SAME QUESTION. BASED ON YOUR KNOWLEDGE, WAS THE THERANOS ANALYZER EVER USED BY THE MILITARY IN THE TREATMENT OF SERVICE MEMBERS?
JAMES MATTIS: I'M NOT AWARE OF IT.
MR. BOSTIC: TO YOUR KNOWLEDGE, WAS THE THERANOS ANALYZER EVER EQUIPPED OR INSTALLED ON A MILITARY HELICOPTER FOR THAT PURPOSE?
JAMES MATTIS: AGAIN, I'M NOT AWARE OF IT.
MR. BOSTIC: AND FINALLY, ARE YOU AWARE OF THE THERANOS ANALYZER EVER BEING USED TO PROVIDE MEDICAL SERVICES FOR SOLDIERS DURING CLANDESTINE OPERATIONS?
JAMES MATTIS: NO, I AM NOT.
MR. BOSTIC: DO YOU RECALL AT SOME POINT VISITING THE THERANOS HEADQUARTERS?
JAMES MATTIS: WHILE ON ACTIVE DUTY OR -- NO.
MR. BOSTIC: WELL, LET ME ASK -- DO YOU RECALL THE FIRST TIME THAT YOU VISITED THERANOS'S HEADQUARTERS?
JAMES MATTIS: YES. WELL, I'M NOT QUITE CERTAIN OF THE DATE, BUT IT WAS LATER IN 2013 AFTER I HAD RETIRED FROM THE MILITARY.
MR. BOSTIC: DO YOU RECALL TAKING A TOUR OF THE FACILITY AT THAT POINT?
JAMES MATTIS: YES. I WAS WITH MS. HOLMES, AND WE WALKED IN AND AROUND THE FACILITY, YES.
MR. BOSTIC: AND DO YOU RECALL EITHER WAY WHETHER ON THAT OCCASION YOU HAD A CHANCE TO LOOK AT THE SMALL THERANOS ANALYZER THAT WE DISCUSSED EARLIER?
JAMES MATTIS: YES. YES, I RECALL IT.
MR. BOSTIC: AND DID YOU HAVE A CHANCE TO SEE THAT SMALL ANALYZER IN PLACE?
JAMES MATTIS: I DID SEE IT. I DON'T RECALL THE EXACT DATE, BUT IT WAS I THINK LATER IN 2013.
MR. BOSTIC: ON THAT SAME VISIT, DO YOU RECALL SEEING ANY LARGER COMMERCIAL BLOOD ANALYZERS MADE BY OTHER COMPANIES?
JAMES MATTIS: NO.
MR. BOSTIC: DID THERE COME A TIME WHEN MS. HOLMES INVITED YOU TO JOIN THE THERANOS BOARD OF DIRECTORS?
JAMES MATTIS: YES.
MR. BOSTIC: AND DID YOU ACCEPT THAT INVITATION?
JAMES MATTIS: I DID, AFTER ASKING HER WHY. I WAS NOT A MEDICAL PERSON.
MR. BOSTIC: WHAT WAS HER ANSWER TO THE QUESTION OF WHY SHE WANTED YOU ON THE BOARD?
JAMES MATTIS: TO HELP BUILD -- HELP HER BUILD A CORPORATE CULTURE, HOW TO BUILD ELITE TEAMS, HOW TO GET COMMITMENT OUT OF PEOPLE. IT WAS ABOUT MANAGEMENT, ABOUT PERSONNEL, THOSE AREAS.
MR. BOSTIC: SORRY IF I ASKED ALREADY, BUT DID YOU ACCEPT THAT INVITATION TO JOIN THE BOARD?
JAMES MATTIS: I DID, YES.
MR. BOSTIC: AND WHY DID YOU WANT TO BE ON THE THERANOS BOARD AT THAT TIME?
JAMES MATTIS: WELL, IT WAS PRETTY BREATHTAKING, NUMBER ONE, WHAT SHE WAS TALKING ABOUT DOING. AND I THOUGHT IT WAS A VERY WORTHY PROJECT IF, IN FACT, IT WAS GOING TO REDUCE THE COST OF HEALTH CARE FOR THE FIRST TIME EVER, WHICH WAS ONE OF THE THINGS SHE MENTIONED TO ME. IT WAS NOT SOMETHING I HAD BEEN INTERESTED IN IN THE MILITARY BECAUSE WE DON'T CHARGE FOR HEALTH CARE FOR OUR TROOPS OBVIOUSLY. BUT ALSO THE ACCURACY AND THE -- JUST THE SPEED THAT -- I MEAN, JUST FROM MY BACKGROUND, I COULD UNDERSTAND HOW THIS WOULD BE VERY HELPFUL IN EVERY SETTING, EVERY MEDICAL SETTING.
MR. BOSTIC: SO EVEN THOUGH YOU HAD LEFT CENTRAL COMMAND AT THIS TIME, WERE THE POTENTIAL MILITARY APPLICATIONS PART OF WHAT MADE YOU EXCITED ABOUT THE COMPANY?
JAMES MATTIS: THE POTENTIAL MILITARY APPLICATIONS WERE OBVIOUSLY WHAT HELPED FORM MY OPINIONS ON THIS BECAUSE THERE'S NOTHING LIKE TAKING CAUSALITIES TO WANT TO IMPROVE HEALTH CARE. BUT AT THE SAME TIME, HAVING LEFT THE MILITARY, I HAD TO GET A COUNSEL TO THE COMMANDANT APPROVAL THAT THIS WAS NOT VIOLATING ANY ETHICAL REGULATIONS, AND I KNEW I WAS GOING TO STAY WELL APART FROM ANY KIND OF MILITARY APPLICATION SO THERE COULD NOT BE ANY MISCONSTRUING THAT I WAS BRINGING MY PAST RANK TO BEAR ON THAT.
MR. BOSTIC: AND DID YOU OBTAIN THAT APPROVAL SO THAT YOU WERE CLEARED TO JOIN THE BOARD?
JAMES MATTIS: I DID.
MR. BOSTIC: AT THE TIME, WHAT WAS YOUR UNDERSTANDING OF WHAT THE ROLE OF THE BOARD OF DIRECTORS WOULD BE AT THE COMPANY?
JAMES MATTIS: ADVISORY DUTIES. SHE TALKED TO ME WHEN SHE MADE THE OFFER AND I CAUTIONED HER THAT I WAS NOT A MEDICAL PERSON, AND SHE SAID SHE WAS LOOKING AT DOCTORS AND PEOPLE WITH MEDICAL BACKGROUNDS AND BUSINESS BACKGROUNDS TO COVER CERTAIN ASPECTS OF BUILDING OUT A BOARD.
MR. BOSTIC: SPEAKING OF THAT BOARD, YOU SAID THAT YOU WERE ON THE BOARD FROM 2013 TO 2016; IS THAT CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. BOSTIC: AND DURING THAT TIME PERIOD, COULD YOU GIVE US AN IDEA OF WHO ELSE WAS ON THE THERANOS BOARD? I WON'T ASK YOU TO GIVE US AN EXCLUSIVE LIST, BUT IF YOU COULD GIVE US SOME EXAMPLES AND DESCRIBE THEIR BACKGROUND A LITTLE BIT.
JAMES MATTIS: THERE WAS DAVID BOIES, HE WAS A LAWYER WITH A LOT OF LEGAL BACKGROUND SHE BROUGHT ON. AND SHE TALKED TO US ABOUT SOME OF THESE EFFORTS TO BRING PEOPLE ON BEFORE SHE GOT THEM THERE, SO WE WERE AWARE OF IT. A FORMER HEAD OF WELLS FARGO WITH A STRONG FINANCIAL BACKGROUND; THE FORMER HEAD OF THE CDC, CENTER OF DISEASE CONTROL; M.D. DOCTORS, THIS SORT OF THING; BUSINESS, LEGAL, MEDICAL EXPERTS.
MR. BOSTIC: AROUND THAT TIME PERIOD, DID YOU ALSO MAKE THE DECISION TO INVEST IN THERANOS PERSONALLY?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT WAS THE APPROXIMATE AMOUNT OF YOUR INVESTMENT?
JAMES MATTIS: I BELIEVE IT WAS $85,000. IT'S SOMEWHERE CLOSE TO THAT. I'M NOT POSITIVE.
MR. BOSTIC: AND WAS THAT A SIGNIFICANT INVESTMENT FOR YOU AT THE TIME?
JAMES MATTIS: FOR SOMEONE WHO HAD BEEN IN GOVERNMENT SERVICE FOR 40 YEARS, YES.
MR. BOSTIC: AND WHY DID YOU MAKE THAT DECISION TO INVEST IN THE COMPANY?
JAMES MATTIS: YOU KNOW, TO HAVE WHAT WE CALL SKIN IN THE GAME IN SOME PLACES, MAKE CERTAIN THAT YOU BELIEVED IN IT AND THAT YOU'RE WILLING TO CONTRIBUTE.
MR. BOSTIC: AT THIS TIME WHAT WERE YOUR SOURCES FOR INFORMATION ABOUT THE COMPANY AND ITS TECHNOLOGY?
JAMES MATTIS: MS. HOLMES.
MR. BOSTIC: WAS SHE THE PRIMARY SOURCE OF INFORMATION FOR YOU TO RELY ON AT THAT TIME?
JAMES MATTIS: THE SOLE SOURCE.
MR. BOSTIC: I'LL ASK YOU TO TURN TO EXHIBIT 5407 IN YOUR BINDER, AND ONCE YOU'RE THERE, LET ME KNOW IF YOU RECOGNIZE EXHIBIT 5407.
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS THAT DOCUMENT?
JAMES MATTIS: IT'S AN EMAIL CHAIN FROM MS. HOLMES AND MYSELF FROM SEPTEMBER OF 2013.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5407 INTO EVIDENCE.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5407 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MS. HOLLIMAN, LET'S ZOOM IN ON THE BOTTOM HALF OF THE PAGE. LET'S START -- YES, THAT'S GOOD.
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE AT THE BOTTOM OF THE SCREEN THERE AN EMAIL FROM MS. HOLMES TO YOU ON SEPTEMBER 7TH, 2013?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND THAT EMAIL READS: "GENERAL MATTIS: "FYI. THE BELOW WILL GO OUT TO OUR SHAREHOLDERS TONIGHT. WE HAVE BEGUN THE LAUNCH." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT DO YOU BELIEVE THE LAUNCH TO REFER TO?
JAMES MATTIS: I BELIEVE IT WAS THE LAUNCH OF THERANOS.
MR. BOSTIC: LET'S LOOK AT THE MESSAGE BELOW THIS. PERFECT. THANK YOU. IF WE CAN CAPTURE THE BOTTOM OF THIS PAGE AND THE TOP OF THE SECOND PAGE. WE CAN WORK WITH THIS. GENERAL MATTIS, COULD YOU SEE ON THE SCREEN PART OF THAT MESSAGE THAT WAS GOING TO BE SENT TO THERANOS SHAREHOLDERS?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU SEE THAT IT INCLUDES A LINK TO THE NEW THERANOS WEBSITE?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU SEE ALSO THAT IT INCLUDES A LINK TO A "WALL STREET JOURNAL" ARTICLE?
JAMES MATTIS: RIGHT. YES.
MR. BOSTIC: THE COMMERCIAL LAUNCH OF THE COMPANY AT THIS TIME, AS A BOARD MEMBER, AS AN INVESTOR, WAS THIS AN IMPORTANT STEP IN YOUR MIND?
JAMES MATTIS: YES.
MR. BOSTIC: AND HOW SO?
JAMES MATTIS: IT SHOWED THE MATURATION OF THE TECHNOLOGY THAT WAS GOING OUT TO BE USED, THE VERY THING I TRIED TO DO AT CENTCOM TO GET IT IN USE, OR AT LEAST A PILOT PROJECT TO START THAT PROCESS.
MR. BOSTIC: I'LL ASK YOU TO TURN TO EXHIBIT 1106 IN YOUR BINDER BACK AT THE BEGINNING. YOUR HONOR, THE GOVERNMENT IS MOVING TO MOVE IN 1106, AND I BELIEVE THIS IS SUBJECT TO STIPULATION.
JAMES MATTIS: UH-HUH.
MR. DOWNEY: IT IS, YOUR HONOR, YES.
JUDGE DAVILA: IT'S ADMITTED, AND IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 1106 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE IN FRONT OF YOU A "WALL STREET JOURNAL" FROM SEPTEMBER 8TH, 2013?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE TITLE IS ELIZABETH HOLMES: THE BREAKTHROUGH OF INSTANT DIAGNOSIS?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECALL READING THIS ARTICLE IN 2013?
JAMES MATTIS: I DO RECALL THAT.
MR. BOSTIC: AND I'D LIKE TO DRAW YOU TO A FEW CLAIMS IN THE ARTICLE. FIRST ON PAGE 1, IF WE CAN ZOOM IN, MS. HOLLIMAN, ON THE FIRST INDENTED PARAGRAPH. GENERAL MATTIS, THERE'S LANGUAGE HERE THAT SAYS, "THE SECRET THAT HUNDREDS OF EMPLOYEES ARE NOW REFINING INVOLVES DEVICES THAT AUTOMATE AND MINIATURIZE MORE THAN 1,000 LABORATORY TESTS." DO YOU SEE THAT?
JAMES MATTIS: I DO.
MR. BOSTIC: AND HOW DID THIS RELATE TO INFORMATION THAT YOU WERE GETTING FROM MS. HOLMES AT THE TIME?
JAMES MATTIS: WELL, I HAD MOVED FROM A VERY RUDIMENTARY UNDERSTANDING OF IT TO TALKING WITH HER AGAIN, AND THIS IS I BELIEVE BEFORE, ALTHOUGH IT'S BEEN A FEW YEARS, I BELIEVE IT'S BEFORE I HAD MY FIRST BOARD MEETING WITH MS. HOLMES AND HER TEAM. I THOUGHT IT WAS 2,000 LABORATORY TESTS, BUT I'M SURE I READ IT HERE AS 1,000. SO MAYBE I WAS MISTAKEN. I THOUGHT IT WAS 2,000.
MR. BOSTIC: WELL, 2,000 IS MORE THAN 1,000, AND THAT'S WHAT THE ARTICLE SAYS, SO --
JAMES MATTIS: IT COULD BE.
MR. BOSTIC: YEAH. DO YOU RECALL AROUND THIS TIME MS. HOLMES WAS PROVIDING YOU WITH INFORMATION ABOUT THE NUMBER OF TESTS THAT THERANOS TECHNOLOGY COULD DO?
JAMES MATTIS: I CAN'T RECALL THE EXACT TIME.
MR. BOSTIC: LET ME -- WELL, LET ME ASK, DO YOU RECALL AT SOME POINT MS. HOLMES GIVING YOU INFORMATION ABOUT THE NUMBER OF TESTS THAT THERANOS TECHNOLOGY COULD DO?
JAMES MATTIS: YES. AT MY FIRST BOARD MEETING, I BELIEVE IT WAS OCTOBER, ABOUT A MONTH AFTER THIS, TWO MONTHS AFTERWARDS, AND THEN I WAS IN FOR A FULL BOARD BRIEF, OF COURSE, AND NOW I WAS GETTING A LOT MORE DETAIL.
MR. BOSTIC: IN THAT SAME PARAGRAPH THAT IS ON THE SCREEN, THERE'S A LINE THAT SAYS, "THERANOS'S PROCESSES ARE FASTER, CHEAPER, AND MORE ACCURATE THAN THE CONVENTIONAL METHODS AND REQUIRE ONLY MICROSCOPIC BLOOD VOLUMES, NOT VIAL AFTER VIAL OF THE STUFF." DO YOU SEE THAT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND DO YOU RECALL MS. HOLMES PROVIDING YOU WITH ANY INFORMATION OR CLAIMS ABOUT THERANOS'S PROCESSES BEING FASTER THAN CONVENTIONAL METHODS?
JAMES MATTIS: YES.
MR. BOSTIC: AND IS THAT WHAT SHE SAID?
JAMES MATTIS: I BELIEVE I HAD ALREADY HEARD THAT YEARS BEFORE. I BELIEVE IT WAS FOUR OR FIVE HOURS START TO FINISH. SO, YEAH, FASTER FOR CERTAIN. THAT WAS ONE OF THE REASONS THAT I HAD BEEN SO INTERESTED IN IT WHEN YOU'RE DOING COMBAT CARE.
MR. BOSTIC: AND HOW ABOUT THAT CLAIM IN THE ARTICLE THAT THERANOS'S PROCESS IS WERE MORE ACCURATE THAN CONVENTIONAL METHODS? HAD MS. HOLMES SAID ANYTHING TO YOU ABOUT THE ACCURACY OF THE TESTS?
JAMES MATTIS: SHE EXPLAINED THAT BECAUSE YOU DIDN'T HAVE HUMAN BEINGS HANDLING THESE AND CENTRIFUGING THEM AND ALL, YOU DIDN'T HAVE AS MUCH POTENTIAL FOR THE ERROR THAT WAS, FRANKLY, QUITE STARTLING TO HEAR WHAT THE ERROR RATES WERE ON SOME BLOOD SAMPLES. SO, YES, I RECALL THAT TO ME WAS ONE OF THE SELLING POINTS FROM THE VERY BEGINNING ACTUALLY WHEN I HAD FIRST BEEN INTERESTED.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT SOME OF THE CONTENT ON PAGE 2 OF THE ARTICLE. IF WE CAN GO TO PAGE 2 OF THE EXHIBIT, MS. HOLLIMAN. ABOUT HALFWAY DOWN THE PAGE, THERE'S A PARAGRAPH THAT BEGINS, "THERANOS'S TECHNOLOGY ELIMINATES"?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: IS LET'S ZOOM IN ON THAT. AND, GENERAL MATTIS, DO YOU SEE LANGUAGE IN THE ARTICLE THAT SAYS, "THERANOS'S TECHNOLOGY ELIMINATES MULTIPLE LAB TRIPS BECAUSE IT CAN RUN ANY COMBINATION OF TESTS, INCLUDING SETS OF FOLLOW-ON TESTS, AT ONCE, VERY QUICKLY, ALL FROM A SINGLE MICROSAMPLE"? DO YOU SEE THAT LANGUAGE?
JAMES MATTIS: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH WHAT MS. HOLMES WAS TELLING YOU ABOUT THE TECHNOLOGY?
JAMES MATTIS: YES, IT'S CONSISTENT.
MR. BOSTIC: LET'S GO TO THE BOTTOM OF THIS PAGE, THE VERY LAST LINE. AND IF WE CAN LOOK AT THE BOTTOM OF THIS PAGE AND THE TOP OF THE NEXT. WE CAN JUST START HERE. GENERAL MATTIS, DO YOU SEE A SENTENCE THAT BEGINS "THERANOS'S TECHNOLOGY IS AUTOMATED, STANDARDIZED, AND ATTEMPTS TO SUBTRACT HUMAN" -- IF WE CAN GO TO THE NEXT PAGE --
JAMES MATTIS: YES.
MR. BOSTIC: AND ZOOM IN ON THE TOP. -- "ATTEMPTS TO SUBTRACT HUMAN ERROR FROM THE PROCESS. IT CAN THUS ACHIEVE MUCH LOWER VARIANCE RANGES FROM A GIVEN TEST. MS. HOLMES SAYS ITS TESTS HAVE MARGINS OF ALLOWABLE ERROR TARGETS LESS THAN 10 PERCENT."
JAMES MATTIS: UH-HUH.
MR. BOSTIC: WAS THAT CONSISTENT WITH WHAT MS. HOLMES WAS TELLING YOU WHEN SHE WAS DESCRIBING THE TECHNOLOGY?
JAMES MATTIS: YES.
MR. BOSTIC: YOU MENTIONED A BOARD MEETING A LITTLE WHILE AGO. I'LL ASK YOU TO TURN TO EXHIBIT 1172 IN YOUR BINDER, PLEASE. YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT 1172, AND I BELIEVE IT'S ALSO SUBJECT TO STIPULATION.
MR. DOWNEY: IT IS, YOUR HONOR. I THINK WE'LL -- I THINK THERE'S A THICKER VERSION OF THIS EXHIBIT AS WELL, BUT WE CERTAINLY DON'T OBJECT TO THE ADMISSION OF 1172.
MR. BOSTIC: SO IF THE GOVERNMENT CAN MARK THIS AS 1172A, IT'S AN EXCERPT, THE FIRST 89 PAGES OF WHAT IS 1172 ON THE EXHIBIT LIST.
JUDGE DAVILA: WE'LL MARK IT A AND IT'S ADMITTED, AND IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 1172A WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: GENERAL MATTIS, DO YOU RECOGNIZE THE DOCUMENT MARKED AS EXHIBIT 1172?
JAMES MATTIS: I'M FAMILIAR WITH IT, YES.
MR. BOSTIC: AND WHAT IS IT?
JAMES MATTIS: IT'S THE SLIDE SHOW FOR A BOARD OF DIRECTORS MEETING.
MR. BOSTIC: AND WHAT WAS THE DATE OF THAT MEETING?
JAMES MATTIS: OCTOBER 8TH.
MR. BOSTIC: AND WERE YOU PRESENT FOR THE BOARD OF DIRECTORS MEETING ON OCTOBER 8TH, 2013?
JAMES MATTIS: I'M ALMOST CERTAIN I WAS.
MR. BOSTIC: AND YOU WOULD HAVE SEEN THIS PRESENTATION AT THE TIME?
JAMES MATTIS: I KNOW I'VE SEEN IT. I DON'T KNOW IF IT WAS FORWARDED TO ME AFTERWARDS IF I MISSED THE BOARD MEETING. I BELIEVE I WAS THERE.
MR. BOSTIC: WHO PRESENTED INFORMATION LIKE THIS TO THE THERANOS BOARD OF DIRECTORS?
JAMES MATTIS: MS. HOLMES.
MR. BOSTIC: WAS SHE THE PRIMARY PRESENTER AT BOARD OF DIRECTORS MEETINGS IN YOUR EXPERIENCE?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHO ELSE PRESENTED AT THOSE MEETINGS, IF ANYONE?
JAMES MATTIS: MR. BALWANI WOULD SOMETIMES GIVE -- NOT AT THIS ONE, AT LATER ONES I RECALL HIM GIVING FINANCIAL FORECASTS. MS. HOLMES WOULD KIND OF INTRODUCE THE STRATEGIC VIEW OF WHERE WE WERE GOING, AND THEN WE WOULD GET FINANCIAL FORECASTS FROM MR. BALWANI. I MEAN, THEY WERE BOTH TALKING BACK AND FORTH. IT WAS A TEAM PRESENTATION.
MR. BOSTIC: AND WHAT WAS THE PROPORTION BETWEEN THE TWO OF THEM AS FAR AS HOW MUCH THEY PRESENTED TO THE BOARD? WAS IT EQUAL? HALF AND HALF?
JAMES MATTIS: MS. HOLMES WAS IN CHARGE PROBABLY I WOULD SAY -- I THINK FOR THIS MEETING AND MANY OF THE INITIAL MEETINGS I WENT TO PROBABLY 100 PERCENT. IF HE WAS THERE, HE WOULD TALK ABOUT THE FINANCIALS. SO IT WAS PROBABLY 90 PERCENT MS. HOLMES, CEO.
MR. BOSTIC: AND DO YOU RECALL BOARD MEETINGS WHERE MR. BALWANI MIGHT NOT HAVE EVEN BEEN PRESENT?
JAMES MATTIS: YES.
MR. BOSTIC: LET'S LOOK AT PAGE 7 OF EXHIBIT 1172. IS THIS IMAGE FAMILIAR TO YOU?
JAMES MATTIS: YES, IT IS.
MR. BOSTIC: AND WHAT IS DEPICTED IN THE IMAGE ON PAGE 7?
JAMES MATTIS: WELL, IT'S THE COMPARISON. THERE YOU SEE THE PHYSICAL COMPARISON ABOUT THE AMOUNTS OF BLOOD USED, THERANOS ON THE RIGHT AND THEN THE SMALL CONTAINER. AND I ASSUME THE TRADITIONAL AMOUNT OF BLOOD TAKEN FOR A SIMILAR SERIES OF TESTS.
MR. BOSTIC: LET'S LOOK AT PAGE 9 OF THIS EXHIBIT. GENERAL MATTIS, ON PAGE 9 DO YOU SEE THAT THIS BOARD PRESENTATION ALSO INCLUDED A CLIP OR AN IMAGE OF THE "WALL STREET JOURNAL" ARTICLE THAT WE WERE JUST TALKING ABOUT?
JAMES MATTIS: RIGHT, YES.
MR. BOSTIC: LET'S LOOK NEXT AT PAGE 19. AND, GENERAL MATTIS, YOU'RE WELCOME TO FOLLOW ALONG JUST ON THE SCREEN OR IN YOUR BINDER, WHATEVER IS EASIEST.
JAMES MATTIS: UH-HUH.
MR. BOSTIC: LOOKING AT PAGE 19, DO YOU SEE A SERIES OF IMAGES ON THAT PAGE?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND WHAT WAS YOUR UNDERSTANDING OF WHAT THOSE IMAGES DEPICTED?
JAMES MATTIS: WELL, HAVING MS. HOLMES HAVING PRICKED MY FINGER AND TAKEN THE ONE DROP OF BLOOD FOR THE SMALL CONTAINER ON THE RIGHT, THE IMAGES ARE OF THE AMOUNT OF BLOOD NECESSARY FOR THERANOS TO DO ITS JOB.
MR. BOSTIC: AND SO THIS IS DEPICTING THE FINGERSTICK DRAW PROCESS AND THE SIZE OF THE SAMPLE?
JAMES MATTIS: YES, SIR.
MR. BOSTIC: AND THERE'S LANGUAGE ON THIS SLIDE PRESENTED TO THE BOARD THAT SAYS, "THERANOS RUNS ANY TEST AVAILABLE IN CENTRAL LABORATORIES AND PROCESSES ALL SAMPLE TYPES." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: THERE'S ALSO LANGUAGE AT THE BOTTOM OF THE PAGE THAT SAYS "THERANOS PROVIDES THE HIGHEST LEVEL OF OVERSIGHT, AUTOMATION, STANDARDIZATION, AND IN OUR PRE- AND POST-ANALYTIC PROCESSES, ENSURING THE HIGHEST LEVELS OF ACCURACY AND PRECISION." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WAS -- LET ME ASK A BETTER QUESTION. DO YOU RECALL MS. HOLMES TELLING THE BOARD ABOUT THERANOS'S HIGH LEVEL OF ACCURACY AND PRECISION?
JAMES MATTIS: YES, THAT WAS ONE OF THE SELLING POINTS. I MEAN, THAT WAS ONE OF THE COMPELLING ASPECTS OF IT.
MR. BOSTIC: LET'S TURN TO PAGE 20 AND ZOOM IN ON THE IMAGE ON THE RIGHT WHERE IT SAYS GERIATRICS.
JAMES MATTIS: YEAH.
MR. BOSTIC: AND INCLUDE THE IMAGE BELOW THAT, PLEASE. GENERAL MATTIS, DO YOU SEE HERE LANGUAGE IN THIS PRESENTATION TO THE BOARD THAT SAYS, "WITH THERANOS, YOU CAN PROCESS SAMPLES FROM PATIENTS WITH COLLAPSED VEINS WITHOUT THE DISCOMFORT THEY GO THROUGH NOW. NO MORE SEARCHING FOR VEINS. NO MORE PAINFUL DRAWS FROM THE KNUCKLE OR THE BACK OF THE HAND." DO YOU SEE THAT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND WHAT WAS THIS REFERRING TO IF YOU HAD AN UNDERSTANDING AT THE TIME?
JAMES MATTIS: I'M SORRY?
MR. BOSTIC: WHAT WAS THIS REFERRING TO IF YOU HAD AN UNDERSTANDING AT THE TIME?
JAMES MATTIS: BASICALLY WHAT HAD BEEN DEMONSTRATED TO ME, YOU TAKE JUST ONE DROP OF BLOOD FROM THE END OF YOUR FINGER, AND YOU DON'T HAVE TO GO THROUGH THE REST OF THE BLOOD DRAWS OUT OF YOUR VEIN AND YOUR ARM AND YOUR HAND.
MR. BOSTIC: AT THIS TIME DID YOU HAVE AN UNDERSTANDING AS TO WHETHER THERANOS WAS USING FINGERSTICK VERSUS VEIN DRAWS FOR THE PATIENT SAMPLES THAT IT WAS RUNNING?
JAMES MATTIS: THE WHOLE IDEA I THOUGHT WITH THERANOS WAS TO USE THE FINGERSTICK. I BECAME AWARE LATER, BUT NOT AT THIS TIME, THAT WE WERE DOING VENOUS DRAWS.
MR. BOSTIC: LET'S TURN TO PAGE 21 IN THE SAME PRESENTATION. DO YOU SEE A SLIDE IN FRONT OF YOU TITLED FASTER RESULTS. FASTER ANSWERS?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE TEXT ON THIS SLIDE SAYS, "THERANOS'S MICRO SAMPLE ANALYSIS IS PERFORMED AT AMAZING SPEED SO WE CAN REPORT RESULTS FASTER THAN PREVIOUSLY POSSIBLE." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECALL MS. HOLMES TELLING THE BOARD ABOUT THE SPEED AT WHICH THERANOS TESTS COULD BE RUN?
JAMES MATTIS: YES. IT WAS A GIVEN. SHE TALKED ABOUT IT AS ONE OF THE CHARACTERISTICS OF THE THERANOS.
MR. BOSTIC: LET'S LOOK AT PAGE 23, PLEASE, THE SAME SLIDE PRESENTATION. THIS SLIDE IS TITLED A NEW STANDARD IN QUALITY; CORRECT?
JAMES MATTIS: UH-HUH, YES.
MR. BOSTIC: AND BELOW THAT THERE'S LANGUAGE STATING THE HIGHEST LEVELS OF ACCURACY AND THE LANGUAGE BELOW THAT SAYS, "BY SYSTEMATICALLY CONTROLLING AND STANDARDIZING OUR PROCESSES, THERANOS OFFERS TESTS WITH THE HIGHEST LEVELS OF ACCURACY." DID I READ THAT CORRECTLY?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND WAS THIS CONSISTENT WITH WHAT MS. HOLMES WAS TELLING THE BOARD ABOUT THE ACCURACY OF THERANOS TESTS?
JAMES MATTIS: YES.
MR. BOSTIC: AND THERE'S ALSO A GRAPHIC OR AN IMAGE IN THE MIDDLE OF THE PAGE INDICATING A COEFFICIENT VARIATION OF LESS THAN 10 PERCENT FOR ONE OF THE ASSAYS; CORRECT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: LET'S MOVE TO PAGE 56 OF THIS EXHIBIT. IS THIS ANOTHER SLIDE THAT WAS PRESENTED TO THE BOARD ON THE DATE OF THAT BOARD MEETING THAT WE'VE BEEN DISCUSSING?
JAMES MATTIS: YES.
MR. BOSTIC: ON THE LEFT SIDE THERE'S A TITLE WITH SOME BULLET POINTS. THE TITLE SAYS ROUTINE, SPECIALTY AND ESOTERIC TEST. AND THE FIRST BULLET SAYS, "ALL 2,000 PLUS CURRENTLY RUN TESTS/CPT CODES ARE AVAILABLE THROUGH THERANOS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE NEXT BULLET POINT THERANOS RUNS ANY TEST AVAILABLE IN CENTRAL LABORATORIES." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU REMEMBER WHAT MS. HOLMES GENERALLY WAS TELLING THE BOARD AT THIS TIME ABOUT THE RANGE OF TESTS THAT THERANOS WAS OFFERING OR THAT THE TECHNOLOGY COULD DO?
JAMES MATTIS: NO.
MR. BOSTIC: DO YOU RECALL HEARING FROM MS. HOLMES THAT THE THERANOS TECHNOLOGY COULD RUN ANY TEST AVAILABLE IN CENTRAL LABS?
JAMES MATTIS: WHAT YOU SEE ON THE SLIDE ABOUT 2,000 TESTS AND RUN ANY TEST AVAILABLE ON A CENTRAL LAB. I KNOW THAT THIS IS WHERE I'M STARTING TO LEARN MORE ABOUT HOW THIS MACHINE ACTUALLY WORKS, AND THIS IS MY FIRST BOARD MEETING, AND I RECALL THIS VERY CLEARLY.
MR. BOSTIC: ON THE RIGHT-HAND SIDE OF THE PAGE THERE'S A TABLE ENTITLED HIGHER QUALITY DATA WITH SOME OTHER BULLET POINTS. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE FIRST BULLET POINT REFERENCES "VARIABILITY AMONG TRADITIONAL LABS," AND THE BULLET POINT A COUPLE DOWN FROM THERE TALKS ABOUT "AN UNPRECEDENTED LACK OF VARIATION WITH THERANOS YIELDS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECALL MS. HOLMES SAYING ANYTHING ABOUT THERANOS'S ACCURACY VERSUS THE ACCURACY OF CONVENTIONAL LABS?
JAMES MATTIS: YES.
MR. BOSTIC: WHAT DID SHE SAY?
JAMES MATTIS: THAT IT WAS MUCH MORE ACCURATE AND GAVE THE REASONS FOR IT, THAT YOU DIDN'T HAVE AS MANY HUMAN HANDS HANDLING IT AND SO THE POTENTIAL FOR HUMAN ERROR WAS MUCH REDUCED.
MR. BOSTIC: LET'S LOOK AT PAGE 76. WE'RE STILL IN THE SAME PRESENTATION; IS THAT CORRECT?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: DO YOU RECALL HOW LONG THIS PRESENTATION TOOK TO GIVE TO THE BOARD ON THAT DATE?
JAMES MATTIS: HOW LONG THE PRESENTATION TOOK?
MR. BOSTIC: UH-HUH.
JAMES MATTIS: I THINK IT WAS -- IT GUIDED OUR DISCUSSION THAT DAY. YOU'RE GOING FASTER THROUGH IT THAN WE DID. WE STOPPED AND TALKED ON EACH PAGE, AND -- BUT I WOULD SAY AT LEAST AN HOUR OR TWO. IT WAS NOT A QUICK ONE SLIDE AFTER ANOTHER, MR. BOSTIC. WE STOPPED AND HAD A DISCUSSION ABOUT IT.
MR. BOSTIC: UNDERSTOOD. LOOKING AT PAGE 76, DO YOU SEE A SLIDE TITLED VALIDATION OF THERANOS?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE FIRST PARAGRAPH THERE SAYS, "THERANOS HAS BEEN COMPREHENSIVELY VALIDATED OVER THE COURSE OF THE LAST SEVEN YEARS BY TEN OF THE FIFTEEN LARGEST PHARMACEUTICAL COMPANIES." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECALL A DISCUSSION ABOUT PHARMACEUTICAL COMPANIES VALIDATING THERANOS?
JAMES MATTIS: I DON'T RECALL THE PHARMACEUTICAL COMPANIES. I'M SURE IT WAS ADDRESSED, JUST LIKE IT IS ON THE SLIDE, I JUST DON'T RECALL THAT PART OF IT. THERE ARE OTHER PARTS OF THE SLIDE THAT I RECALL VERY WELL, THOUGH.
MR. BOSTIC: AND WHAT STOOD OUT IN YOUR MIND ABOUT THE SLIDE?
JAMES MATTIS: ON THIS SLIDE IT WAS THERANOS INFRASTRUCTURE ELIMINATES THE NEED FOR THE LAB, AND IT CAUGHT MY ATTENTION FOR MILITARY USE. BUT AS I WAS LEARNING ABOUT THIS, I HAD BEEN OBVIOUSLY READING ON THE INTERNET ABOUT THERANOS AFTER I AGREED IN AUGUST TO JOIN THE BOARD, BUT NOW I'M SEEING THERE'S A VALIDATION OF ITS LAB INFRASTRUCTURE BY FDA, BY THE WORLD HEALTH ORGANIZATION, AND THEN, OF COURSE, THE NOVEL BUT SOUND IT CAN ACCURATELY WORK FROM JOHNS HOPKINS. SO SEEING THIRD PARTY VALIDATION LIKE THIS OF WHAT I THOUGHT WAS THE THERANOS -- OR WHAT ELIZABETH HAD BEEN TALKING ABOUT, SO IT WASN'T JUST ELIZABETH TALKING ABOUT IT, IT WAS THIRD PARTIES, RESPECTED THIRD PARTIES.
MR. BOSTIC: AND DID THAT INCREASE YOUR CONFIDENCE IN THE THERANOS TECHNOLOGY?
JAMES MATTIS: IT DID VERY MUCH.
MR. BOSTIC: LET'S LOOK AT SLIDE 78, PAGE 78 OF EXHIBIT 1172. DO YOU SEE A TITLE HERE OVERVIEW: THERANOS SYSTEMS?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS YOUR UNDERSTANDING OF WHAT WAS DEPICTED IN THIS SLIDE AND IN PARTICULAR IN THE UPPER LEFT CORNER?
JAMES MATTIS: THESE ARE THE PHYSICAL PARTS OF THE SYSTEM, AND IT SHOWS HOW THERANOS WORKS.
MR. BOSTIC: AND IN THE UPPER LEFT DO YOU SEE TWO BOXES OR TWO DEVICES; IS THAT CORRECT?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND WHAT WERE THOSE AS YOU UNDERSTOOD IT?
JAMES MATTIS: THE ANALYZERS.
MR. BOSTIC: THE ANALYZERS MANUFACTURED BY THERANOS?
JAMES MATTIS: PARDON?
MR. BOSTIC: THE ANALYZERS MANUFACTURED BY THERANOS?
JAMES MATTIS: OH, YEAH. ABSOLUTELY, YES.
MR. BOSTIC: FINALLY, LET'S LOOK AT EXHIBIT -- OR SORRY, EXHIBIT 1172, PAGE 81 OF THIS SAME PRESENTATION. THIS IS IN THE SAME BOARD PRESENTATION. THERE'S A SLIDE ENTITLED EXCERPTS FROM THERANOS'S TEST MENU; CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WE TALKED EARLIER ABOUT THE RANGE OF TESTS THAT THERANOS COULD OFFER. LOOKING AT THESE SLIDES WITH THE TEST MENU EXCERPTS, WHAT WAS YOUR UNDERSTANDING ABOUT WHICH OF THESE WERE BEING CONDUCTED ON THERANOS-MANUFACTURED ANALYZERS?
JAMES MATTIS: EARLY ON AT THIS POINT I WAS REGRETTING AGAIN. WE HADN'T BEEN ABLE TO DO THE TEST IN THEATRE IN CENTCOM BECAUSE I THOUGHT THEY COULD DO THEM ALL ON THE THERANOS ANALYZERS.
MR. BOSTIC: AND WAS THERE ANY DISCUSSION OR DISCLOSURE TO THE BOARD AROUND THIS TIME ABOUT THE USE OF THIRD PARTY ANALYZERS TO RUN A SIGNIFICANT PORTION OF THE TESTS ON THIS MENU?
JAMES MATTIS: I DON'T RECALL THAT. OUR POINT WAS THAT WE WERE BETTER THAN THEM. WE WERE FASTER, WE WERE CHEAPER, WE WERE MORE ACCURATE THAN OTHERS. SO I DON'T RECALL THAT EVER COMING UP.
MR. BOSTIC: WOULD THAT HAVE STOOD OUT IN YOUR MIND, FOR EXAMPLE, IF A MAJORITY OF THE TESTS RUN WERE RUN ON THIRD PARTY DEVICES?
JAMES MATTIS: AT THIS POINT IT WOULD HAVE LEAPED OUT AT ME BECAUSE MY WHOLE EFFORT AT CENTCOM HAD BEEN TO TRY TO GET IT INTO THEATRE BECAUSE IT WAS DIFFERENT AND IT COULD DO THIS OFF OF THIS ONE SMALL MACHINE. BUT I DID NOT KNOW IT WAS 2,000 WHEN I WAS AT CENTCOM. I MEAN, THAT KNOWLEDGE CAME IN LATER.
MR. BOSTIC: AROUND THIS TIME, SO WE'RE STILL IN LATE 2013, WERE YOU EVER AWARE OR WERE YOU EVER TOLD THAT THE THERANOS ANALYZER COULD RUN NO MORE THAN 12 TESTS?
JAMES MATTIS: THAT -- I BECAME AWARE OF THAT. I CAN'T TELL YOU WHEN. YEARS HAVE GONE BY, BUT IT WAS SIGNIFICANTLY LATER THAN THIS.
MR. BOSTIC: YOU DID NOT KNOW THAT FACT AT THIS TIME IN 2013?
JAMES MATTIS: NO.
MR. BOSTIC: WERE YOU EVER TOLD AROUND THIS TIME IN 2013 THAT THE THERANOS ANALYZER COULD ONLY PERFORM A TYPE OF TEST CALLED AN IMMUNOASSAY?
JAMES MATTIS: I THINK I -- I KNEW IT COULD PERFORM IMMUNOASSAY. I WAS NOT AWARE THAT THAT WAS THE ONLY TEST.
MR. BOSTIC: IF YOU HAD KNOWN THOSE FACTS AT THE TIME, WOULD THOSE FACTS HAVE BEEN IMPORTANT TO YOU?
JAMES MATTIS: ABSOLUTELY.
MR. BOSTIC: AND WOULD THEY HAVE BEEN IMPORTANT WHEN IT CAME TO YOUR INTEREST IN THE DEVICE FOR MILITARY USE?
JAMES MATTIS: NO. IT WOULD HAVE TEMPERED MY ENTHUSIASM SIGNIFICANTLY, THAT'S MY ENTHUSIASM FOR A PILOT PROJECT. AGAIN, IT HAD TO GO IN AND DELIVER. I WASN'T TAKING THAT, YOU KNOW -- I WAS OPERATING IN GOOD FAITH THAT IT COULD DELIVER A LOT OF CAPABILITY, BUT I WANTED TO SEE IT IN ACTION.
MR. BOSTIC: UNDERSTOOD. WE CAN TAKE DOWN THIS EXHIBIT. THANK YOU, MS. HOLLIMAN. BESIDES THE BOARD OF DIRECTORS MEETING THAT WE'VE BEEN TALKING ABOUT, DID YOU CONTINUE TO ATTEND OTHER BOARD OF DIRECTOR MEETINGS AT THERANOS?
JAMES MATTIS: I DID.
MR. BOSTIC: AND DO YOU RECALL HOW FREQUENTLY THEY OCCURRED?
JAMES MATTIS: NO, I DO NOT. I THINK I MIGHT HAVE MISSED ONE WHEN I WAS OVERSEAS, BUT I THINK I MADE IT TO ALL OF THEM.
MR. BOSTIC: AND BESIDES ATTENDING BOARD OF DIRECTORS MEETINGS, DID YOU HAVE OTHER CONTACT WITH MS. HOLMES DURING YOUR TIME PERIOD AS A BOARD MEMBER?
JAMES MATTIS: I DID. IN ACCORDANCE WITH OUR FIRST DISCUSSION WHEN SHE ASKED ME TO JOIN THE BOARD WHEN I WAS AT STANFORD, WE WOULD SET UP TIMES WHEN SHE AND I COULD MEET, AND I WOULD GO OVER AND TALK, AND IT WAS BASICALLY ABOUT PERSONNEL PROCESSES, TEAM BUILDING. IT USUALLY STARTED WITH ME ASKING HER WHAT WERE THE BIG ISSUES SHE WAS DEALING WITH AND HOW COULD I HELP.
MR. BOSTIC: HOW FREQUENTLY WOULD YOU HAVE THOSE -- WERE THOSE ONE-ON-ONE CONVERSATIONS WITH MS. HOLMES?
JAMES MATTIS: I WOULD SAY FOR EVERY BOARD MEETING THERE WAS AT LEAST ONE OF THOSE OTHER EVENTS WHERE WE GOT TOGETHER ONE ON ONE. IT WOULD ONLY BE THE TWO OF US IN THE ROOM. THERE MIGHT HAVE BEEN SOMETIMES MAYBE TWICE IN BETWEEN BOARD MEETINGS.
MR. BOSTIC: AND YOU JUST TOLD US ABOUT SOME OF THE TOPICS THAT WERE DISCUSSED. DID YOU EVER DISCUSS DURING THOSE ONE-ON-ONE MEETINGS HOW TO MANAGE INFORMATION FLOW IN THE COMPANY?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT DO YOU RECALL ADVISING HER ON THAT TOPIC?
JAMES MATTIS: JUST THAT PROBABLY SOMEWHERE IN HER COMPANY WAS EVERY BIT OF INFORMATION SHE NEEDED TO GUIDE IT, LEAD IT, MAKE DECISIONS. AND HOW DO YOU OPEN UP THE INFORMATION FLOW? HOW DO YOU DISPLAY THE DATA SO EVERYBODY IS ON ONE SHEET OF MUSIC AND YOU'RE NOT CAUGHT FLAT FOOTED, THAT SORT OF THING. THE USE OF TOWN HALLS. YOU KNOW, THE NORMAL THINGS THAT PEOPLE DO WHO HAVE RESPONSIBILITY FOR LEADING ANY ORGANIZATION.
MR. BOSTIC: AND DID THAT ADVICE INCLUDE OR ENCOMPASS HOW TO DEAL WITH NEGATIVE INFORMATION OR UNFAVORABLE INFORMATION?
JAMES MATTIS: I DON'T RECALL IT IN PARTICULAR, BUT IT PROBABLY DID. I'M NOT SURE.
MR. BOSTIC: THINKING ABOUT YOUR FIRST YEAR ON THE THERANOS BOARD OF DIRECTORS, SO THE FIRST HALF OF 2013 TO THE SECOND HALF OF 2014, WAS ANY ADDITIONAL PROGRESS MADE ON THE MILITARY FRONT? DID THE TESTING EVER OCCUR TO YOUR KNOWLEDGE?
JAMES MATTIS: I'M NOT AWARE OF ANY PROGRESS ON THE MILITARY FRONT.
MR. BOSTIC: DO YOU RECALL DURING THAT TIME PERIOD ANY CONVERSATIONS THAT YOU HAD WITH MS. HOLMES ABOUT THE STATUS OF THINGS AND WHY THINGS WEREN'T MOVING FORWARD?
JAMES MATTIS: SAY AGAIN, PLEASE.
MR. BOSTIC: SURE. DURING THAT TIME PERIOD WHEN YOU WERE ON THE BOARD, DID YOU EVER DISCUSS WITH MS. HOLMES THE MILITARY PILOT PROJECT AND WHY IT WASN'T MOVING FORWARD?
JAMES MATTIS: NO. I TALKED TO MS. HOLMES WHEN I CAME ON AND EXPLAINED THAT I WOULD NOT DO THAT WHILE I HAD WHAT IS CALLED A SAFE HARBOR LETTER, THAT I WOULD NOT VIOLATE ETHICAL RULES BY ENGAGING WITH THERANOS MEMBERS OF THE BOARD, AND IT WAS MY PERSONAL PREFERENCE NOT EVEN TO GET CLOSE TO THAT AND POSSIBLY GIVE THE APPEARANCE OF USING MY FORMER POSITION. AND SHE RESPECTED THAT AND NEVER ASKED ME ABOUT MILITARY THINGS.
MR. BOSTIC: THAT ETHICAL RULE OR THE ETHICAL APPROACH YOU TOOK, WOULD THAT HAVE PREVENTED YOU FROM HEARING INFORMATION OR JUST FROM HAVING AN ACTIVE ROLE IN THE MILITARY INVOLVEMENT?
JAMES MATTIS: YEAH IT WOULD PREVENT ME FROM DEALING WITH ANYONE IN THERANOS, MS. HOLMES OR ANY OF HER TEAM ON IT, BUT IT WOULD NOT PREVENT ME FROM HEARING FROM MY OLD BUDDIES IN THEATRE OR PEOPLE LIKE THAT IF IT WAS OUT THERE AND WORKING.
MR. BOSTIC: AND WOULD IT HAVE PREVENTED MS. HOLMES FROM TELLING YOU OUR DEVICE IS NOW BEING USED BY THE MILITARY?
JAMES MATTIS: YOU WOULD HAVE TO ASK HER BECAUSE I HAD EXPLAINED TO HER THAT I DID NOT WANT TO BE INVOLVED IN THE MILITARY ASPECT AT ALL, AND SO THAT MAY HAVE HAD A COOLING EFFECT ON HER WILLINGNESS TO COMMUNICATE IT. BUT I CAN'T ANSWER THAT.
MR. BOSTIC: LET ME ASK, WERE THERE EVER ANY OCCASIONS DURING BOARD MEETINGS WHERE, FOR EXAMPLE, YOU WERE ASKED TO LEAVE SO THAT THE MILITARY PROJECT COULD BE DISCUSSED WITH THE REST OF THE BOARD?
JAMES MATTIS: NO. I DO RECALL ON ONE OCCASION THE BAGRAM, I THINK, PROJECT OR SOMETHING COMING UP, BAGRAM BEING THE AIRFIELD, OUR PRIMARY MEDEVAC, MEDICAL EVACUATION AIRFIELD FROM THE AFGHAN THEATRE FOR CAUSALITIES, BUT I DIDN'T KNOW ANYTHING ABOUT IT, AND I DIDN'T ASK ANY QUESTIONS ABOUT IT. AND IT WASN'T AN EXTENDED. IT WAS MORE NOTED IN PASSING. SO I DIDN'T HAVE TO GET UP AND LEAVE THE ROOM IN ORDER TO AVOID IT. THERE WAS NO SUBSTANCE TO THAT DISCUSSION THAT I RECALL.
MR. BOSTIC: YOU WERE NO LONGER IN ACTIVE MILITARY SERVICE AT THAT TIME; IS THAT CORRECT?
JAMES MATTIS: ON THE BOARD, YES.
MR. BOSTIC: HAD YOU PREVIOUSLY HELD A SECURITY CLEARANCE WITH THE U.S. GOVERNMENT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT LEVEL SECURITY CLEARANCE DID YOU HAVE?
JAMES MATTIS: TOP SECRET SCI.
MR. BOSTIC: IS THAT THE TOP LEVEL CLEARANCE?
JAMES MATTIS: YES, THAT IS A TOP LEVEL CLEARANCE.
MR. BOSTIC: AND DID YOU STILL HAVE THAT CLEARANCE LEVEL WHEN YOU WERE SERVING ON THE THERANOS BOARD?
JAMES MATTIS: I DID.
MR. BOSTIC: DOES THAT MEAN THERE WOULDN'T HAVE BEEN ANY REASONS RELATED TO CLASSIFIED INFORMATION THAT YOU COULDN'T HAVE KNOWN ABOUT MILITARY USE OF THE THERANOS DEVICE?
JAMES MATTIS: NO.
MR. BOSTIC: IN OTHER WORDS, LET ME ASK, WOULD THERE HAVE BEEN ANY REASONS THAT YOU COULDN'T HAVE KNOWN OF CLASSIFIED USE OF A THERANOS DEVICE?
JAMES MATTIS: NO. THERE IS NO CLASSIFICATION REASON. THERE IS THE OTHER HALF OF IT, AND THAT'S THE NEED TO KNOW. I PROBABLY WOULDN'T HAVE HAD A NEED TO KNOW.
MR. BOSTIC: WHEN YOU WERE SERVING ON THE THERANOS BOARD, DID YOU EVER HAVE OCCASION TO SPEAK TO JOURNALISTS ABOUT THE COMPANY?
JAMES MATTIS: YES.
MR. BOSTIC: DO YOU RECALL AN OCCASION WHEN YOU SPOKE TO A JOURNALIST FROM "FORTUNE" MAGAZINE NAMED ROGER PARLOFF?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU REMEMBER APPROXIMATELY WHEN THAT WAS?
JAMES MATTIS: I BELIEVE IT WAS JUNE, JULY, AUGUST, I BELIEVE IT WOULD HAVE BEEN 2014.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT EXHIBIT 1776. YOUR HONOR, THE GOVERNMENT OFFERS THIS INTO EVIDENCE. IT'S SUBJECT TO STIPULATION BETWEEN THE PARTIES.
MR. DOWNEY: NO OBJECTION, YOUR HONOR. IT MAY BE ADMITTED.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 1776 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE IN FRONT OF YOU AN ARTICLE ENTITLED AT THE TOP "THIS CEO'S OUT FOR BLOOD" FROM "FORTUNE" MAGAZINE?
JAMES MATTIS: YES.
MR. BOSTIC: AND IS THIS THAT ARTICLE BY THAT JOURNALIST ROGER PARLOFF THAT WE'VE BEEN DISCUSSING?
JAMES MATTIS: I ASSUME IT'S THE ARTICLE THAT I PROBABLY CONTRIBUTED TO, YES.
MR. BOSTIC: AND DID YOU SPEAK TO MR. PARLOFF IN CONNECTION WITH THIS ARTICLE?
JAMES MATTIS: YES, HE CALLED ME.
MR. BOSTIC: AND DID MS. HOLMES KNOW THAT YOU WERE SPEAKING TO MR. PARLOFF IN CONNECTION WITH THIS ARTICLE?
JAMES MATTIS: YES. I BELIEVE I KNEW HE WAS GOING TO CALL, AND SO I WENT TO MS. HOLMES TO ASK HER FOR GUIDANCE ON WHAT I COULD SPEAK ABOUT. I DID NOT WANT TO REVEAL INTELLECTUAL PROPERTY OR TRADE SECRETS, AND SO I WANTED A LITTLE GUIDANCE. I DIDN'T WANT TO LEARN ABOUT WHAT I WOULD SPEAK ABOUT IN THE BOARD MEETING. THERE'S A DUTY OF CONFIDENTIALITY AS A MEMBER OF THE BOARD.
MR. BOSTIC: AND DID MS. HOLMES PROVIDE YOU WITH THAT GUIDANCE ON --
JAMES MATTIS: SHE DID.
MR. BOSTIC: -- ON WHAT YOU COULD SAY AND WHAT YOU COULDN'T SAY?
JAMES MATTIS: RIGHT.
MR. BOSTIC: I'D LIKE TO LOOK AT A COUPLE OF PORTIONS OF THIS ARTICLE. FIRST, I'LL DRAW YOUR ATTENTION TO THE TOP LINE BELOW THE BY LINE THERE'S A SECTION THAT SAYS AUTHOR'S NOTE IN BRACKETS. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THAT READS, "ON DECEMBER 17TH, 2015, I PUBLISHED A PROTRACTED CORRECTION TO THIS ARTICLE." DO YOU SEE THAT?
JAMES MATTIS: I DON'T THINK I -- I'M SEEING IT NOW. I'M NOT SURE I SAW THAT ON THE VERSION I READ. I DID READ THE ARTICLE, BUT IT DID NOT HAVE THAT.
MR. BOSTIC: AND THAT'S MY POINT. DO YOU THINK YOU WOULD HAVE READ THIS ARTICLE AT THE TIME IT CAME OUT IN JUNE OF 2014?
JAMES MATTIS: OH, RIGHT.
MR. BOSTIC: AND SO THAT LINE WOULD NOT HAVE BEEN THERE AT THE TIME THAT YOU READ IT; CORRECT?
JAMES MATTIS: I WOULD NOT HAVE SEEN THAT, NO.
MR. BOSTIC: LET'S TURN TO PAGE 4 OF THIS EXHIBIT. AND DO YOU SEE AN IMAGE DISPLAYED AS PART OF THAT ARTICLE?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT DOES THAT IMAGE DEPICT, IF YOU HAVE AN UNDERSTANDING?
JAMES MATTIS: I'M SORRY, MR. BOSTIC?
MR. BOSTIC: AND WHAT DOES THAT IMAGE DEPICT?
JAMES MATTIS: THIS IS THE THAN NO -- THIS IS THE BLOOD SAMPLE SIZE.
MR. BOSTIC: AND THE CAPTION TO THAT IMAGE SAYS, "THERANOS CAN RUN AS MANY AS 7 TESTS --" I'M SORRY, "70 TESTS ON A SAMPLE THIS SIZE." IS THAT CORRECT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: LET'S TURN TO PAGE 11 OF THIS ARTICLE. THERE'S A LINE IN A PARAGRAPH BEGINNING, "THERANOS, WHICH DOES NOT." IF WE ZOOM IN THERE. DO YOU SEE LANGUAGE READING, "THERANOS, WHICH DOES NOT BUY ANY ANALYZERS FROM THIRD PARTIES, IS THEREFORE IN A UNIQUE POSITION"?
JAMES MATTIS: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH YOUR UNDERSTANDING AT THE TIME?
JAMES MATTIS: ABSOLUTELY. I WAS ASSUMING WE WERE SHOWING THE OTHERS NOT TO BE AS GOOD AS US, SO OF COURSE WE WERE USING OURS.
MR. BOSTIC: LET'S TURN BACK TO PAGE 6, PLEASE, IN THIS EXHIBIT. LET'S ZOOM IN ON THE TOP PARAGRAPH, PLEASE. THERE'S LANGUAGE THERE THAT SAYS, "THERANOS'S TESTS CAN BE PERFORMED ON JUST A FEW DROPS OF BLOOD, OR ABOUT 1/100TH TO 1/1,000TH OF THE AMOUNT THAT WOULD ORDINARILY BE REQUIRED." DO YOU SEE THAT LANGUAGE?
JAMES MATTIS: YES.
MR. BOSTIC: AND LET'S TURN THE PAGE TO PAGE 7. LET'S ZOOM IN ON THE PARAGRAPH BEGINNING, "PRECISELY" TOWARDS THE BOTTOM. THE ARTICLE SAYS, "PRECISELY HOW THERANOS ACCOMPLISHES ALL OF THESE AMAZING FEATS IS A TRADE SECRET." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND AS A MEMBER OF THE BOARD, DID YOU HAVE ANY OBLIGATIONS TO PROTECT SECRET INFORMATION WITHIN THERANOS?
JAMES MATTIS: THERE'S A DUTY OF CONFIDENTIALITY, YES.
MR. BOSTIC: AND DID YOU UNDERSTAND THAT AT THE TIME?
JAMES MATTIS: ABSOLUTELY.
MR. BOSTIC: WHEN YOU WERE A MEMBER OF THE BOARD, WERE YOU EVER TOLD BY MS. HOLMES THAT THERE WERE SOME FACTS THAT YOU WERE NOT ALLOWED TO KNOW BECAUSE THEY WERE TRADE SECRETS?
JAMES MATTIS: NO.
MR. BOSTIC: WOULD YOU HAVE BEEN SURPRISED TO HEAR THAT AT THE TIME?
JAMES MATTIS: OH, I WOULD CERTAINLY WANT TO KNOW IF SHE SAID IT, BUT I DON'T RECALL HER EVER SAYING IT SO.
MR. BOSTIC: AND IN YOUR VIEW WOULD CONFIDENTIAL INFORMATION HAVE BEEN SAFE WITH YOU?
JAMES MATTIS: I'VE MAINTAINED CONFIDENTIALITY OF A LOT OF SECRETS IN MY CAREER.
MR. BOSTIC: AND DURING YOUR MILITARY CAREER, DID YOU HAVE THE OPPORTUNITY TO BE PRIVY TO HIGHLY SENSITIVE INFORMATION, FOR EXAMPLE?
JAMES MATTIS: YES.
MR. BOSTIC: WOULD YOU HAVE TAKEN SERIOUSLY OR DID YOU TAKE SERIOUSLY THE OBLIGATION AT THERANOS TO MAINTAIN THAT CONFIDENTIALITY?
JAMES MATTIS: OF COURSE. WHEN I WENT ONTO THE BOARD, I WENT OUT AND BOUGHT BOOKS ABOUT WHAT YOU DO AS A MEMBER OF A BOARD AND STUDIED THEM. IT'S HIGHLIGHTED IN EVERY BOOK ABOUT BOARD MEMBER DUTIES. FURTHER, WHEN I GOT THE CALL FROM THE PERSON WHO WANTED TO TALK WITH ME, THE JOURNALIST, I WENT TO HER AND SAID NOW WHAT CAN I SAY? I WANTED TO MAKE CERTAIN HAVING RECEIVED A LOT OF INFORMATION AT THE BOARD MEETING THAT I DIDN'T SPEAK ABOUT THINGS WE NEEDED TO KEEP CONFIDENTIAL TO MAINTAIN OUR COMPETITIVE EDGE.
MR. BOSTIC: I'D ASK YOU TO TURN IN YOUR BINDER TO PAGE 4196, PLEASE. ONCE YOU'RE THERE, LET ME KNOW IF YOU RECOGNIZE IT.
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS EXHIBIT 4196?
JAMES MATTIS: IT'S A NOTE FROM MS. HOLMES TO ME FOR TALKING POINTS FOR A CALL FROM A NEW YORKER CORRESPON -- OR REPORTER.
MR. BOSTIC: IS THIS AN EMAIL THAT YOU RECEIVED IN SEPTEMBER OF 2014?
JAMES MATTIS: OH, YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT EXHIBIT 4196.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 4196 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE THE EMAIL THAT WE'VE BEEN TALKING ABOUT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND CAN YOU DESCRIBE FOR US THE PURPOSE OF THIS EMAIL AS YOU UNDERSTOOD IT?
JAMES MATTIS: YEAH. I DON'T RECALL TALKING TO THIS REPORTER, BUT I MAY HAVE. I JUST DON'T REMEMBER. AND THIS, AGAIN, IS MAKING CERTAIN THAT I KNOW WHAT I CAN TALK ABOUT AND WHAT I CANNOT. WE'RE GOING COMMERCIAL, WE'RE ROLLING IT OUT. I DON'T WANT TO INADVERTENTLY RELEASE INFORMATION THAT SHOULDN'T BE.
MR. BOSTIC: AND THIS EMAIL FROM MS. HOLMES SHE SAYS THAT FOR THAT CONVERSATION, ANY QUESTIONS THAT HE ASKS YOU ABOUT, AND THEN SHE LISTS THREE BULLET POINTS. SHE SAYS YOU CAN LET HIM KNOW WE DON'T TALK ABOUT THESE ON THE RECORD; IS THAT CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: ONE OF THE THINGS THAT YOU WERE INSTRUCTED NOT TO TALK ABOUT ON THE RECORD IS IN THE FIRST BULLET POINT WHERE IT SAYS SPECIFIC DOD PROGRAMS?
JAMES MATTIS: RIGHT.
MR. BOSTIC: IS DOD DEPARTMENT OF DEFENSE?
JAMES MATTIS: YES.
MR. BOSTIC: AND AT THIS TIME IN SEPTEMBER OF 2014 WERE YOU AWARE OF ANY SPECIFIC DOD PROGRAMS THAT YOU NEEDED TO KEEP OUT OF THIS CONVERSATION?
JAMES MATTIS: NO, BUT I WOULD NOT HAVE SPOKEN ABOUT THEM, EITHER. BUT, NO, I WAS NOT AWARE OF ANY.
MR. BOSTIC: BUT YOU'RE SAYING THAT YOU DIDN'T NEED TO BE TOLD TO KEEP IT OUT OF THE CONVERSATION ANYHOW?
JAMES MATTIS: WELL, SHE MAY HAVE BEEN CONTINUING WHAT I STARTED, THOUGH, WITH THAT EFFORT AT THE PILOT PROJECT, BUT I DID NOT WANT TO EVEN BE KEPT UP TO DATE ON THAT IN ORDER TO KEEP A FIREWALL BETWEEN ME AND ANYTHING GOING ON WITH DOD. SO I HAD NO PROBLEM WITH THIS GUIDANCE AT ALL.
MR. BOSTIC: OKAY. THE SECOND BULLET POINT THERE SAYS ANOTHER THING NOT TO BE TALKED ABOUT ON THE RECORD IS QUOTE, "HOW OUR TECHNOLOGY WORKS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND IN PARENTHESIS IT SAYS, "IE THAT THERE IS A SINGLE DEVICE THAT DOES ALL TESTS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND SO NOW WE'RE IN SEPTEMBER OF 2014. WAS IT STILL YOUR UNDERSTANDING AT THIS TIME THAT THERANOS HAD A SINGLE DEVICE THAT PERFORMED ALL OF ITS TESTS?
JAMES MATTIS: YEAH, I WAS -- I THOUGHT IT WAS RATHER STRANGE BECAUSE I THOUGHT WE HAD BEEN KIND OF OUT FRONT THAT THERE'S A SINGLE DEVICE AND WHY WOULD WE WANT TO HIDE THAT. I WAS THINKING MAYBE WE'RE NOW TRYING TO PULL -- AND WE'VE DONE THIS BEFORE IN THE MILITARY WHERE WE INADVERTENTLY RELEASED SOMETHING AND WE SAY DON'T TALK ABOUT IT ANYMORE, WE SHOULDN'T HAVE TALKED ABOUT THAT. SO I THOUGHT IT DIDN'T BOTHER ME BECAUSE I DIDN'T CONSIDER MYSELF A TECHNOLOGICAL EXPERT, AND I WASN'T GOING TO TALK ABOUT SOMETHING I WASN'T AN EXPERT IN ANYWAY.
MR. BOSTIC: BUT AM I UNDERSTANDING YOU CORRECTLY THAT YOU WERE SURPRISED THAT THIS WOULD EVEN BE A SECRET BECAUSE YOU THOUGHT IT WAS KNOWN?
JAMES MATTIS: WELL, YOU KNOW, IT'S -- WHEN YOU'RE IN A COMPETITIVE MARKETPLACE, COMPETITIVE BALL GAME, COMPETITIVE BATTLE GROUND, YOU HAVE TO ADAPT. AND MAYBE THERE'S SOME REASON SHE DIDN'T WANT TO REVEAL WE WERE DOING IT ON ONE DEVICE WAS THE WAY I INTERPRETED IT AT THE TIME.
MR. BOSTIC: SO AT THIS TIME IN SEPTEMBER OF 2014 YOU HAD NOT BEEN TOLD THAT THE COMPANY WAS USING THIRD PARTY ANALYZERS FOR MANY OF ITS TESTS?
JAMES MATTIS: I CANNOT RECALL WHEN I BECAME AWARE OF THAT. AND WHEN I BECAME AWARE OF IT, I THOUGHT IT WAS VERY LIMITED USE FOR INDIVIDUAL TESTS THAT PERHAPS WE HADN'T GOTTEN CERTIFIED, WE WEREN'T AUTHORIZED YET TO RUN. IN OTHER WORDS, IT WAS JUST -- THERE MIGHT HAVE BEEN SOME, BUT I WAS STILL GOING BACK IN MY MIND TO THE 2,000 TESTS I THOUGHT WE COULD RUN ON THE THERANOS ANALYZERS.
MR. BOSTIC: OKAY. I WANT TO MAKE SURE WE'RE CLEAR ON THIS. AT SOME POINT YOU DID LEARN THAT THERANOS WAS USING THIRD PARTY ANALYZERS FOR SOME OF ITS TESTS; IS THAT CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. BOSTIC: AND WHAT WAS YOUR UNDERSTANDING AT THAT TIME ABOUT THE PROPORTION OF THERANOS'S TESTS THAT NEEDED TO BE RUN ON THIRD PARTY DEVICES?
JAMES MATTIS: THAT IT WAS A VERY LIMITED NUMBER THAT WERE NOT -- THE ASSAYS WERE NOT YET ACCEPTED BY THE REGULATORY AGENCIES.
MR. BOSTIC: WHEN YOU SAY THAT THERE WAS A LIMITED NUMBER THAT WERE NOT YET ACCEPTED BY THE REGULATORY AGENCIES, DOES THAT MEAN YOU UNDERSTOOD THAT THE ONLY HURDLE TO USING THOSE TESTS WOULD BE REGULATORY APPROVAL?
JAMES MATTIS: YES, THAT WAS MY IMPRESSION AT THE TIME.
MR. BOSTIC: AND AS YOU UNDERSTOOD IT BASED ON INFORMATION FROM MS. HOLMES, WAS THE THERANOS DEVICE CAPABLE OF RUNNING THOSE ADDITIONAL TESTS?
JAMES MATTIS: YEAH. I ASSUMED IT WAS FOR 2,000 TESTS. BUT HAVING RUN INTO REGULATORY ISSUES TRYING TO DO A PILOT PROJECT, I WAS UNDERSTANDING IT MIGHT TAKE A WHILE TO GET EVERY ONE OF THEM THROUGH, AND THIS IS A VERY REGULATED INDUSTRY, AND IT MAY TAKE A WHILE TO GET EVERY ONE OF THEM THROUGH THE APPROVAL PROCESS.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT EXHIBIT 5408, PLEASE. DO YOU HAVE IT IN FRONT OF YOU?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECOGNIZE IT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS EXHIBIT 5408?
JAMES MATTIS: THIS IS A NOTE FROM HEATHER KING, WHO MS. HOLMES HAD HIRED, TO ALL OF US ON THE BOARD ABOUT "THE WALL STREET JOURNAL" REPORTER JOHN CARREYROU.
MR. BOSTIC: AND WAS HEATHER KING AN ATTORNEY?
JAMES MATTIS: I'M SORRY?
MR. BOSTIC: DO YOU KNOW WHETHER HEATHER KING WAS AN ATTORNEY FOR THERANOS?
JAMES MATTIS: I BELIEVE SO.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT EXHIBIT 5408.
MR. DOWNEY: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5408 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: IF WE CAN ZOOM IN, MS. HOLLIMAN, ON THE TEXT OF THE EMAIL, PLEASE.
MR. BOSTIC: GENERAL MATTIS, DO YOU SEE THAT THIS IS AN EMAIL SENT TO THE BOARD -- ACTUALLY, SORRY, MS. HOLLIMAN. IF WE CAN CAPTURE THE DATE OF THIS EMAIL AS WELL. GENERAL MATTIS, IS THIS AN EMAIL THAT YOU AND OTHER MEMBERS OF THE BOARD RECEIVED ON AUGUST 1ST, 2015, FROM HEATHER KING?
JAMES MATTIS: YES.
MR. BOSTIC: AND CAN YOU DESCRIBE THE SUBSTANCE OF THE EMAIL FOR US, PLEASE?
JAMES MATTIS: BASICALLY THERE WAS A REPORTER WHO WAS DEFAMING THE COMPANY AND WAS EXPOSING TRADE SECRETS. I HAD NOT TALKED WITH HIM. I'M NOT AWARE THAT HE TRIED TO GET AHOLD OF ME. HE MAY HAVE. BUT I DID NOT TAKE THE PHONE CALL. I JUST DON'T RECALL HIM EVER TRYING TO TALK TO ME.
MR. BOSTIC: AND IN THIS EMAIL THE BOARD IS BEING INSTRUCTED NOT TO SPEAK TO THAT JOURNALIST; CORRECT?
JAMES MATTIS: UH-HUH. THAT'S CORRECT.
MR. BOSTIC: AND WAS THIS DIFFERENT FROM THERANOS'S APPROACH TO OTHER JOURNALISTS IN THE PAST AS WE'VE BEEN DISCUSSING?
JAMES MATTIS: OH, YES. I MEAN, HE APPEARED TO BE GOING AFTER THE COMPANY, AND SO SHE DIDN'T WANT US TALKING WITH HIM.
MR. BOSTIC: AND I'LL ASK YOU TO LOOK AT EXHIBIT 2611, PLEASE. YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT THIS EXHIBIT. I UNDERSTAND IT'S BEEN STIPULATED TO.
MR. DOWNEY: YES, YOUR HONOR. NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 2611 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: SO WE'VE GONE BACK IN TIME TO A COUPLE EMAILS, AND WE'RE NOW AT JULY 14TH, 2015; CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU KNOW WHETHER YOU WERE PRESENT AT THE JULY 2015 BOARD MEETING AT THERANOS?
JAMES MATTIS: I'M NOT SURE I WAS. I THINK I WAS.
MR. BOSTIC: I'LL ASK YOU --
JAMES MATTIS: I THINK I ONLY MISSED ONE MEETING DURING MY TIME ON THE BOARD BECAUSE I WAS -- I HAD -- I WAS OVERSEAS, AND I COULDN'T GET BACK.
MR. BOSTIC: ALL RIGHT. I'LL DIRECT YOUR ATTENTION TO PAGE 5 OF THIS EXHIBIT, AND THERE'S A TITLE CHARTERING THE BOARD OF COUNSELORS. DO YOU SEE THAT?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND DO YOU KNOW WHAT THE BOARD OF COUNSELORS WERE AT THERANOS?
JAMES MATTIS: WELL, WE WERE LOOKING AT NOW THAT THE COMPANY WAS MATURING AND IT WAS NO LONGER A STARTUP, WE WERE STARTING TO PUT IN PLACE INTERNAL CONTROLS, INTERNAL SOP'S, THAT SORT OF THING. AND MS. HOLMES IS ADJUSTING THE OVERSIGHT AND CORPORATE BOARD TO ADAPT TO THE EXPANDING ROLE OF THE COMPANY IS HOW I LOOKED AT IT AT THE TIME.
MR. BOSTIC: THE FIRST BULLET POINT UNDER CHARTERING THE BOARD OF COUNSELORS READS DUTY OF LOYALTY. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND IF WE TURN THE PAGE AND WE CAN LOOK AT PAGE 6 OF THIS EXHIBIT THERE'S A SLIDE TITLED DUTY OF LOYALTY. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE CONTENT IS REDACTED. BUT MY QUESTION FOR YOU IS DO YOU RECALL A DISCUSSION, INCLUDING THE THERANOS BOARD, ABOUT THE DUTY OF LOYALTY?
JAMES MATTIS: VAGUELY. I DO RECALL IT. I DON'T RECALL THE DETAILS RIGHT NOW, AND I DON'T KNOW WHY IT'S REDACTED, BUT I REALLY CAN'T FILL IN THAT -- WHAT IS MISSING.
MR. BOSTIC: THAT'S OKAY. DO YOU REMEMBER YOUR REACTION AT THE TIME TO THIS PRESENTATION ABOUT THE DUTY OF LOYALTY?
JAMES MATTIS: WELL, MAYBE A QUESTION IN MY MIND IS THIS NEEDED WAS I LOOKED AROUND THE ROOM AND WHO WAS IN THE ROOM BESIDE ME. BUT, YOU KNOW, WHEN YOU'RE ON A BOARD LIKE THIS, YOU'RE THERE TO HELP THE CEO. YOU'RE TRYING TO ASSIST AS BEST YOU CAN. AND IF SHE FELT THAT WAS NECESSARY TO BRING UP, THEN YOU SHOULD AT LEAST GIVE IT SOME ATTENTION.
MR. BOSTIC: OKAY. WE CAN TAKE THAT DOWN. THANK YOU, MS. HOLLIMAN. DO YOU RECALL LATER IN 2015 THE JOURNALIST THAT WAS REFERENCED IN THAT EMAIL DID PUBLISH AN ARTICLE ABOUT THERANOS?
JAMES MATTIS: YES. YES.
MR. BOSTIC: AND DID YOU READ THAT ARTICLE?
JAMES MATTIS: I DID.
MR. BOSTIC: AND DID YOU READ IT AS SOON AS IT CAME OUT?
JAMES MATTIS: I'M SORRY?
MR. BOSTIC: DID YOU READ IT AS SOON AS IT CAME OUT?
JAMES MATTIS: PROBABLY WITHIN 24 HOURS, YES.
MR. BOSTIC: AND IT INCLUDED SOME FACTS OR CLAIMS ABOUT THE COMPANY; IS THAT CORRECT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: WOULD YOU DESCRIBE THAT ARTICLE AS FAVORABLE TO THE COMPANY OR UNFAVORABLE?
JAMES MATTIS: UNFAVORABLE.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT EXHIBIT 4553, PLEASE.
JAMES MATTIS: 4553?
MR. BOSTIC: 4553. DO YOU RECOGNIZE THAT DOCUMENT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS EXHIBIT 4553?
JAMES MATTIS: IT'S WITH MS. HOLMES, AND MR. BALWANI, AND HEATHER KING, AND ALL OF THE MEMBERS OF THE BOARD TALKING ABOUT WHAT WE'RE DOING IN RESPONSE TO THE ARTICLE AND THE ALLEGATIONS HERE.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT PAGE 2 OF THIS EXHIBIT. ACTUALLY, YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT EXHIBIT 4553.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 4553 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MS. HOLLIMAN, LET'S PROJECT PAGE 2 OF THIS EXHIBIT, PLEASE.
MR. BOSTIC: GENERAL MATTIS, GENERALLY SPEAKING IS THIS AN EMAIL DISCUSSION INCLUDING THE BOARD ABOUT THE CONTENT OF "THE WALL STREET JOURNAL" ARTICLE AND THE COMPANY'S RESPONSE?
JAMES MATTIS: WELL, LET ME READ THROUGH IT HERE AND SEE IF THAT'S THE ONLY --
MR. BOSTIC: PLEASE. TAKE YOUR TIME.
(PAUSE IN PROCEEDINGS.)
JAMES MATTIS: WELL, IT'S A LOT OF THE STANDARD, WHAT THERANOS IS ABOUT, WHAT WE DO, BUT IT IS IN RESPONSE TO "THE WALL STREET JOURNAL."
BY MR. BOSTIC:
MR. BOSTIC: IF I COULD DIRECT YOUR ATTENTION TO PAGE 2 OF THE EXHIBIT AND TOWARDS THE BOTTOM. LET'S HIGHLIGHT A MESSAGE FROM MR. KOVACEVICH.
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND LET'S START ONE ABOVE THAT, MS. HOLLIMAN. THANK YOU. THAT'S GOOD? DO YOU SEE HERE AN EMAIL THAT WAS SENT FROM MR. KOVACEVICH?
JAMES MATTIS: OKAY.
MR. BOSTIC: AND WAS HE A MEMBER OF THE THERANOS BOARD?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHO WERE THE OTHER INDIVIDUALS THAT THIS EMAIL WAS SENT TO JUST GENERALLY SPEAKING?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHO WERE THE INDIVIDUALS WHO RECEIVED THIS EMAIL IF YOU CAN TELL?
JAMES MATTIS: WILLIAM FOEGE, FORMER DIRECTOR OF THE CENTER OF DISEASE CONTROL, DR. PERRY. I'M NOT SURE ON THE K. MATTHEWS.
MR. BOSTIC: GENERALLY SPEAKING, WERE THESE OTHER MEMBERS OF THE THERANOS BOARD OF DIRECTORS?
JAMES MATTIS: YES. FOR CERTAIN ON DR. PERRY AND DR. FOEGE.
MR. BOSTIC: AND SOME EMAIL ADDRESSES ARE REDACTED HERE SO IT WILL BE DIFFICULT FOR YOU TO SEE ALL OF THEM.
JAMES MATTIS: I SEE.
MR. BOSTIC: AND THE TEXT OF THIS EMAIL SAYS, "SO WHEN BLOOD IS WITHDRAWN IN VENOUS TUBES DO I UNDERSTAND CORRECTLY THAT THE TESTS ARE THEN DONE ON LAB LIKE EQUIPMENT AND NOT EDISON AND THOSE ARE SENT TO CLIA FOR TESTING WHILE EDISON IS ONLY BEING USED FOR THE FDA TESTS"? DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND, FIRST OF ALL, THERE'S A MENTION OF EDISON. WHAT WAS YOUR UNDERSTANDING OF WHAT EDISON MEANT?
JAMES MATTIS: THE THERANOS ANALYZER.
MR. BOSTIC: THAT WAS THE THERANOS MANUFACTURED ANALYZER?
JAMES MATTIS: OH, THE THERANOS MANUFACTURED ANALYZER, YES.
MR. BOSTIC: MR. KOVACEVICH HERE APPEARS TO BE ASKING ABOUT HOW THERANOS USES VENOUS SAMPLES AND WHAT EQUIPMENT VENOUS SAMPLES ARE PROCESSED ON; RIGHT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WAS THAT SOMETHING THAT YOU ALSO HAD QUESTIONS ABOUT FOLLOWING THE PUBLICATION OF THIS "WALL STREET JOURNAL" ARTICLE?
JAMES MATTIS: YES. I HADN'T GOTTEN THIS EMAIL, AND WHEN I GOT TO IT I WENT UP AND FOUND HIS AND WAS VERY FOCUSSED ON HIS QUESTION. HE ASKED THE QUESTION THAT HAD COME TO MY MIND AS WELL.
MR. BOSTIC: WAS THIS AN IMPORTANT QUESTION IN YOUR MIND?
JAMES MATTIS: ABSOLUTELY.
MR. BOSTIC: WHY?
JAMES MATTIS: BECAUSE UP UNTIL THIS TIME I ASSUMED THAT WHEN WE TALKED ABOUT THERANOS WE WERE NOT TALKING ABOUT THERANOS ANALYZER AND OTHER THIRD PARTY ANALYZERS, IT WAS ABOUT THE THERANOS ANALYZER STANDING ALONE. THAT HAD BEEN MY UNDERSTANDING FROM MY FIRST INTRODUCTION TO THE THERANOS TECHNOLOGY, AND IT WAS THE REASON IN THE FIRST BOARD MEETING I WENT TO THAT WE COULD SAY THAT WE ARE FASTER, WE ARE MORE ACCURATE. SO WE WERE PUTTING OUR REPUTATION AT RISK. AND REPUTATIONAL RISK IS SOMETHING THAT I PAY A LOT OF ATTENTION TO COMING FROM MY FORMATIVE BACKGROUND.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT PAGE 1 OF THIS SAME EXHIBIT. MS. HOLLIMAN, LET'S ZOOM IN ON THE BOTTOM MESSAGE, PLEASE. DO YOU SEE ANOTHER EMAIL FROM MR. KOVACEVICH IN THIS SAME EMAIL THREAD?
JAMES MATTIS: YES.
MR. BOSTIC: AND HE FOLLOWS UP ON HIS PREVIOUS QUESTION. THE SECOND SENTENCE SAYS, "I AM STILL CONFUSED, HOWEVER, REGARDING MY PREVIOUS EMAIL. AT THIS MOMENT HOW MANY OF OUR CUSTOMER SUBMISSIONS ARE BEING TESTED ON LAB EQUIPMENT VERSUS EDISON?" DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND WAS THIS A QUESTION THAT YOU HAD AT THIS TIME?
JAMES MATTIS: EXACTLY.
MR. BOSTIC: AND WAS THIS AN IMPORTANT QUESTION TO YOU?
JAMES MATTIS: ABSOLUTELY.
MR. BOSTIC: AT THIS TIME IN OCTOBER OF 2015, IS THIS SOMETHING THAT YOU AND THE BOARD HAD NOT HAD A CLEAR UNDERSTANDING OF?
JAMES MATTIS: I CAN'T SPEAK FOR THE BOARD, BUT I CERTAINLY HAD NOT.
MR. BOSTIC: AND YOU SAID THAT YOU HAD BEEN PRESENT AT ALL OF THE BOARD MEETINGS SAVE FOR MAYBE ONE; IS THAT CORRECT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND LET'S ZOOM OUT AND THEN ZOOM IN ON THE TEXT OF MS. HOLMES'S RESPONSE, PLEASE. SO THE TOP TWO-THIRDS OF THIS PAGE. GENERAL MATTIS, IS THIS MS. HOLMES'S RESPONSE TO THE QUESTIONS THAT WE'VE JUST LOOKED AT?
JAMES MATTIS: RIGHT, YES, IT IS.
MR. BOSTIC: AND I'LL DRAW YOUR ATTENTION TO A FEW PORTIONS OF THIS RESPONSE, PLEASE. IN THE TOP PARAGRAPH MS. HOLMES SAYS, "THAT'S CORRECT -- WE ARE AT AN EXACT MOMENT IN TIME RIGHT NOW WHERE WE'VE JUST TRANSITIONED FROM OPERATING UNDER THE TRADITIONAL LABORATORY FRAMEWORK TO THE FDA FRAMEWORK. THIS IS WHAT THE LABORATORIES HAVE BEEN THREATENING TO SUE FDA ABOUT TO PREVENT SUCH A TRANSITION FROM BEING REQUIRED FOR THEM. WE ARE THE FIRST LAB TO DO THIS." DO YOU SEE THAT LANGUAGE?
JAMES MATTIS: YES.
MR. BOSTIC: AND SHE GOES ON TO SAY, "PART OF THIS TRANSITION MEANS MOVING ALL OPERATIONS FROM THE CLIA QUALITY SYSTEMS TO THE FDA QUALITY SYSTEMS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: SHE SAYS, "BY DEFINITION, IT IS NOT POSSIBLE TO OPERATE UNDER BOTH POLICIES AT THE SAME TIME."
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT WAS YOUR UNDERSTANDING FROM MS. HOLMES'S RESPONSE TO THESE QUESTIONS?
JAMES MATTIS: I WAS STILL CONFUSED, BUT I WAS AWARE AT THIS POINT THAT IT IS PROBABLY MORE THAN A COUPLE OF TESTS, A COUPLE OF ASSAYS. IT WAS MORE THAN THAT. AND SO MY IMPRESSION WAS THAT WE HAD AT A MINIMUM A PROBLEM WITH WHAT WE HAD BEEN SAYING, AND SO IT WAS TIME TO GO HELP THE CEO.
MR. BOSTIC: YOU FELT THAT WAS YOUR ROLE AS A BOARD MEMBER?
JAMES MATTIS: I'M SORRY?
MR. BOSTIC: YOU FELT THAT WAS YOUR ROLE AS A BOARD MEMBER?
JAMES MATTIS: ABSOLUTELY.
MR. BOSTIC: AND MS. HOLMES'S RESPONSE SAYS WE ARE AT AN EXACT MOMENT IN TIME RIGHT NOW WHERE WE'VE JUST TRANSITIONED FROM ONE FRAMEWORK TO ANOTHER; CORRECT?
JAMES MATTIS: UH-HUH.
MR. BOSTIC: AND WHAT DID THAT CAUSE YOU TO THINK, IF ANYTHING, ABOUT WHETHER THIS SITUATION WAS TEMPORARY OR NOT?
JAMES MATTIS: WHAT WAS THE LAST PART OF YOUR QUESTION?
MR. BOSTIC: SURE. WHAT DID THAT LANGUAGE CAUSE YOU TO THINK ABOUT WHETHER THIS SITUATION WAS TEMPORARY OR NOT, THERANOS'S USE OF VEIN DRAWS?
JAMES MATTIS: WELL, THE LANGUAGE WAS THAT WE HAD APPARENTLY BEEN USING VENOUS, AND I THOUGHT BECAUSE WE WERE UNDER CLIA AND WE WERE TRANSITIONING NOW WHOLLY OVER TO THERANOS AND KIND OF GOT CAUGHT IN MID STRIDE AT THIS POINT AND PROBABLY CONFUSED THE REPORTER IS WHAT I WAS THINKING.
MR. BOSTIC: FROM MS. HOLMES'S -- EXCUSE ME. FROM MS. HOLMES'S EMAIL RESPONSE DID YOU HAVE ANY SENSE THAT THE COMPANY'S USE OF VEIN DRAWS MIGHT BE BECAUSE OF LIMITATIONS IN THE THERANOS TECHNOLOGY?
JAMES MATTIS: I THINK AT THAT TIME I WAS THINKING IT WAS PROBABLY A REGULATORY PERMISSION, THAT OUR GEAR WAS WORKING BUT YOU WERE STILL WORKING TO GET THINGS APPROVED AND TRYING TO GET THERANOS APPROVED FOR EACH OF THE DIFFERENT TESTS. BUT I STILL THOUGHT WE HAD A REPUTATION PROBLEM HERE, AN INTEGRITY PROBLEM, MANAGERIAL INTEGRITY THAT WE WERE GOING TO BE EXPOSED. I THOUGHT ALL ALONG THAT WE WERE DOING IT ON THERANOS GEAR. I MEAN, I WAS A MEMBER OF THE BOARD AND I THOUGHT THAT.
MR. BOSTIC: AND LET ME JUST ASK MORE DIRECTLY. AT THIS TIME DID MS. HOLMES EVER TELL THE BOARD WE USE THIRD PARTY DEVICES BECAUSE THE EDISON CAN'T RUN MANY OF THE DEVICES THAT WE OFFER?
JAMES MATTIS: NO, IT WAS NEVER PRESENTED LIKE THAT. AS YOU CAN SEE SHE'S SAYING WE'RE TRANSITIONING. THERE IS STILL A SENSE OF CONFIDENCE. OBVIOUSLY WE WOULDN'T TRANSITION TO SOMETHING THAT IS NOT WORKING.
MR. BOSTIC: I'LL ASK YOU TO LOOK AT EXHIBIT 2932, PLEASE, 2932. LET ME KNOW ONCE YOU'RE THERE. DO YOU HAVE EXHIBIT 2932 IN FRONT OF YOU?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECOGNIZE IT?
JAMES MATTIS: YES.
MR. BOSTIC: AND IS THIS ANOTHER EMAIL OR ANOTHER EMAIL CHAIN INCLUDING MEMBERS OF THE BOARD AND MS. HOLMES FOLLOWING THE PUBLICATION OF THIS ARTICLE?
JAMES MATTIS: RIGHT.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT EXHIBIT 2932.
MR. DOWNEY: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED, AND IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 2932 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MS. HOLLIMAN, IF WE COULD START WITH PAGE 3, PLEASE. IF WE CAN ZOOM IN ON THE MESSAGE ON THE TOP HALF OF THE PAGE WHERE IT SAYS "THIS IS A VERY NICE STATEMENT."
JAMES MATTIS: YES.
BY MR. BOSTIC:
MR. BOSTIC: FIRST OF ALL, THIS IS FROM WILLIAM PERRY. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND HE WRITES TO MS. HOLMES AND THE BOARD, "THIS IS A VERY NICE STATEMENT, BUT DOES NOT REALLY ADDRESS THE MOST CRITICAL ISSUE; NAMELY THE ALLEGATIONS THAT THERANOS'S MACHINE, EDISON, MIGHT BE GIVING FAULTY READINGS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DO YOU RECALL DISCUSSIONS ABOUT ACCURACY PROBLEMS WITH THE EDISON AT THAT TIME?
JAMES MATTIS: THAT WAS A CONCERN WITH SEVERAL OF US ON THE BOARD.
MR. BOSTIC: AND WILLIAM PERRY SAYS THIS IS THE MOST CRITICAL ISSUE. DID YOU AGREE WITH HIM AT THE TIME THAT ACCURACY OF THE EDISON WAS THE MOST CRITICAL ISSUE?
JAMES MATTIS: ABSOLUTELY. MEDICAL ISSUES, YOU'RE DEALING WITH PEOPLE'S LIVES. ABSOLUTELY CRITICAL.
MR. BOSTIC: AND WILLIAM PERRY GOES ON TO SAY, "THERANOS NEEDS TO URGENTLY ADDRESS THAT ISSUE AND PUT IT TO REST WITH OBJECTIVE DATA." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND HE RECOMMENDS THAT THE COMPANY USE AN INDEPENDENT AGENCY TO CONDUCT BLIND TESTS. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AND DID YOU AGREE WITH THAT RECOMMENDATION?
JAMES MATTIS: 100 PERCENT. FROM MY FIRST DAYS ON THE BOARD IT HAD BEEN INDEPENDENT AGENCIES, FDA, YOU KNOW, JOHNS HOPKINS, OTHERS, THAT WE WERE ABLE TO POINT TO SAY THAT IT DOES WORK. AND SO WE NEEDED TO GET SOME THIRD PARTIES IN THERE, CREDIBLE THIRD PARTIES TO GIVE US CREDENCE AGAIN.
MR. BOSTIC: OKAY. WE CAN TAKE THAT DOWN. THANK YOU, MS. HOLLIMAN. THAT INDEPENDENT THIRD PARTY VERIFICATION -- FAST FORWARDING AHEAD A LITTLE BIT. TO YOUR KNOWLEDGE DID THAT WORK EVER ACTUALLY TAKE PLACE? WAS THERANOS'S ACCURACY EVER CONFIRMED SUFFICIENTLY BY A THIRD PARTY AFTER THIS TIME?
JAMES MATTIS: I DON'T BELIEVE SO. FROM MY KNOWLEDGE, NO. BUT THERE WAS THE THIRD PARTY VALIDATION FROM THE OCTOBER 2013 BOARD MEETING THAT WAS CITED THAT I STILL TOOK IN GOOD FAITH THAT THOSE EXCERPTS WERE ACCURATE STATEMENTS FROM JOHNS HOPKINS AND W.H.O. THAT THEY VALIDATED THERANOS. AND WHEN THERANOS WAS USED, I ASSUMED THAT WAS THE THERANOS ANALYZER THAT WAS BEING VALIDATED.
MR. BOSTIC: OKAY. SO YOU STILL CREDITED THE EARLIER CLAIMS AT THIS TIME AT LEAST?
JAMES MATTIS: NO. NOW I'M IN THE QUESTIONING MODE, BUT THAT'S WHERE I HAD THIRD PARTY VALIDATED FROM, IT WAS FROM TWO YEARS BEFORE. IT WAS NOT AT THIS POINT OR AFTER THIS.
MR. BOSTIC: AND CAN YOU TELL US MORE ABOUT THIS. HAD YOUR THINKING ABOUT THE TRUTH OF THOSE CLAIMS CHANGED AT THIS POINT? YOU SAID YOU WERE IN QUESTIONING MODE. WHAT DOES THAT MEAN?
JAMES MATTIS: WELL, INITIALLY I JUST THOUGHT WE HAD A PROBLEM WHERE WE PRESENTED THINGS WRONG. WE HAD A REPORTER, AGGRESSIVE, DOING HIS JOB, BUT HE MISSED WHAT WE WERE REALLY TRYING TO DO. AND SO LET'S ROLL UP OUR SLEEVES AND HELP ELIZABETH, MS. HOLMES, LET'S GET THE COMPANY GOING, REGAIN THE MORALE HIGH GROUND AND MAKE CERTAIN THAT WE CAN GIVE THESE THIRD PARTY VERIFICATION VALIDATIONS OF WHAT THERANOS CAN DO.
MR. BOSTIC: AND YOU STAYED ON THE BOARD FOR SEVERAL MONTHS AFTER THIS; CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THE PATH THAT YOU JUST OUTLINED, IN YOUR VIEW IS THAT THE PATH THAT THE COMPANY TOOK?
JAMES MATTIS: NO. I WOULD THINK THAT WE WERE UNABLE TO DO THAT AND PRETTY SOON YOU REALIZE -- I MEAN, I HAD TAKEN ON GOOD FAITH WHAT WE HAD HEARD AND -- BUT THERE HAD BEEN SOME SURPRISES, SOME DISAPPOINTING SURPRISES, AND NOW I WAS QUESTIONING WHETHER OR NOT EDISON WORKED. I CAN'T TELL YOU WHEN I ACTUALLY CAME TO THAT. INITIALLY I THOUGHT IT'S SOMETHING THAT WE CAN FIX BY GETTING THE TRUTH OUT THERE.
MR. BOSTIC: HELP ME APPRECIATE THE TIMING IF YOU CAN, AND I KNOW THIS WAS SEVERAL YEARS AGO. IT SOUNDS LIKE AT FIRST YOU BELIEVED THIS WAS SOMETHING THAT COULD BE FIXED. DO YOU RECALL WHEN YOU STARTED TO FEEL OTHERWISE?
JAMES MATTIS: WELL, I WAS TRYING TO DEFINE WHAT THE PROBLEM WAS AND THAT'S WHY I WAS VERY ATTENTIVE TO THE EMAILS BY BILL PERRY, BY DR. PERRY, AND BY DICK KOVACEVICH, AND FOLLOWING THAT PROBABLY -- I JUST, I REALLY HESITATE TO SAY WHEN. I WOULD SAY BY SOME TIME EARLY IN 2016 I WAS CONCERNED WITH IT, BUT I'M NOT SURE THAT I DECIDED THAT I COULDN'T TRY AND HELP MS. HOLMES TO GET THE COMPANY ON THE RIGHT TRACK. I WAS STILL GOING WITH THE IDEA THAT SOMEHOW THIS TECHNOLOGY WAS SO RADICALLY DIFFERENT THAT PERHAPS CONVENTIONAL WAYS OF EVALUATING IT FROM THE OUTSIDE COULD NOT SHOW THE PROMISE THAT IT REALLY HAD.
MR. BOSTIC: I WON'T ASK YOU ABOUT SPECIFIC TIMING. BUT DID THERE COME A TIME WHEN YOU ESSENTIALLY LOST HOPE THAT THE COMPANY WOULD BE ABLE TO VINDICATE ITSELF WHEN IT CAME TO ACCURACY?
JAMES MATTIS: YES. I DON'T RECALL THE EXACT TIME. THERE JUST CAME A POINT WHEN I DIDN'T KNOW WHAT TO BELIEVE ABOUT THERANOS ANYMORE.
MR. BOSTIC: AND DID THERE COME A TIME WHEN YOU SEPARATED FROM THERANOS AND WERE NO LONGER ON THE BOARD?
JAMES MATTIS: WELL, I THINK WE STOPPED HAVING BOARD MEETINGS AT SOME POINT. AND IN NOVEMBER I GOT THE UNANTICIPATED CALL TO BE INTERVIEWED FOR SECRETARY OF DEFENSE, AND AT THAT POINT I BROKE ALL CONTACT WITH STANFORD, HOOVER INSTITUTION, STANFORD UNIVERSITY, WITH OTHER BOARDS, FOOD BANK BOARDS AND EVERYTHING. AND SO IT ALL CAME OFF AT THAT POINT, AND THAT WAS PART OF IT.
MR. BOSTIC: AND YOU TALKED EARLIER ABOUT YOUR VIEW OF THE ROLE OF THE BOARD OF DIRECTORS. DO YOU RECALL THAT?
JAMES MATTIS: YES.
MR. BOSTIC: AT THERANOS DO YOU BELIEVE YOU AND THE BOARD WERE GIVEN THE INFORMATION THAT YOU NEEDED TO EFFECTIVELY PERFORM THAT ROLE?
JAMES MATTIS: INITIALLY I THOUGHT SO. THE BRIEFS WERE DETAILED. MANY OF THEM WERE DATA DRIVEN, BOTH THE FINANCIALS AND WHAT WE WERE GETTING AS FAR AS MEDICAL RESULTS AND WHERE THAT COULD TAKE US IN TERMS OF RETURNING ON THE PROMISE, FOR EXAMPLE, PREDICTIVE CAPABILITY. LOOKING BACK NOW I'M DISAPPOINTED IN THE LEVEL OF TRANSPARENCY. BY SEEING MS. HOLMES IN BETWEEN BOARD MEETINGS, AND I WOULD COME RIGHT OUT AND ASK HER WHAT ARE YOUR FUNDAMENTAL ISSUES AND WHAT CAN I DO TO HELP YOU. SO I LOOKED BACK TO SEE IF I HAD BEEN MAYBE UNAVAILABLE OR SOMETHING, AND I COULDN'T SEE WHY WE WERE BEING SURPRISED ON SUCH FUNDAMENTAL ISSUES.
MR. BOSTIC: IF MS. HOLMES HAD TOLD YOU THAT THE THERANOS ANALYZER, THE EDISON, COULD ONLY PERFORM 12 TESTS, WOULD THAT HAVE AFFECTED YOUR DECISION TO JOIN THE THERANOS BOARD?
JAMES MATTIS: PROBABLY. IF HER GOAL WAS STILL 2,000, AND SHE WAS GOING THROUGH THE STEPS AND UNDERSTOOD THE CHALLENGES, TECHNICAL AND REGULATORY, IT MIGHT NOT HAVE CAUSED ME TO STOP -- YOU KNOW, TO NOT JOIN OR TO LEAVE THE BOARD WHEN I HEARD IT.
MR. BOSTIC: YOU WERE ON THE THERANOS BOARD OF DIRECTORS AROUND THE TIME OF THE COMMERCIAL LAUNCH; CORRECT?
JAMES MATTIS: IN 2013?
MR. BOSTIC: UH-HUH.
JAMES MATTIS: YES.
MR. BOSTIC: AND THAT'S WHEN THERANOS STARTED OFFERING ITS TESTS TO THE PUBLIC; IS THAT RIGHT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND IF MS. HOLMES HAD COME TO THE BOARD AT THAT TIME AND SAID THE DEVICE ISN'T READY YET, WE NEED SOME MORE TIME TO GET MORE TESTS ON IT AND TO WORK ON ACCURACY ISSUES, HOW WOULD YOU HAVE RESPONDED?
JAMES MATTIS: ABSOLUTELY. LET'S GO OUT AND HELP RAISE MORE CASH TO KEEP THE COMPANY GOING AND GET IT RIGHT. THERE ARE SOME THINGS THAT YOU DON'T WANT TO ROLL OUT AS A PROTOTYPE THAT ISN'T PROVEN AND DEALING WITH PEOPLE'S LIVES, HEALTH CARE, THAT WOULD BE ONE OF THEM.
MR. BOSTIC: MAY I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST GOVERNMENT COUNSEL OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: ONE MORE QUESTION. GENERAL MATTIS, GOING BACK TO THE RESPONSE TO "THE WALL STREET JOURNAL" ARTICLE AND THE ADDITIONAL TESTING THAT THE BOARD WAS RECOMMENDING, DO YOU RECALL THAT?
JAMES MATTIS: THE ADDITIONAL TESTING FOR THIRD PARTY TESTING?
MR. BOSTIC: CORRECT.
JAMES MATTIS: YES.
MR. BOSTIC: AND WOULD THAT HAVE BEEN THE KIND OF COMPARISON TESTING THAT THE MILITARY WOULD HAVE DONE, THE SAME KIND OF COMPARING THERANOS RESULTS TO CONVENTIONAL ANALYZER RESULTS IN YOUR MIND?
JAMES MATTIS: THAT PROBABLY WOULD HAVE BEEN INCLUDED. I WOULD IMAGINE IT WOULD START WITH JUST THERANOS, THE INTEGRITY OF THE MACHINE ITSELF AND IT'S ABILITY TO DELIVER ACCURACY, AND I GUESS THAT WOULD TAKE, YOU KNOW, SOME KIND OF THIRD PARTY TESTING EQUIPMENT TO RUN IT AGAINST. BUT I'M NOT AN EXPERT IN THIS AREA, AND I WOULD JUST SAY WE WOULD HAVE TO PROVE THAT IT WAS ACCURATE.
MR. BOSTIC: AND AGAIN, BASED ON YOUR UNDERSTANDING AND YOUR RECOLLECTION, WAS THAT EVER PROVEN TO THE BOARD'S SATISFACTION FOLLOWING "THE WALL STREET JOURNAL" ARTICLE?
JAMES MATTIS: NOT DURING MY TENURE ON THE BOARD.
MR. BOSTIC: THANK YOU, YOUR HONOR. NO FURTHER QUESTIONS.
JUDGE DAVILA: WILL YOU HAVE CROSS-EXAMINATION?
MR. DOWNEY: YES, YOUR HONOR.
JUDGE DAVILA: LET'S TAKE TEN MINUTES. LET'S TAKE A TEN MINUTE BREAK. WE'LL TAKE A TEN MINUTE BREAK, AND THEN WE'LL RESUME WITH CROSS-EXAMINATION.
COURT CLERK: COURT IS IN RECESS.
(RECESS FROM 1:53 P.M. UNTIL 2:07 P.M.)
JUDGE DAVILA: THANK YOU. PLEASE BE SEATED. THANK YOU FOR YOUR COURTESY. WE'RE BACK ON THE RECORD. ALL COUNSEL ARE PRESENT, AND MS. HOLMES IS PRESENT. OUR JURY AND ALTERNATES ARE PRESENT. THE WITNESS IS ON THE STAND. YOU HAVE CROSS-EXAMINATION. MR. DOWNEY, COME FORWARD. LET ME SAY SOMETHING TO THE AUDIENCE PLEASE. IT'S COME TO MY ATTENTION THAT SOMEONE OR SOME FOLKS MIGHT HAVE A DEVICE THAT THEY ARE TYPING WITH. PLEASE -- AND THAT THE NOISE FROM THE TYPING, THE KEYS ARE BEING HEARD UP HERE IN THIS AREA. WE ARE ASKING THAT INDIVIDUALS WHO ARE USING DEVICES PLEASE HAVE SOUNDLESS, WHATEVER THAT DESCRIPTION IS, NOISELESS KEYPADS, PLEASE. IF YOU DON'T HAVE THAT, THEN YOU SHOULD TYPE SOFTLY, PLEASE, SUCH THAT IT DOESN'T INTERRUPT THESE PROCEEDINGS. THANK YOU VERY MUCH. THANK YOU. SORRY FOR INTERRUPTING YOUR EXAMINATION.
MR. DOWNEY: YOUR HONOR, I'VE PASSED OUT A COPY OF THESE EXHIBITS FOR THIS WITNESS. AND MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES. THANK YOU.
MR. DOWNEY: (HANDING.)
CROSS-EXAMINATION BY MR. DOWNEY:
MR. DOWNEY: GOOD AFTERNOON, SECRETARY MATTIS. DO YOU HAVE IN FRONT OF YOU A BINDER OF EXHIBITS, A BLACK BINDER?
JAMES MATTIS: YES.
MR. DOWNEY: AND I WANT TO ASK YOU ABOUT YOUR CAREER FOR A FEW MINUTES. YOU WERE 40 YEARS IN THE U.S. MARINE CORPS?
JAMES MATTIS: A LITTLE OVER THAT, YES, SIR.
MR. DOWNEY: AND THEN YOU SPENT ABOUT THREE AND A HALF YEARS IN PRIVATE LIFE?
JAMES MATTIS: I DID.
MR. DOWNEY: AND THEN YOU RETURNED TO PUBLIC SERVICE FOR A FEW YEARS?
JAMES MATTIS: YES, SIR.
MR. DOWNEY: YOU DON'T HAVE ANY EXPERIENCE IN CLINICAL LAB SERVICES OTHER THAN YOUR SERVICE ON THE THERANOS BOARD; IS THAT RIGHT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND YOU'RE NOT A SCIENTIST; CORRECT?
JAMES MATTIS: NO.
MR. DOWNEY: YOU'RE NOT AN ENGINEER?
JAMES MATTIS: NO.
MR. DOWNEY: AND YOU'RE DEPENDING ON OTHERS TO EVALUATE THE VALIDITY OF THERANOS'S TECHNOLOGY; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND YOU WEREN'T IN A POSITION TO EVALUATE ITS VALIDITY WHEN YOU FIRST MET WITH MS. HOLMES IN 2011; CORRECT?
JAMES MATTIS: NO.
MR. DOWNEY: AND YOU WEREN'T IN A POSITION TO EVALUATE IT WHEN YOU JOINED THE BOARD IN 2013; CORRECT?
JAMES MATTIS: NO.
MR. DOWNEY: AND YOU WEREN'T IN A POSITION TO EVALUATE IT IN 2015 WHEN QUESTIONS WERE RAISED ABOUT IT; CORRECT?
JAMES MATTIS: CORRECT.
MR. DOWNEY: AND THAT'S STILL TRUE TODAY; CORRECT?
JAMES MATTIS: CORRECT.
MR. DOWNEY: THERE WERE MEMBERS OF THE THERANOS BOARD WHEN YOU WERE A MEMBER OF THE BOARD WHO DID HAVE SOME SCIENTIFIC EXPERTISE; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ONE OF THEM WAS DR. BILL FRIST; CORRECT?
JAMES MATTIS: IT WAS, YES.
MR. DOWNEY: AND HE'S A RESPECTED SURGEON; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND A FORMER U.S. SENATOR?
JAMES MATTIS: UH-HUH, YES.
MR. DOWNEY: AND HE'S SOMEONE WHOSE OPINION YOU RESPECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ALSO DR. FOEGE WHO YOU MENTIONED WAS ALSO A MEMBER OF THE BOARD; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND HE WAS A FORMER DIRECTOR OF THE CENTER OF DISEASE CONTROL; CORRECT?
JAMES MATTIS: CORRECT.
MR. DOWNEY: AND WOULD THEY PARTICIPATE IN DISCUSSIONS AT THE BOARD MEETING RELATED TO ANY OF THE SCIENTIFIC ISSUES THAT WERE RAISED?
JAMES MATTIS: YES.
MR. DOWNEY: AND WAS THAT AN AREA WHERE YOU REFRAINED MORE AND JUST LISTENED OR DID YOU PARTICIPATE IN CONVERSATIONS ABOUT THE SCIENTIFIC DATA AND OTHER ISSUES RELATED TO THE SCIENCE OF LAB TESTING?
JAMES MATTIS: ON THOSE AREAS I DID A LOT OF LISTENING, NOT MUCH TALKING.
MR. DOWNEY: OKAY. WHEN YOU JOINED THE BOARD OF DIRECTORS, I THINK YOU TESTIFIED THAT IT WAS SHORTLY AFTER YOU RESIGNED FROM THE MILITARY IN 2013; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND TO JOIN THE BOARD OF DIRECTORS, YOU HAD TO GO TO THE DEPARTMENT OF THE NAVY AND ASK FOR WHAT IS CALLED A SAFE HARBOR LETTER; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND A SAFE HARBOR LETTER IS SOMETHING THAT IS COMMON FOR FORMER GOVERNMENT OFFICIALS AND MILITARY OFFICIALS TO REQUEST WHEN THEY ENTER THE PRIVATE SECTOR; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT EXHIBIT 10507.
JAMES MATTIS: YES.
MR. DOWNEY: DO YOU HAVE THAT IN FRONT OF YOU?
JAMES MATTIS: I DO.
MR. DOWNEY: AND DO YOU SEE -- DO YOU RECOGNIZE THE FIRST PAGE OF THAT EXHIBIT AS AN EMAIL FROM YOU TO MS. HOLMES?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU RECOGNIZE THE ATTACHED PAGES AS YOUR REQUEST FOR A SAFE HARBOR LETTER AND THEN THE SAFE HARBOR LETTER?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I BELIEVE 10507 WAS PREVIOUSLY ADMITTED, BUT IF NOT, I MOVE FOR ITS ADMISSION, AND I THINK IT'S ON STIPULATION.
MR. BOSTIC: IT'S NOT ADMITTED AND NOT STIPULATED BUT NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10507 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: MAY I ASK YOU TO PUBLISH, MR. BENNETT, THE LAST PAGE OF THE EXHIBIT. THE PAGE BEFORE THAT. IF YOU COULD HIGHLIGHT THE EMAIL FROM JIM TO ROBERT HOGUE.
MR. DOWNEY: DO YOU SEE THIS EMAIL FROM JULY 19TH, 2013, FROM YOU TO ROBERT HOGUE?
JAMES MATTIS: YES.
MR. DOWNEY: AND WHO IS ROBERT HOGUE?
JAMES MATTIS: HE'S THE COUNSEL TO THE COMMANDANT, THE LEGAL COUNSEL TO THE COMMANDANT OF THE MARINE CORPS.
MR. DOWNEY: AND HE'S THE INDIVIDUAL THAT YOU NEED TO CONTACT ABOUT RECEIVING A SAFE HARBOR LETTER; IS THAT RIGHT?
JAMES MATTIS: HE'S THE ONE WHO WOULD EVALUATE IT, YES.
MR. DOWNEY: AND IN YOUR EMAIL TO HIM YOU WRITE, "BOBBY, I NEED (ANOTHER) SAFE HARBOR LETTER IF YOU DETERMINE IT IS PERMISSIBLE. THIS ONE IS FOR THERANOS, INC. AND THE OFFER BELOW TO SERVE ON THEIR BOARD. IT'S A MEDICAL LAB COMPANY, A SILICON VALLEY STARTUP ATTEMPTING TO FIELD AN AUTOMATED MEDICAL LAB."
JAMES MATTIS: UH-HUH.
MR. DOWNEY: WAS THAT YOUR UNDERSTANDING OF THE COMPANY'S BUSINESS MISSION AT THAT TIME?
JAMES MATTIS: YES.
MR. DOWNEY: AND A FEW SENTENCES LATER YOU WRITE, "THERANOS IS FOCUSSED ON THE U.S. MEDICAL LAB MARKET HERE IN THE STATES," AND THEN YOU SAY "U.S. MILITARY MAY EVENTUALLY BE A CUSTOMER BUT LIKELY NOT IMMEDIATELY OR IN A BIG WAY."
JAMES MATTIS: UH-HUH.
MR. DOWNEY: WAS THAT YOUR UNDERSTANDING OF THERANOS'S RELATIONSHIP WITH THE MILITARY WHEN YOU JOINED THE BOARD?
JAMES MATTIS: YES, ABSOLUTELY.
MR. DOWNEY: AND WAS THAT INFORMATION THAT MS. HOLMES -- YOU HAD GAINED FROM MS. HOLMES?
JAMES MATTIS: NO. THAT WAS FROM MY OWN EXPERIENCE THAT WE HAD BEEN UNABLE TO EVEN GET A PILOT PROJECT STARTED.
MR. DOWNEY: OKAY. WELL, DID YOU KNOW WHAT OTHER EFFORTS THE COMPANY WAS MAKING IN THE MILITARY SPACE?
JAMES MATTIS: NO.
MR. DOWNEY: OKAY. DID YOU TALK TO MS. HOLMES AT ALL ABOUT THEIR PLANS FOR THE MILITARY MARKET BEFORE YOU SENT THIS EMAIL?
JAMES MATTIS: NO, I DID NOT.
MR. DOWNEY: OKAY. THE ONLY DISCUSSION YOU HAD WITH HER WAS THAT YOU WOULD NOT BE PART OF THE EFFORT TO OBTAIN DOD CONTRACTS; IS THAT RIGHT?
JAMES MATTIS: THERE'S 300 MILLION AMERICANS AND LESS THAN A MILLION MILITARY, I COULD SURMISE THAT WE PROBABLY WOULD NOT BE A BIG PART OF THEIR MARKET.
MR. DOWNEY: FAIR ENOUGH. AND YOU WERE ABLE TO OBTAIN THE SAFE HARBOR LETTER; CORRECT?
JAMES MATTIS: YES. I JUST SENT ANOTHER ONE PREVIOUSLY TO WORK AT STANFORD, AND THIS WAS A SECOND ONE IN A RATHER SHORT ORDER.
MR. DOWNEY: OKAY. AND SOME RESTRICTIONS WERE IMPOSED ON YOU IN CONNECTION WITH THE SAFE HARBOR LETTER; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ONE OF THOSE WAS THAT YOU COULDN'T PARTICIPATE IN ANY DISCUSSIONS ABOUT DOD CONTRACTS WITH EITHER DOD OR WITHIN THE COMPANY; RIGHT?
JAMES MATTIS: RIGHT. BUT I TOOK IT FURTHER TO THE BACK OFFICE KIND OF TALK. I WOULDN'T EVEN GIVE ADVICE ON BROADER ASPECTS.
MR. DOWNEY: AND YOU ABIDED BY THAT YOUR ENTIRE TIME AT THE COMPANY; CORRECT?
JAMES MATTIS: YES. AND MS. HOLMES NEVER BROACHED IT. SHE LIVED BY IT WHEN WE FIRST TALKED ABOUT.
MR. DOWNEY: AND DO YOU KNOW ANYTHING ABOUT THERANOS'S EFFORTS WITH ELEMENTS OF DOD OTHER THAN CENTCOM?
JAMES MATTIS: I'VE HEARD SECOND OR THIRD HAND OCCASIONALLY ABOUT IT, BUT I GOT NOTHING AUTHORITATIVE AND IT CAME TO NOTHING THAT I WAS AWARE OF.
MR. DOWNEY: WELL, ARE YOU FAMILIAR WITH THE U.S. INSTITUTE -- U.S. ARMY INSTITUTE OF SURGICAL RESEARCH IN HOUSTON, FORT SAM HOUSTON?
JAMES MATTIS: I'M AWARE IT EXISTS, BUT I'M NOT AWARE OF ANYTHING THAT THERANOS DID WITH THEM.
MR. DOWNEY: AND DO YOU KNOW OF ANYTHING THAT THERANOS DID IN CONNECTION WITH AFRICOM?
JAMES MATTIS: NO. THAT WAS ONE OF THE ONES I HEARD ABOUT, BUT NEVER FROM ANYONE IN AUTHORITY.
MR. DOWNEY: ARE YOU AWARE THAT THERANOS DEVICES WERE SENT TO AFRICA AND TRAVELLED WITH THE CHIEF SURGEON OF AFRICOM?
JAMES MATTIS: NO.
MR. DOWNEY: AND DO YOU KNOW ANYTHING ABOUT ANY OTHER EFFORTS THAT THERANOS UNDERTOOK WITH RESPECT TO DOD?
JAMES MATTIS: NO. I HEARD IN ONE OF THE BOARD MEETINGS ABOUT THE BAGRAM EFFORT, BUT I HAVE NO -- I JUST TOLD YOU ALL I KNEW ABOUT THAT ONE RIGHT THERE.
MR. DOWNEY: WHEN YOU JOINED THE BOARD, YOU WERE GRANTED STOCKING OPTIONS; CORRECT?
JAMES MATTIS: I BELIEVE SO.
MR. DOWNEY: AND CAN YOU EXPLAIN WHAT A STOCK OPTION IS?
JAMES MATTIS: I NEVER RECEIVED ANY PAPERWORK SO I CANNOT IN THIS CASE.
MR. DOWNEY: LET ME ASK YOU TO LOOK FIRST IN YOUR NOTEBOOK AT EXHIBIT 10520.
JAMES MATTIS: OKAY.
MR. DOWNEY: AND THERE'S AN EMAIL ATTACHING SOME DOCUMENTS. AND FOR PURPOSES OF OUR DISCUSSION, I'M ONLY INTERESTED IN THE ATTACHMENTS, NOT THE EMAIL.
JAMES MATTIS: RIGHT.
MR. DOWNEY: SO I WOULD DIRECT YOUR ATTENTION TO EXHIBIT A, PAGE 4 OF EXHIBIT A. IS THAT YOUR SIGNATURE?
JAMES MATTIS: IT IS.
MR. DOWNEY: AND IT IS DATED JANUARY 17TH, 2014; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND IF YOU LOOK AT EXHIBIT B, THAT'S ALSO YOUR SIGNATURE ON THE SECOND PAGE?
JAMES MATTIS: THE SAME DATE, YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 10520, ONLY EXHIBITS A AND B.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: THEY'RE ADMITTED, AND THEY MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10520A AND 10520B WERE RECEIVED IN EVIDENCE.)
MR. DOWNEY: IF I COULD ASK YOU TO PUBLISH THE PARAGRAPH 1 OF EXHIBIT A.
MR. DOWNEY: FIRST OF ALL, DO YOU SEE ABOVE PARAGRAPH A THERE'S WRITING AND IT SAYS ELIZABETH HOLMES. IS THAT YOUR WRITING?
JAMES MATTIS: NO, IT IS NOT.
MR. DOWNEY: PARAGRAPH 1 SAYS, EXERCISE OF OPTION," AND THEN IT READS, "EFFECTIVE AS OF TODAY JANUARY 17TH, 2014, THE UNDERSIGNED HEREBY ELECTS TO EXERCISE OPTIONEE'S OPTION TO PURCHASE 500,000 SHARES OF COMMON STOCK OF THERANOS INC." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND IF WE LOOK AGAIN AT PAGE 4 OF THIS DOCUMENT, THAT'S YOUR SIGNATURE; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: DOES THAT REFRESH YOUR RECOLLECTION THAT YOU WERE GRANTED OPTIONS WHILE AT THERANOS?
JAMES MATTIS: IT DOES. I NEVER HAD A COPY OF THIS. I SIGNED IT THERE THAT DAY AND THERE WAS NO -- I MEAN, I DON'T RECALL RECEIVING ANY PAPERWORK AT ANY TIME.
MR. DOWNEY: IF YOU LOOK AT EXHIBIT B AND IF YOU LOOK AT THE TOP SEGMENT UNDER THE INVESTMENT REPRESENTATION STATEMENT, YOU SEE YOUR NAME NEXT TO OPTIONEE, AND THEN IT SAYS COMMON STOCK AND IT REFLECTS AN AMOUNT OF $85,000; CORRECT?
JAMES MATTIS: UH-HUH.
MR. DOWNEY: IS THAT THE AMOUNT YOU PAID TO EXERCISE THESE OPTIONS WHICH WERE GRANTED TO YOU BY THERANOS?
JAMES MATTIS: I BELIEVE SO. I'D HAVE TO CHECK, BUT I THINK IT IS.
MR. DOWNEY: OKAY. IN ADDITION TO ANY OPTIONS THAT YOU MAY HAVE GOTTEN, DID YOU ALSO RECEIVE A SALARY AS A DIRECTOR OF THERANOS?
JAMES MATTIS: YES.
MR. DOWNEY: AND HOW MUCH WERE YOU PAID TO SERVE AS A DIRECTOR OF THERANOS?
JAMES MATTIS: WELL, FIRST I'D LIKE TO POINT OUT THAT WHEN MS. HOLMES MADE THE OFFER, I SAID I'LL DO THIS, YOU DON'T HAVE TO PAY ME, I BELIEVE IN WHAT YOU'RE DOING. AND SHE SAID, NO, IT'S -- I BELIEVE IT WAS $50,000 A YEAR.
MR. DOWNEY: OKAY. WE'RE GOING TO TALK MORE ABOUT THAT CONVERSATION IN A MINUTE. BUT JUST TO GET THE FACTS OUT ABOUT THE SALARY, CAN I ASK YOU TO LOOK AT, IN YOUR NOTEBOOK, AT EXHIBIT 13807. I'M ASKING YOU TO LOOK AT THE TOP OF THE SECOND PAGE UNDER NEW DIRECTORS.
JAMES MATTIS: UH-HUH.
MR. DOWNEY: AND THERE'S A DISCUSSION THERE RELATED TO YOURSELF AND MR. KOVACEVICH. DOES REVIEWING THIS REFRESH YOUR RECOLLECTION THAT YOUR ANNUAL COMPENSATION WAS $150,000 TO SERVE AS A DIRECTOR?
JAMES MATTIS: I GUESS IT DOES, YES.
MR. DOWNEY: AND WERE YOU PAID THAT IN 2013?
JAMES MATTIS: I BELIEVE I WAS. I'M NOT -- I'D HAVE TO CHECK THE RECORDS.
MR. DOWNEY: DO YOU RECALL THAT MS. HOLMES PAID YOU FOR THE ENTIRE -- OR THE COMPANY PAID YOU FOR THE ENTIRE YEAR, EVEN THOUGH YOU BEGAN SERVICE A LITTLE BIT LATER INTO THE YEAR?
JAMES MATTIS: I ASSUME IT WAS FOR 12 MONTHS, THE SUCCEEDING 12 MONTHS.
MR. DOWNEY: AND WERE YOU PAID FOR EACH OF YEARS THAT YOU WERE ON THE BOARD, TO THE BEST OF YOUR RECOLLECTION?
JAMES MATTIS: I DON'T BELIEVE SO.
MR. DOWNEY: AND I'D LIKE TO ASK YOU ABOUT WHEN YOU JOINED THE BOARD. YOU MENTIONED AT SOME POINT IN YOUR DIALOGUE WITH MR. BOSTIC THAT YOU REVIEWED SOME BOOKS ABOUT SERVING AS A DIRECTOR; CORRECT?
JAMES MATTIS: UH-HUH.
MR. DOWNEY: DO YOU REMEMBER WHAT BOOKS THOSE WERE THAT YOU REVIEWED?
JAMES MATTIS: THERE WERE TWO -- I WAS LECTURING AT VARIOUS COLLEGES, WENT TO BUSINESS SCHOOL LIBRARIES OR BOOK STORES AND PICKED UP TWO -- TWO WERE BOOKS AND TWO WERE PAMPHLETS. I DON'T RECALL THE TITLES OF THEM RIGHT NOW. AND THE PAMPHLETS TURNED OUT, I THINK TO BE THE MOST -- THE BOOKS WERE GOOD BACKGROUND, BUT THE PAMPHLETS ACTUALLY GOT INTO THE NITTY GRITTY.
MR. DOWNEY: AND WHEN YOU JOINED THE BOARD, WERE THERE SEVERAL DIRECTORS WHO HAD HAD A LOT OF EXPERIENCE AS DIRECTORS OF COMPANIES; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND MR. NUNN, FOR EXAMPLE, MR. SAM NUNN WAS A DIRECTOR OF THE COMPANY; CORRECT?
JAMES MATTIS: YES, SENATOR NUNN, YES.
MR. DOWNEY: AND SENATOR NUNN HAD BEEN A DIRECTOR OF SEVERAL BLUE CHIP AMERICAN COMPANIES, COCA-COLA, GENERAL ELECTRIC, ET CETERA?
JAMES MATTIS: YES.
MR. DOWNEY: AND DID YOU TALK TO HIM ABOUT YOUR DUTIES AS A BOARD MEMBER?
JAMES MATTIS: I LEARNED FROM WATCHING HIM, DAVID BOIES, AND THE OTHERS, YES, AND WE TALKED ABOUT IT, ABOUT WHAT YOU DO.
MR. DOWNEY: AND WHAT -- DID MR. BOIES GIVE YOU AN INTRODUCTION TO YOUR LEGAL DUTIES ACTING AS A DIRECTOR?
JAMES MATTIS: DURING BREAKS -- WE ACTUALLY SAT NEXT TO EACH OTHER DURING THE BOARD MEETINGS AND, YES, WE WOULD TALK ABOUT THAT MOSTLY DURING THE BREAKS WHEN HE AND I TALKED ALONE.
MR. DOWNEY: AND WERE THOSE HELPFUL TO YOU TO LEARN YOUR OBLIGATIONS AND RESPONSIBILITIES?
JAMES MATTIS: I'M LEARNING ALL OF THE TIME FROM PEOPLE WITH THAT EXPERIENCE.
MR. DOWNEY: YOU TESTIFIED THAT YOU'RE FAIRLY CONFIDENT YOU WERE AT THE OCTOBER 2013 BOARD MEETING; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND IT LOOKS LIKE THAT HAD BEEN -- YOU HAD BEEN IN NEW HAMPSHIRE THE PRIOR DAY AND THEN CAME BACK OVERNIGHT. DOES THAT HELP YOU REFRESH YOUR RECOLLECTION THAT YOU WERE THERE?
JAMES MATTIS: RIGHT. I'M ALMOST CERTAIN I WAS THERE.
MR. DOWNEY: I WANT TO ASK YOU A LITTLE ABOUT THAT BOARD MEETING AND THEN SOME OF THE SUBSEQUENT BOARD MEETINGS. IN CONNECTION WITH THAT, I'M GOING TO ASK YOU TO LOOK AT WHAT MR. BOSTIC SHOWED TO YOU AS EXHIBIT 1172. THIS WAS ADMITTED DURING YOUR DIRECT EXAMINATION. I'M GOING TO ASK YOU TO LOOK AT THE THIRD PAGE OF THIS EXHIBIT, THE PAGE THAT IS LABELLED AGENDA. AND IT'S ON YOUR SCREEN AS WELL IF THAT MAKES IT EASIER TO LOCATE. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND WAS THAT IN FACT THE MORNING AGENDA FOR THIS MEETING?
JAMES MATTIS: I CANNOT RECALL. I ASSUME THAT THIS IS ACCURATE, BUT I CAN'T VERIFY THAT.
MR. DOWNEY: OKAY. LET ME SHOW YOU AS WELL THE NEXT SLIDE, WHICH IS LABELLED BRIEFING AND STRATEGIC PLAN. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU REMEMBER THE CONTENT OF THE BRIEFING AND STRATEGIC PLAN AT YOUR FIRST BOARD MEETING?
JAMES MATTIS: NO.
MR. DOWNEY: WHEN YOU HAD MET WITH MS. HOLMES IN 2011, YOU CAME TO UNDERSTAND THAT SHE WAS DEVELOPING THIS TECHNOLOGY WHICH HAD AS ONE COMPONENT A DEVICE THAT COULD RUN BLOOD TESTS; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND YOU LEARNED, AT SOME POINT SHORTLY BEFORE YOU BECAME A DIRECTOR, THAT THERANOS WOULD BE OFFERING BLOOD TESTS TO THE PUBLIC; CORRECT?
JAMES MATTIS: GOING -- COMMERCIALIZING IT, YES.
MR. DOWNEY: AND YOU REFERRED TO IT AS COMMERCIALIZING. IS THAT HOW IT WAS REFERRED TO WITHIN --
JAMES MATTIS: I BELIEVE SO.
MR. DOWNEY: -- THERANOS? AND DO YOU KNOW WHERE THE BLOOD TESTS WERE BEING PERFORMED IN CONNECTION WITH THAT VENTURE?
JAMES MATTIS: I BELIEVE ONE OF THE PLACES WAS WALGREENS IN DOWNTOWN PALO ALTO BECAUSE I WALKED BY IT GOING TO THE BARBER SHOP.
MR. DOWNEY: AND YOU COULD HAVE YOUR BLOOD DRAWN IN A WALGREENS; CORRECT?
JAMES MATTIS: YES, SIR.
MR. DOWNEY: AND THEN WHERE WAS THE BLOOD ANALYZED?
JAMES MATTIS: WELL, I ASSUMED IF IT WAS A THERANOS DRAW, IT WAS A THERANOS EDISON MACHINE.
MR. DOWNEY: AND WERE YOU AWARE WHEN YOU JOINED THE BOARD THAT THE BLOOD WAS BEING SENT BACK TO A CENTRAL THERANOS LAB?
JAMES MATTIS: I ASSUMED THE CENTRAL THERANOS LAB WAS THE THERANOS MACHINE, YES.
MR. DOWNEY: OKAY. DID YOU KNOW THAT THERANOS HAD BUILT A LABORATORY TO RUN SO-CALLED CLIA TESTS?
JAMES MATTIS: YES.
MR. DOWNEY: AND YOU TOURED THAT LABORATORY, DIDN'T YOU?
JAMES MATTIS: I HAVE BEEN TO THE NEWARK FACILITY. I DON'T BELIEVE -- I DON'T RECALL. CAN YOU REFRESH ME ON WHAT I WOULD HAVE SEEN THERE?
MR. DOWNEY: IN ANY EVENT, YOU WERE AWARE THAT THERE WAS A LABORATORY THAT WAS PERFORMING PATIENT TESTING?
JAMES MATTIS: ABSOLUTELY, YES. I SEE.
MR. DOWNEY: AND YOU UNDERSTOOD THAT THE TESTS WERE BEING -- NOT BEING PERFORMED WITHIN WALGREENS STORES; CORRECT?
JAMES MATTIS: ABSOLUTELY.
MR. DOWNEY: DID YOU, DID YOU EVER HAVE A DISCUSSION IN THE CONTEXT OF A BOARD MEETING ABOUT HIGH THROUGHPUT MACHINES?
JAMES MATTIS: HIGH THROUGHPUT? I DON'T RECALL THAT.
MR. DOWNEY: OKAY. AND DID -- WAS THERE EVER ANY DISCUSSION ABOUT WHETHER IT MADE SENSE TO RUN A BUSINESS WHICH CONSISTED OF TRANSPORTING BLOOD SAMPLES BACK TO A CENTRAL LAB TO PERFORM THEM ONE AT A TIME ON SINGLE ANALYZERS?
JAMES MATTIS: I THINK WE TALKED AT LENGTH OVER THOSE YEARS ABOUT HOW THE THERANOS -- WHAT ITS FOOTPRINT WOULD LOOK LIKE, WHERE IT WOULD BE OPERATING, WHERE THE THERANOS -- WHERE THE EDISON MACHINES WOULD BE USED. IT WAS PART OF THE ROLLOUT. MS. HOLMES WOULD LEAD THE DISCUSSION.
MR. DOWNEY: AND YOU UNDERSTOOD THAT THE HOPE WAS THAT THE DEVICES WOULD ULTIMATELY BE PLACED IN THE WALGREENS STORES; CORRECT?
JAMES MATTIS: I THOUGHT THAT WAS GOING TO HAPPEN AT SOME POINT, YES.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT A BARRIER IN THE RELATIONSHIP BETWEEN WALGREENS AND THERANOS TO THAT HAPPENING WAS THAT WALGREENS WANTED THERANOS TO GET FDA APPROVAL FOR THE USE OF THE DEVICES IN THAT WAY?
JAMES MATTIS: WELL, I THOUGHT FDA APPROVAL WAS GOING TO BE NECESSARY IF WE WERE GOING TO MOVE THIS COMMERCIALLY ACROSS THE COUNTRY.
MR. DOWNEY: OKAY. AND SO, SO YOU UNDERSTOOD THAT YOU WOULD HAVE TO HAVE FDA APPROVAL IN ORDER TO ROLL THE DEVICES OUT INTO THE STORES; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: I'M NOT GOING TO GO THROUGH ALL OF THE DIRECTORS. YOU HAD SOME DISCUSSION WITH MR. BOSTIC ABOUT WHO THEY WERE. BUT IS IT FAIR TO SAY THAT THEY WERE A VERY STRONG GROUP OF INDIVIDUALS?
JAMES MATTIS: IT WAS AN ECLECTIC GROUP THAT HAD VARIED BACKGROUNDS. THEY WERE PROVEN IN THEIR FIELD, YES, THEY WERE STRONG.
MR. DOWNEY: AND THEY WERE CAPABLE OF EXPRESSING THEIR OPINIONS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND THEY WERE CAPABLE OF ASKING QUESTIONS IF THEY HAD UNCERTAINTY; CORRECT?
JAMES MATTIS: ABSOLUTELY.
MR. DOWNEY: AND ALSO THEY WERE WILLING TO BE CANDID WITH EACH OTHER AND WITH MS. HOLMES; CORRECT?
JAMES MATTIS: YES, I BELIEVE SO. I DON'T WANT TO SPEAK FOR THEM BUT, YES, THAT'S MY OBSERVATION.
MR. DOWNEY: I WANT TO ASK YOU ABOUT DISCUSSIONS OF INTELLECTUAL PROPERTY AT BOARD MEETINGS. DO YOU RECALL SUCH DISCUSSIONS?
JAMES MATTIS: YES.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT DEFENDANT'S EXHIBIT 10508.
JAMES MATTIS: YES.
MR. DOWNEY: I'M SORRY. I BEG YOUR PARDON. LET ME DIRECT YOUR ATTENTION TO EXHIBIT 13792.
JAMES MATTIS: OKAY.
MR. DOWNEY: IF YOU LOOK AT PAGE 5 OF PAGE 13792, YOU SEE A SECTION THERE CALLED INTELLECTUAL PROPERTY DISCUSSION?
JAMES MATTIS: YES.
MR. DOWNEY: IS IT ACCURATE THAT MS. HOLMES WOULD REVIEW, DURING BOARD MEETINGS, THE COMPANY'S PATENT PORTFOLIO?
JAMES MATTIS: YES, IT WAS COMMONLY DISCUSSED, YES.
MR. DOWNEY: AND WERE THERE SOME INSTANCES WHEN MR. BOIES WOULD DISCUSS THE LEGAL ASPECTS --
JAMES MATTIS: YES.
MR. DOWNEY: -- OF INTELLECTUAL PROPERTY?
JAMES MATTIS: UH-HUH, YES.
MR. DOWNEY: AND YOU RECOGNIZED THAT THERE WAS A SENSITIVITY WITHIN THE COMPANY TO PROTECTING ITS INTELLECTUAL PROPERTY RIGHTS?
JAMES MATTIS: ABSOLUTELY.
MR. DOWNEY: AND YOU RECOGNIZE THAT THEY HAD ALREADY HAD LITIGATION ABOUT PROTECTING THEIR INTELLECTUAL PROPERTY RIGHTS; CORRECT?
JAMES MATTIS: I DIDN'T KNOW THAT IN DETAIL. I KNOW THAT IT OCCURRED AND IN THE READING THAT I HAD DONE AND IN THE BOARDROOM BOOKS AND ALL OF THE BOARD BOOKS AND ALL, THIS WAS AN AREA THAT WAS HIGHLIGHTED.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT 10516 IN YOUR NOTEBOOK. DO YOU SEE THAT?
JAMES MATTIS: YEAH, UH-HUH.
MR. DOWNEY: IS THIS A DOCUMENT THAT WAS DISTRIBUTED AT A BOARD OF DIRECTORS MEETING?
JAMES MATTIS: IT LOOKS LIKE IT. I COULDN'T BE CERTAIN. IT APPEARS TO BE SIMILAR TO SOME OF THOSE PASSED OUT.
MR. DOWNEY: YOUR HONOR, I MOVE FOR THE ADMISSION OF 10516.
MR. BOSTIC: YOUR HONOR, I'M NOT SURE THIS HAS BEEN AUTHENTICATED PROPERLY, YOUR HONOR.
JUDGE DAVILA: DOES THIS REQUIRE ANY AUTHENTICATION OR ANY REDACTIONS? IS THERE PROPRIETARY INFORMATION IN THIS?
MR. DOWNEY: THERE'S NOT PROPRIETARY INFORMATION. THERE'S JUST A LIST OF PATENTS OR PATENT APPLICATIONS THAT WAS ATTACHED AND REMOVED FROM THE BOARD EXHIBIT, WHICH MR. BOSTIC PREVIOUSLY SUBMITTED.
JUDGE DAVILA: IS IT IN THAT PACKET, THE LARGER PACKET?
MR. DOWNEY: IT'S NOT AS HE PUT IT TOGETHER, BUT IT'S PART OF THE ORIGINAL PACKET, YES.
JUDGE DAVILA: ALL RIGHT. I'LL ADMIT IT.
(DEFENDANT'S EXHIBIT 10516 WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: IT MAY BE PUBLISHED.
BY MR. DOWNEY:
MR. DOWNEY: SO YOU SEE THIS LABELLED AS AN INTELLECTUAL PROPERTY PORTFOLIO STATUS REPORT?
JAMES MATTIS: YES.
MR. DOWNEY: AND IS IT CORRECT THAT THIS IS THE TYPE OF DOCUMENT THAT WOULD BE SHARED WITH THE BOARD TO LIST THE PATENTS THAT WERE IMPORTANT TO THE COMPANY?
JAMES MATTIS: YEAH, IT LOOKS FAMILIAR.
MR. DOWNEY: AND WOULD SOMETIMES, DURING BOARD MEETINGS, PARTICULAR PATENTS AND INVENTIONS BE DISCUSSED AND REVIEWED BY MS. HOLMES?
JAMES MATTIS: YES.
MR. DOWNEY: AND WOULD MR. BOIES ALSO DISCUSS CERTAIN PATENTS OR TRADE SECRETS DURING THE COURSE OF THESE MEETINGS?
JAMES MATTIS: I BELIEVE SO. I COULDN'T CITE ANY IN PARTICULAR OR MUCH OF THE CONVERSATION THIS MANY YEARS LATER.
MR. DOWNEY: BUT GENERALLY YOU REMEMBER THERE WAS A DISCUSSION ABOUT INTELLECTUAL PROPERTY ISSUES; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND WERE YOU AWARE WHEN YOU WERE SERVING AS A DIRECTOR THAT THERANOS HAD FILED AND OBTAINED HUNDREDS OF PATENTS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: OKAY. ALL RIGHT. THAT'S ALL I HAVE ON THAT SUBJECT.
JAMES MATTIS: UH-HUH.
MR. DOWNEY: YOU MENTIONED THAT THERE WOULD BE PRESENTATIONS OF FINANCIAL INFORMATION AND THAT MS. HOLMES MIGHT PROVIDE SOME INFORMATION ABOUT FINANCES AND MR. BALWANI WOULD PROVIDE SOME INFORMATION ABOUT FINANCES; CORRECT?
JAMES MATTIS: THAT'S CORRECT. SHE WOULD MORE INTRODUCE A STRATEGY AND WHAT WE WERE DOING, AND MR. BALWANI WOULD GIVE FINANCIAL DETAILS.
MR. DOWNEY: OKAY. AND WOULD HE COMMENT ON HISTORICAL FINANCIAL INFORMATION OF THE COMPANY?
JAMES MATTIS: I THINK HE WOULD GENERALLY -- I CAN'T RECALL. I REMEMBER HE TALKED ABOUT FORECASTS. I DON'T RECALL HOW MUCH HISTORIC FINANCIAL DATA.
MR. DOWNEY: OKAY. DID HE PROVIDE FORECASTS FOR DIFFERENT SCENARIOS?
JAMES MATTIS: YES.
MR. DOWNEY: AND THOSE WOULD, OF COURSE, POTENTIALLY REFLECT DIFFERENT EARNING AMOUNTS; CORRECT?
JAMES MATTIS: RIGHT. THEY WERE LOOKING DIFFERENT -- WHERE THEY WANTED TO DEPLOY THE THERANOS CAPABILITY AND IF WE WENT WITH PENNSYLVANIA HERE OR INTERMOUNTAIN OR CERTAIN HOSPITAL CHAINS, THAT SORT OF THING, THAT WAS LAID OUT WHAT IT WOULD MEAN. WE WERE TRYING TO CREATE A PROFITABLE COMPANY SO IT WOULD STAY IN EXISTENCE.
MR. DOWNEY: AND THERE WOULD BE BOARD DISCUSSION ABOUT THOSE SCENARIOS?
JAMES MATTIS: THERE WOULD, YES.
MR. DOWNEY: I WANT TO SWITCH TOPICS TO THE SUBJECT OF MS. HOLMES'S PERSONAL SECURITY. DID THERE COME A TIME WHEN MEMBERS OF THE BOARD BEGAN TO DISCUSS THE NEED FOR MS. HOLMES TO OBTAIN PERSONAL SECURITY?
JAMES MATTIS: YES.
MR. DOWNEY: AND WERE YOU INVOLVED IN THOSE DISCUSSIONS?
JAMES MATTIS: SECRETARY SHULTZ CALLED ME IN WITH A CONCERN THAT HER PUBLIC PROFILE WAS GOING TO CREATE DANGER FOR HER.
MR. DOWNEY: AND DID YOU THEN GET INVOLVED IN HELPING HER TO LOCATE PERSONAL SECURITY?
JAMES MATTIS: I DID.
MR. DOWNEY: TELL ME WHAT YOU DID.
JAMES MATTIS: MY FORMER CHIEF BODYGUARD, WHO HAD BEEN IN CHARGE OF MY SECURITY FOR ABOUT FIVE YEARS WHEN I WAS A NATO SUPREME ALLIED COMMANDER AND THE COMMANDER OF U.S. CENTRAL COMMAND, WAS RETIRING FROM THE NAVAL CRIMINAL INVESTIGATIVE SERVICE, FULL CAREER, HE HAD COMPLETED SOME -- A COUPLE OF -- I THINK 20 YEARS WITH THEM. HE WAS GOING INTO, YOU KNOW, SOME OTHER JOB THAT HE COULD DO, AND I SAID, THIS IS A GUY I WOULD TRUST.
MR. DOWNEY: AND YOU THOUGHT THAT PROVIDING THAT KIND OF SECURITY FOR HER WAS NECESSARY; CORRECT?
JAMES MATTIS: I, I DEFERRED TO HER. I THOUGHT SHE HAD GOOD JUDGMENT. AND SECRETARY SHULTZ PROBABLY KNEW MORE ABOUT THE CIVILIAN WORLD AND WHAT THE THREATS WERE FOR PEOPLE WHO END UP WITH THEIR PICTURE ON THE FRONT PAGE OF A MAGAZINE, SOMETHING LIKE THAT. I REALLY WASN'T PRIVY TO WHAT KIND OF THREATS SHE MIGHT FACE.
MR. DOWNEY: ALL RIGHT. LET ME ASK YOU TO LOOK IN YOUR NOTEBOOK AT EXHIBIT 10509.
JAMES MATTIS: YES.
MR. DOWNEY: THIS IS AN EMAIL EXCHANGE BETWEEN YOURSELF AND MS. HOLMES; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I WILL MOVE FOR THE ADMISSION OF 10509.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10509 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU LOOK AT THE BOTTOM EMAIL, WHICH IS AN EMAIL FROM YOU TO MS. HOLMES IN JULY OF 2014, I WILL DIRECT YOUR ATTENTION TO THE THIRD PARAGRAPH OF THAT EMAIL. IT REFERENCES GEORGE'S GROWING CONCERN ABOUT YOUR SECURITY WITH THERANOS'S ROLE BECOMING MORE VISIBLE. IS GEORGE IN THAT SENTENCE A REFERENCE TO MR. SHULTZ?
JAMES MATTIS: YES, THAT'S SECRETARY SHULTZ.
MR. DOWNEY: AND SECRETARY SHULTZ IS THE INDIVIDUAL WHO HAD INTRODUCED YOU TO THERANOS; CORRECT?
JAMES MATTIS: TO ELIZABETH, YES.
MR. DOWNEY: AND HE EXPRESSED A CONCERN FOR HER SECURITY TO YOU; CORRECT?
JAMES MATTIS: HE DID. HE AND I WOULD MEET MOST MORNINGS AT STANFORD, AND ON ONE OF THOSE MORNINGS -- ON SEVERAL OF THOSE MORNINGS HE BROUGHT UP THE CONCERN.
MR. DOWNEY: AND THEN WAS AN AUTHORIZATION DISCUSSED AT THE BOARD FOR AN EXPENDITURE TO BE MADE FOR PERSONAL SECURITY FOR MS. HOLMES?
JAMES MATTIS: IF IT WAS NOT, THEN I RECALL IT WAS IN THE OCTOBER BOARD, AND THAT WOULD HAVE BEEN THE FIRST BOARD I WAS ON. AND SO IF IT HAD BEEN BROUGHT UP BY MR. SHULTZ IN THE WAY HE BROUGHT IT UP TO ME IN THE SUMMER, I WOULDN'T HAVE KNOWN.
MR. DOWNEY: AND DO YOU KNOW IF IT WAS DISCUSSED ANY TIME AFTER OCTOBER OF 2013 AT THE BOARD?
JAMES MATTIS: I DON'T RECALL. I DON'T WANT TO SAY IT WAS NOT BROUGHT UP EITHER, BUT I JUST DON'T RECALL IT.
MR. DOWNEY: OKAY. AND DID YOU JOIN ANY COMMITTEES OF THE BOARD WHEN YOU JOINED?
MR. DOWNEY: AND DO YOU RECALL THAT YOU HAD SOME INVOLVEMENT WITH THE COMPENSATION COMMITTEE OF THE BOARD?
JAMES MATTIS: I REMEMBER COMPENSATION BEING DISCUSSED BY THE BOARD ITSELF, YES.
MR. DOWNEY: OKAY. LET ME SHOW YOU AN EXHIBIT IN THE NOTEBOOK THAT IS IN FRONT OF YOU. I BEG YOUR PARDON, YOUR HONOR. MAY I JUST CONFER FOR A MOMENT?
(DISCUSSION AMONGST DEFENSE COUNSEL OFF THE RECORD.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU COULD LOOK AT 10510.
JAMES MATTIS: WHAT'S THE NUMBER AGAIN, SIR?
MR. DOWNEY: 10510.
JAMES MATTIS: OKAY.
MR. DOWNEY: DO YOU SEE THIS IS A SERIES OF EMAIL EXCHANGES BETWEEN YOU AND MS. HOLMES IN FEBRUARY OF 2015?
JAMES MATTIS: OKAY.
MR. DOWNEY: IS THIS, IN FACT, AN EMAIL THAT YOU EXCHANGED WITH HER AT THAT TIME?
JAMES MATTIS: IT LOOKS ACCURATE, YES. I MEAN, IT LOOKS LIKE IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 10510.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 10510 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU LOOK AT THE --
JUDGE DAVILA: AND IT MAY BE PUBLISHED.
BY MR. DOWNEY:
MR. DOWNEY: YOU GOT A PROMOTION. THERE IS AN EMAIL ON FEBRUARY 11TH, AT 8:27 P.M. AND IN THE FIRST BULLET POINT, MS. HOLMES ADDRESSES SOME ISSUES THAT SHE WANTS A COMMITTEE TO THINK ABOUT. DO YOU KNOW WHAT COMMITTEE THAT WAS?
JAMES MATTIS: IT SAYS THE COMPENSATION COMMITTEE.
MR. DOWNEY: OKAY. AND SHE SAYS, "WITH THIS COMMITTEE OWNING THE COMPENSATION COMMITTEE FUNCTION, THE COMMITTEE WILL DETERMINE CEO AND COO COMPENSATION." YOU RECALL THAT THE BOARD DETERMINED THAT; CORRECT?
JAMES MATTIS: THE BOARD DID, YES.
MR. DOWNEY: AND IT SAYS, "TOMORROW, WE WILL REVIEW CEO AND COO COMPENSATION FOR 2014. BOTH SUNNY AND I WANT OUR COMPENSATION FOR 2014 TO BE ENTIRELY IN STOCK OPTIONS IN THE COMPANY." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU RECALL HER TELLING YOU THAT?
JAMES MATTIS: NO, I DON'T. I'M SURE IT HAPPENED. IT'S RIGHT THERE.
MR. DOWNEY: OKAY. AND DO YOU KNOW IF HER COMPENSATION WAS, IN FACT, REDUCED ENTIRELY TO STOCK IN THE COMPANY?
JAMES MATTIS: I DON'T KNOW IF THAT'S A REDUCTION OR NOT. I ASSUME IF THAT'S WHAT HAPPENED --
MR. DOWNEY: FAIR ENOUGH. LET ME ASK IT DIFFERENTLY. DO YOU KNOW IF SHE RECEIVED ALL OF HER COMPENSATION IN STOCK OPTIONS IN 2014?
JAMES MATTIS: THAT SOUNDS VERY FAMILIAR, YES.
MR. DOWNEY: AND THAT ATTITUDE WAS SIMILAR TO AN ATTITUDE THAT YOU HAD, I THINK, AT THE BEGINNING OF YOUR SERVICE? YOU DIDN'T HAVE TO RECEIVE A SALARY; CORRECT?
JAMES MATTIS: AT THAT TIME I THOUGHT SHE HAD STRONG BELIEF IN HER COMPANY AND WAS WILLING TO MAKE THAT SORT OF A DECISION, OR A RECOMMENDATION.
MR. DOWNEY: I WANT TO ASK YOU SOME QUESTIONS ABOUT YOUR UNDERSTANDING ABOUT THE ABILITIES OF THERANOS'S TECHNOLOGY AT VARIOUS POINTS IN TIME. YOU MENTIONED WHEN YOU WERE ON DIRECT EXAMINATION THAT MS. HOLMES CAME AND GAVE YOU A DEMONSTRATION, AND I THINK YOU SAID IT WAS BACKSTAGE AT THE MARINE MEMORIAL HALL; IS THAT RIGHT?
JAMES MATTIS: I'M NOT SURE. I THINK THAT'S WHERE IT WAS. I WAS GIVING A SPEECH THAT NIGHT IN SAN FRANCISCO ON MY WAY TO THE PACIFIC, AND WE JUST STOPPED IN HERE LONG ENOUGH TO DO THE SPEECH FOR SECRETARY SHULTZ. AND IT MAY HAVE BEEN -- IT MAY HAVE BEEN SOMEWHERE ELSE, THOUGH. IT MAY HAVE BEEN AT HIS HOME. I THINK THERE WAS A DINNER AFTER THE SPEECH. I JUST DON'T -- I JUST CAN'T PLACE IT.
MR. DOWNEY: OKAY. DO YOU KNOW HOW MANY TESTS THE BOX COULD PERFORM, OR MS. HOLMES REPRESENTED THE BOX COULD PERFORM AT THAT TIME?
MR. DOWNEY: DO YOU RECALL THAT SHE SAID THAT THE GOAL WAS FOR THE BOX TO BE ABLE TO PERFORM A COMPLETE SET OF RESULTS A PHYSICAL LABORATORY COULD PERFORM, BUT THE BOX WAS NOT ABLE TO PERFORM THAT MANY TESTS AT THE TIME OF THE MEETING?
JAMES MATTIS: NO, I DON'T RECALL THAT. BUT I KNEW IT WAS COMING ONLINE, SO I DON'T THINK -- WHEN SHE SAID THAT SHE WAS READY DURING THAT CONVERSATION TO DEPLOY IT, A COMPARISON, I THOUGHT IT WAS GOOD ENOUGH TO PUT IN THE FIELD.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 11200 IN YOUR NOTEBOOK, AND I'LL DIRECT YOU TO THE LAST SENTENCE OF THE THIRD PARAGRAPH.
JAMES MATTIS: RIGHT.
MR. DOWNEY: JUST TAKE A MOMENT TO REVIEW THE TWO FINAL SENTENCES --
JAMES MATTIS: RIGHT.
MR. DOWNEY: -- OF THAT PARAGRAPH. DO YOU SEE THAT?
JAMES MATTIS: RIGHT. YES.
MR. DOWNEY: AND DOES THAT REFRESH YOUR RECOLLECTION THAT YOU WERE TOLD AT THAT TIME THAT THE BOX WAS NOT ABLE TO PERFORM THAT MANY TESTS?
JAMES MATTIS: WHAT SHE ALLUDED TO -- WHAT SHE SAID WAS THAT SHE COULD DEPLOY IT AND PROVE THAT IT COULD DO THIS AT THAT TIME, AND I WENT BACK WITH THAT UNDERSTANDING.
MR. DOWNEY: OKAY. AND YOU UNDERSTOOD THAT WITH RESPECT TO THE TECHNOLOGY -- WELL, LET ME STRIKE THAT. YOU UNDERSTOOD THAT IN ADDITION TO THE DEVICE, THERE HAD TO BE ASSAYS THAT COULD RUN ON THE DEVICE; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: OKAY. AND AT THAT TIME, DID YOU KNOW HOW MANY ASSAYS HAD BEEN DEVELOPED FOR THE DEVICE?
JAMES MATTIS: I ASSUMED FROM WHAT SHE WAS SAYING IT WAS A SUFFICIENT NUMBER TO MAKE IT WORTHWHILE TO DEPLOY.
MR. DOWNEY: OKAY. BUT YOU DIDN'T HAVE A SPECIFIC UNDERSTANDING OF THAT, DID YOU?
JAMES MATTIS: NO. IT WAS READY TO GO HEAD TO HEAD AGAINST WHAT WE WERE DOING THEN --
MR. DOWNEY: OKAY.
JAMES MATTIS: -- IS WHAT I ASSUMED.
MR. DOWNEY: OKAY. AND LATER WHEN YOU JOINED THE BOARD, THAT WAS AROUND THE TIME OF THE WALGREENS LAUNCH; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT PAGE 3 OF THE SAME DOCUMENT, 11200. I'M DIRECTING YOUR ATTENTION TO REVIEW THE FIFTH FULL PARAGRAPH OF THAT DOCUMENT.
JAMES MATTIS: IT STARTS WITH, "WHEN GENERAL MATTIS"?
MR. DOWNEY: YES. JUST READ IT TO YOURSELF.
JAMES MATTIS: YEAH, OKAY. I'VE READ IT.
MR. DOWNEY: IS IT ACCURATE THAT WHEN YOU JOINED THE BOARD YOU LEARNED ABOUT THE GOAL OF THE NUMBER OF TESTS THAT THE MACHINE COULD RUN?
JAMES MATTIS: YEAH, 2,000.
MR. DOWNEY: AND IS IT ACCURATE THAT DURING BOARD MEETINGS YOU WOULD BE SHOWN TESTS THAT COULD TELL ACTIONABLE EARLY DETECTION OF MEDICAL PROBLEMS? I'M ASKING, DID YOU LOOK AT PARTICULAR TESTS?
JAMES MATTIS: EXCUSE ME. GO AHEAD.
MR. DOWNEY: YEAH. DID YOU LOOK AT PARTICULAR TESTS FOR WHICH THE DEVICE COULD BE USED?
JAMES MATTIS: THERE WAS SOME DISCUSSION ABOUT PARTICULAR TESTS, BUT THE PREDICTIVE CAPABILITY SHOWED A VERY BROAD ABILITY TO FORECAST ILLNESS IF WE CAN GET ENOUGH RESULTS.
MR. DOWNEY: AND THAT WAS BY COMPILING DATA FROM THE RESULTS OF THOSE DEVICES; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND DID YOU UNDERSTAND AT THE TIME THAT YOU JOINED THE BOARD THAT THE MACHINE COULD RUN A LIMITED NUMBER OF TESTS AT THAT TIME?
JAMES MATTIS: I WOULD JUST SAY THAT LIMITED WAS NOT -- I WAS STILL COMING FROM THE IDEA THAT WE WERE GOING TO PUT IT IN THE FIELD AND HAVE IT RUN AGAINST WHAT WE WERE ALREADY DOING. I ASSUMED IT WAS MORE THAN A HANDFUL OF TESTS, OBVIOUSLY, OR IT WOULD HAVE BEEN WORTHLESS TO US.
MR. DOWNEY: AND THERE ARE -- YOU UNDERSTAND AS A RESULT OF YOUR BOARD SERVICE NOW THAT THERE ARE MANY DIFFERENT PROCESSES INVOLVED IN DEVELOPING THESE PARTICULAR ASSAYS; CORRECT?
JAMES MATTIS: AND GETTING IT CERTIFIED, YES.
MR. DOWNEY: AND GETTING IT CERTIFIED FOR USE OUTSIDE OF A CLINICAL LAB; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: BECAUSE THAT WOULD REQUIRE FDA APPROVAL; RIGHT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: IS IT TRUE THAT AT SOME POINT WHEN YOU WERE IN CONVERSATION WITH MS. HOLMES EARLY IN YOUR BOARD SERVICE THAT YOU EXPRESSED THAT YOU KNEW THE DEVICE WAS NOT FULLY MATURE?
JAMES MATTIS: YES. IT WAS COMING ONLINE, BUT THAT IT WAS MATURE ENOUGH TO GO COMMERCIAL, BUT WE HAD TO KEEP GROWING IT. WE HAD A DISCUSSION GOING OVER TO NEWARK WHERE SHE AND I WERE IN THE CAR GOING OVER TO LOOK AT THE FACILITY WHERE WE BUILT THE MACHINES.
MR. DOWNEY: AND THAT WAS A MANUFACTURING FACILITY; CORRECT?
JAMES MATTIS: YES. EXCUSE ME, YES.
MR. DOWNEY: AND THAT ARE FOR THE PURPOSE OF PRODUCING THE MACHINES?
JAMES MATTIS: YES, BUT THE DISCUSSION THERE ACTUALLY TOUCHED ON WHAT YOU WERE TALKING ABOUT. I JUST REMEMBERED ONE OF THOSE.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT EXHIBIT 4196. I BEG YOUR PARDON, SECRETARY. THIS IS ACTUALLY IN THE WHITE NOTEBOOK THAT MR. BOSTIC GAVE YOU.
JUDGE DAVILA: 4196?
MR. DOWNEY: 4196.
JUDGE DAVILA: I THINK IT'S IN YOURS AS WELL.
MR. DOWNEY: BOTH PLACES.
COURT CLERK: IT IS ADMITTED, YOUR HONOR.
JUDGE DAVILA: YES.
JAMES MATTIS: IS THIS THE EMAIL SENT ON SEPTEMBER 14TH?
MR. DOWNEY: IT IS. IT IS.
JAMES MATTIS: YEAH, I'VE GOT IT.
MR. DOWNEY: IS IT ALL RIGHT TO PUBLISH THIS, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. I WANT TO DIRECT YOUR ATTENTION TO THIS EMAIL THAT YOU DISCUSSED WITH MR. BOSTIC. DO YOU SEE THE SECOND BULLET POINT WHICH BEGINS, "HOW OUR TECHNOLOGY WORKS"?
JAMES MATTIS: RIGHT. CORRECT.
MR. DOWNEY: AND MS. HOLMES WAS TELLING YOU IN CONNECTION WITH THIS EMAIL THAT YOU MAY BE ASKED THE QUESTION OF WHETHER THERE'S A SINGLE DEVICE THAT DOES ALL OF THE TESTS THAT THERANOS IS OFFERING; RIGHT?
JAMES MATTIS: CORRECT.
MR. DOWNEY: AND HER ADVICE TO YOU WAS TO TELL HIM THAT YOU DON'T TALK ABOUT THAT ON THE RECORD?
JAMES MATTIS: RIGHT.
MR. DOWNEY: OKAY.
JAMES MATTIS: DID YOU SAY ON THE RECORD?
MR. DOWNEY: ON THE RECORD?
JAMES MATTIS: ON OR OFF THE RECORD, WE DON'T DISCUSS THAT.
MR. DOWNEY: DON'T TALK ABOUT IT AT ALL?
JAMES MATTIS: YEAH.
MR. DOWNEY: I WANT TO ASK YOU ABOUT THE "FORTUNE" ARTICLE THAT MR. BOSTIC SHOWED YOU, THE ROGER PARLOFF ARTICLE. DO YOU RECALL LOOKING AT THAT WITH MR. BOSTIC?
JAMES MATTIS: YES.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT THAT BACK AT EXHIBIT 1776. AND I BELIEVE YOU TESTIFIED THAT YOU REVIEWED THIS ARTICLE WHEN IT WAS PUBLISHED. CORRECT?
JAMES MATTIS: I READ IT. I READ IT AT THAT TIME, YES.
MR. DOWNEY: AND I JUST WANT TO ASK YOU ABOUT SOME OF THE REFERENCES IN THE ARTICLE, AND I'D ASK YOU TO LOOK AT PAGE 8 IN THE EXHIBIT IF YOU SEE THAT NUMBERING IN THE BOTTOM CENTER.
JAMES MATTIS: YES.
MR. DOWNEY: ABOUT HALFWAY DOWN THE PAGE IT BEGINS, "AT LEAST AS SIGNIFICANT, THREE HOSPITAL GROUPS ARE NOW WORKING CLOSELY WITH THERANOS WITH THE AIM OF DEPLOYING ITS LAB SERVICES," AND IT REFERS TO UCSF MEDICAL CENTER, WHICH OF COURSE IS FAMILIAR TO YOU; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DIGNITY HEALTH; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND INTERMOUNTAIN HEALTH CARE; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND YOU WERE AWARE WHEN YOU WERE ON THE BOARD THAT THERANOS WAS WORKING WITH THOSE COMPANIES, WITH THOSE INSTITUTIONS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND YOU ALSO LEARNED THAT THEY DID DUE DILIGENCE OF THERANOS IN CONNECTION WITH ENTERING INTO AGREEMENTS WITH THERANOS FOR PARTNERSHIPS; CORRECT?
JAMES MATTIS: I ASSUMED THEY HAD, YES.
MR. DOWNEY: AND WAS THAT COMFORTING TO YOU AS A THIRD PARTY VALIDATION?
JAMES MATTIS: I THINK THE MORE CREDIBLE HEALTH ORGANIZATIONS REVIEWED IT AND SAID IT WAS GOOD TO GO WAS VERY HELPFUL.
MR. DOWNEY: AND YOU SEE THERE THAT THERE IS A QUOTATION FROM THE CEO OF UCSF, AND DID YOU RECOGNIZE THAT NAME, MARK LARET?
JAMES MATTIS: I'VE HEARD IT. I DON'T KNOW THE MAN.
MR. DOWNEY: THAT'S ALL FOR THAT EXHIBIT. I WANT TO ASK YOU A FEW QUESTIONS ABOUT THE TOPIC YOU ADDRESSED WITH MR. BOSTIC CONCERNING THE DEPARTMENT OF DEFENSE AND YOUR TIME AT CENTCOM.
JAMES MATTIS: UH-HUH.
MR. DOWNEY: YOU ALREADY TESTIFIED THAT YOU MET MS. HOLMES IN 2011, AND THEN I THINK WE SAW YOU HAD A SERIES OF CONVERSATIONS WITH HER IN -- THROUGHOUT 2012 ABOUT DEPLOYING THERANOS'S TECHNOLOGY.
JAMES MATTIS: MOSTLY EMAIL CONVERSATIONS, NOT IN PERSON, YES.
MR. DOWNEY: WELL, ALMOST EXCLUSIVELY EMAIL; CORRECT? YOU ONLY HAD ONE IN PERSON?
JAMES MATTIS: I THINK SO, YEAH.
MR. DOWNEY: OKAY. AND BEFORE THAT COULD BE DONE, WAS THERE A REQUIREMENT THAT THERANOS BE GRANTED AN LOE?
JAMES MATTIS: FOR ME TO TALK TO HER?
MR. DOWNEY: NO. FOR, FOR THE MILITARY TO ACTUALLY RUN SUCH A -- THE PROGRAM ALONG THE LINES THAT YOU WERE IMAGINING.
JAMES MATTIS: AN LOE IS A LIMITED OBJECTIVE EXPERIMENT SIDE-BY-SIDE COMPARISON PILOT PROJECT. I WANTED SOMETHING THAT WOULD ALLOW ME TO KNOW, IS THIS SOMETHING WORTHY? BECAUSE AT THAT JOB I COULD PICK UP THE PHONE AND CALL THE CHAIRMAN OF THE JOINT CHIEFS AND THE SECRETARY OF DEFENSE AND SAY I FOUND SOMETHING THAT WAS GOING TO HELP US, IF I WAS ASSURED THAT IT COULD DO IT. SO I NEEDED MORE THAN TALKING TO SOMEONE. I NEEDED IT TO DELIVER. SO THAT'S WHEN I GOT MY COMMAND SURGEON AND JUDGE ADVOCATE GENERAL TO MAKE CERTAIN LEGAL AND ETHICAL, LEGAL REGULATORY STUFF, AND THEN THE MEDICAL AND ETHICAL REGULATORY STUFF RIGHT BECAUSE IT'S A VERY CONTROLLED ASPECT OF THE MILITARY, THE MEDICAL PART.
MR. DOWNEY: DO YOU KNOW WHETHER THERANOS EVER ENTERED INTO A LIMITED OBJECTIVE EXPERIMENT AGREEMENT WITH CENTCOM?
JAMES MATTIS: THEY DID NOT WHILE I WAS THE COMMANDER, AND I AM NOT AWARE OF IT SINCE I LEFT COMMAND.
MR. DOWNEY: AND THE PERSON WHO YOU HAD DESIGNATED YOUR CHIEF SURGEON IS A COLONEL AARON EDGAR; IS THAT CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND HE, IN TURN, DELEGATED RESPONSIBILITY TO A NUMBER OF PEOPLE TO COMMUNICATE WITH THERANOS; CORRECT?
JAMES MATTIS: THERE WERE DIFFERENT ASPECTS THAT HAD TO BE CHECKED OUT. AND, YES, HE WOULD HAVE HAD DIFFERENT EXPERTS ON THAT. JUST TO BE CLEAR, MY CHIEF OF STAFF WOULD HAVE BEEN MAJOR GENERAL HORST, U.S. ARMY, WOULD HAVE BEEN THE PERSON OVERSEEING THIS. I WAS MOST OF THE TIME IN THE MIDDLE EAST, SO HE RUNS THE STAFF IN MY ABSENCE.
MR. DOWNEY: DO YOU KNOW WHETHER ANY MILITARY PERSONNEL WITH CLINICAL LAB EXPERTISE WENT TO THERANOS TO LOOK AT THE TECHNOLOGY?
JAMES MATTIS: I'M NOT AWARE OF THOSE KINDS OF DETAILS. THEY NORMALLY WOULD BE BRIEFED TO ME.
MR. DOWNEY: YOU DON'T RECALL HEARING THAT?
MR. DOWNEY: I WANT TO SHOW YOU JUST IN YOUR NOTEBOOK EXHIBIT 10547 FOR PUBLICATION.
JAMES MATTIS: YES.
MR. DOWNEY: YOU'RE NOT ON THE EMAIL THAT IS THE FIRST PAGE OF 10457, AND I JUST WANT TO ASK YOU IF YOU HAVE EVER SEEN OR BEEN AWARE OF THE DOCUMENT THAT IS ATTACHED TO 10457.
JAMES MATTIS: I DON'T RECALL EVER SEEING THIS, NO.
MR. DOWNEY: AND YOU DON'T RECALL HEARING THAT AN LOE AGREEMENT WAS ENTERED INTO?
JAMES MATTIS: I MAY HAVE BEEN TOLD -- WE HAD A FEW OTHER THINGS GOING ON IN THE MIDDLE EAST AT THIS POINT.
MR. DOWNEY: THAT'S FAIR ENOUGH.
(LAUGHTER.)
JAMES MATTIS: YEAH, SO I -- I'M NOT TRYING TO MAKE LIGHT OF IT. IT'S JUST THAT THIS IS SOMETHING THAT MY CHIEF OF STAFF KNOWING THAT I WANTED TO SEE IF THIS WOULD WORK AND SO IT WAS KIND OF IN HIS HANDS. IT WOULDN'T NORMALLY BE BRIEFED TO ME.
BY MR. DOWNEY:
MR. DOWNEY: OKAY. DO YOU RECALL THAT THERE WERE SUBSTANTIAL DELAYS IN THE DISCUSSIONS BETWEEN THERANOS AND REPRESENTATIVES OF DOD?
JAMES MATTIS: I DO. IT WAS FRUSTRATING TO ME.
MR. DOWNEY: AND DO YOU RECALL THERE WAS A LOT OF DIALOGUE ABOUT THE REGULATORY STRUCTURE THAT WOULD HAVE TO BE USED --
JAMES MATTIS: EXACTLY.
MR. DOWNEY: -- TO DEPLOY THE DEVICE? ALL RIGHT. I WANT TO MOVE TO THE TOPIC OF A COMPARISON TEST ALONG THE LINES THAT YOU DESCRIBED. AND THAT WAS SOMETHING THAT YOU HAD WANTED TO SEE DONE WHEN YOU WERE IN THE MILITARY; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND THEN WHEN QUESTIONS AROSE IN 2015 ABOUT THERANOS'S TECHNOLOGY, YOU WANTED TO SEE IF SUCH A COMPARISON TEST COULD BE RUN AGAIN; CORRECT?
JAMES MATTIS: I WANTED TO DO SOMETHING THAT WOULD DEMONSTRATE THAT THE EDISON WORKED AND LIVED UP TO ITS -- WHAT WE HAD BEEN SAYING ABOUT IT.
MR. DOWNEY: AND DO YOU RECALL LOOKING WITH MR. BOSTIC ABOUT THE BOARD DIALOGUE BETWEEN MS. KOVACEVICH -- MR. KOVACEVICH AND MS. HOLMES? DO YOU RECALL LOOKING AT THAT EMAIL EXCHANGE EARLIER?
JAMES MATTIS: YES.
MR. DOWNEY: AND YOU TESTIFIED THAT YOU WERE SURPRISED ABOUT WHAT MS. HOLMES SAID IN THAT EMAIL?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU KNOW IF YOU RESPONDED TO THAT EMAIL?
JAMES MATTIS: DID -- PARDON?
MR. DOWNEY: DO YOU KNOW IF YOU RESPONDED TO THE EMAIL?
JAMES MATTIS: NO. I SPOKE WITH MS. HOLMES, I'M NOT SURE WHEN, BUT WE TALKED ABOUT IT ON THE PHONE.
MR. DOWNEY: ALL RIGHT. LET ME ASK YOU TO LOOK AT EXHIBIT 10506. IS THIS A SERIES OF EMAIL EXCHANGES BETWEEN YOURSELF AND MS. HOLMES AND OTHERS IN OCTOBER OF 2015?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 10506.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10506 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU GO TO THE SECOND PAGE OF THAT EXHIBIT -- SORRY, THE THIRD PAGE, AND YOU LOOK IN THE MIDDLE. AND YOU SEE THAT'S THE EMAIL FROM MS. HOLMES THAT WE WERE LOOKING AT EARLIER; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: NOW, LET ME DIRECT YOUR ATTENTION TO THE TOP EMAIL ON THE FIRST PAGE OF 10506, WHICH IS FROM YOU TO MS. HOLMES AND OTHERS; CORRECT?
JAMES MATTIS: YEAH.
MR. DOWNEY: AND DAVID BOIES IS COPIED; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND HE WAS A BOARD MEMBER; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND HE WAS ALSO AN ATTORNEY FOR THE COMPANY; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ALSO H. KING IS COPIED. THAT'S HEATHER KING; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND SHE WAS GENERAL COUNSEL OF THE COMPANY?
JAMES MATTIS: YES.
MR. DOWNEY: AND WHO WAS RILEY BECHTEL?
JAMES MATTIS: ANOTHER MEMBER OF THE BOARD.
MR. DOWNEY: AND YOU BEGIN YOUR RESPONSE SAYING, "MY APOLOGIES FOR BEING LATE COMING ONLINE. I KNOW THE MANAGEMENT TEAM IS MOVING IN REAL TIME TO ADDRESS THE POINTS RAISED IN THE ARTICLE AND TO COUNTER THEM BEFORE THEIR REPETITION BECOMES ACCEPTED URBAN MYTH." FIRST OF ALL, IS THE ARTICLE THAT YOU REFER TO THERE "THE WALL STREET JOURNAL" ARTICLE THAT YOU WERE DISCUSSING WITH MR. BOSTIC?
JAMES MATTIS: YES, AND YOU'LL SEE IT LATER IN THE EMAIL CHAIN.
MR. DOWNEY: AND IF YOU LOOK AT THE THIRD PARAGRAPH YOU WRITE, "I'LL BE OFFLINE FOR MUCH OF THE NEXT 24 HOURS, AND I'M TRYING TO CLOSE OUT MY WORK ASAP SO I CAN FLY BACK EARLY FROM THE MID-EAST. WILL KEEP YOU POSTED, BUT PLEASE KNOW THAT MY SILENCE IS DUE TO LACK OF CONNECTIVITY, FOR I HAVE FULL FAITH IN OUR PLAN AND THE OUTCOME AS WE EXECUTE IT RAPIDLY, THOROUGHLY, RAPIDLY (X2) AND IN AN ANTICIPATORY MODE FOR THE FOLLOW-ON ATTACKS WE KNOW ARE COMING..." AND YOU WERE IN THE MIDDLE EAST AT THE TIME?
JAMES MATTIS: I WAS.
MR. DOWNEY: DO YOU KNOW HOW LONG -- HOW MUCH LATER IT WAS THAT YOU RETURNED TO THE U.S. FROM THAT TRIP?
JAMES MATTIS: NO, I CAN'T RECALL. IT SHOULDN'T HAVE BEEN TOO LONG, BUT I CAN'T GIVE YOU A GOOD TIMELINE.
MR. DOWNEY: AND DO YOU RECALL IN THE DAYS THAT FOLLOWED THERE WAS MORE MEDIA THAT WAS CRITICAL OF THERANOS?
JAMES MATTIS: I ASSUMED THERE WOULD BE JUST FROM WHAT I HAD READ. I -- IT'S, IT'S, UM -- YOU KNOW, IT'S SIX YEARS AGO NEARLY. I DON'T RECALL.
MR. DOWNEY: DO YOU RECALL A DISCUSSION AT THE BOARD OF ISSUING A STATEMENT ABOUT THE SITUATION?
JAMES MATTIS: YES. YES.
MR. DOWNEY: AND A DRAFT STATEMENT WAS SHARED WITH THE BOARD; CORRECT?
JAMES MATTIS: IT WAS, YES.
MR. DOWNEY: LET ME SHOW YOU THAT. IF YOU WITH BRING UP -- I'M SORRY. IF YOU COULD LOOK AT 10523. I WILL DIRECT YOU TO THE BEGINNING OF THE FOURTH PAGE OF THE EXHIBIT.
JAMES MATTIS: YES.
MR. DOWNEY: IS THIS A STATEMENT THAT THE BOARD OF DIRECTORS ISSUED IN RESPONSE TO "THE WALL STREET JOURNAL" ARTICLE AND FOLLOW-UP MEDIA?
JAMES MATTIS: THAT THIS IS A STATEMENT THAT AT THE TOP OF THE PAGE, THOSE TWO PARAGRAPHS?
MR. DOWNEY: YES.
JAMES MATTIS: YEAH, I MEAN, IT LOOKS FAMILIAR. I'M NOT SURE. THERE WERE SEVERAL VERSIONS WHEN WE DID SOMETHING LIKE THIS, AND I CAN'T TELL YOU IF THIS WAS THE FINAL VERSION. IT LOOKS LIKE IT, BUT I --
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK FIRST AND GET ORIENTED A LITTLE BIT. FIRST OF ALL, IS THIS A SERIES OF EMAIL EXCHANGES THAT CULMINATE WITH EMAIL EXCHANGES BETWEEN YOU AND MS. HOLMES?
JAMES MATTIS: UH-HUH.
MR. DOWNEY: DO YOU SEE THAT ON THE FIRST PAGE?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 10523.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10523 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU LOOK AT THE MIDDLE OF PAGE 2, THERE'S AN EMAIL ADDRESS THAT ORIGINATES FROM THERANOS AND IT'S "FOR OUR SHAREHOLDERS." IT'S SENT ON NOVEMBER THE 1ST. IT'S ADDRESSED TO SHAREHOLDERS OF THE COMPANY, AND THERE'S A VERY LONG STATEMENT. DO YOU SEE THAT?
JAMES MATTIS: I DO.
MR. DOWNEY: AND THEN THE STATEMENT ON THE TOP OF PAGE 4 OF THE EXHIBIT IS LABELLED AS A STATEMENT BY THE THERANOS BOARD OF DIRECTORS AND COUNSELORS; CORRECT?
JAMES MATTIS: UH-HUH, YES.
MR. DOWNEY: AND DID THE BOARD AUTHORIZE THE COMPANY TO MAKE THAT STATEMENT AT THE TIME?
JAMES MATTIS: IF THIS IS THE FINAL VERSION, YES.
MR. DOWNEY: ALL RIGHT. AND AT THE SAME TIME THAT THE COMPANY WAS REACTING TO THE MEDIA, THERE WAS AN INTERNAL DISCUSSION AT THE BOARD, WAS THERE NOT, ABOUT WHAT THE RIGHT REACTION FOR THE COMPANY SHOULD BE TO THE CRITICISMS THAT HAD ARISEN?
JAMES MATTIS: YES.
MR. DOWNEY: AND THERE WERE SEVERAL DIFFERENT SUGGESTIONS PUT FORWARD AS TO HOW THE COMPANY MIGHT RESPOND; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND MS. HOLMES TALKED TO YOU ABOUT THAT ISSUE; CORRECT?
JAMES MATTIS: WE DID. THERE WERE A LOT OF DISCUSSIONS DURING THIS PERIOD WITH MEMBERS OF THE BOARD AND MS. HOLMES.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT 10523 AGAIN, WHICH IS ALREADY IN EVIDENCE, AND I'M DIRECTING YOUR ATTENTION TO THE COMMUNICATION WITH MS. HOLMES THAT BEGINS AT THE BOTTOM OF PAGE 1 AND CARRIES OVER TO PAGE 2.
JAMES MATTIS: YES.
MR. DOWNEY: AND THIS IS AN EMAIL FROM MS. HOLMES TO THE BOARD; CORRECT?
JAMES MATTIS: IT IS, YES.
MR. DOWNEY: AND IF YOU LOOK AT THE TOP NUMBERED PARAGRAPHS ON PAGE 2, SHE LAYS OUT POTENTIAL STEPS THE COMPANY MIGHT TAKE TO RESPOND TO THE CRITICISM; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ONE OF THE STEPS WAS PUBLISHING DATA ON THE COMPANY'S ASSAYS; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND ONE WAS PUBLISHING INFORMATION ABOUT ITS CLINICAL LABORATORY PERFORMANCE; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND ONE WAS PUBLISHING DATA THAT THEY HAD ALREADY SUBMITTED TO THE FDA; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: NOW, YOU UNDERSTOOD THAT THE COMPANY HAD ALREADY SUBMITTED A LARGE NUMBER OF APPLICATIONS TO THE FDA FOR THE APPROVAL OF ITS ASSAYS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DID YOU KNOW THAT IN CONNECTION WITH THOSE SUBMISSIONS IT HAD SUBMITTED EXTENSIVE DATA ABOUT THE PERFORMANCE OF ITS ASSAYS?
JAMES MATTIS: I ASSUMED THAT WAS PART OF IT, YES.
MR. DOWNEY: AND DO YOU RECALL DELIBERATIONS IN THE BOARD AS TO WHETHER OR NOT THAT DATA SHOULD BE RELEASED?
JAMES MATTIS: VAGUELY, YES.
MR. DOWNEY: THE FOURTH SUGGESTION IS THAT THE COMPANY WORK WITH CENTERS OF EXCELLENCE, AND THE FIFTH WAS TO INVITE PEOPLE TO THERANOS TO DO A FINGERSTICK DEMONSTRATION AND A VENOUS BLOOD DRAW AT THE SAME TIME AND SEE VARIANCE IN DATA, WHETHER THERE WERE VARIANCES IN DATA; CORRECT?
JAMES MATTIS: UH-HUH.
MR. DOWNEY: ALL RIGHT. AND HOW DID YOU REACT TO THE SUGGESTIONS OF THOSE STEPS?
JAMES MATTIS: I THOUGHT IT WAS A STEP IN THE RIGHT DIRECTION. IT WAS TIME TO STAND AND DELIVER.
MR. DOWNEY: AND IS THE EMAIL IN THE MIDDLE OF PAGE 1 WHERE YOU SAY -- YOU WRITE TO MS. HOLMES AND SAY "THIS IS A STRONG PACKAGE." IS THAT A REFERENCE TO WHAT SHE HAS OUTLINED, THE FIVE STEPS SHE OUTLINED IN HER EMAIL?
JAMES MATTIS: IT IS. AGAIN, IT GOES BACK TO MY EARLIEST TIME THAT, YOU KNOW, DEMONSTRATE WHAT IT CAN DO.
MR. DOWNEY: NOW, YOU MENTIONED THAT WHILE YOU WERE AT THE COMPANY YOU THOUGHT THAT THE COMPANY WAS SOMEWHAT DATA DRIVEN. YOU WERE SHOWN A LOT OF DATA IN BOARD MEETINGS; CORRECT?
JAMES MATTIS: I WOULDN'T CALL IT DATA DRIVEN. WE WERE SHOWN A LOT OF DATA THOUGH, YES.
MR. DOWNEY: AND AMONG THE DATA THAT YOU WERE SHOWN AT BOARD MEETINGS WAS ACTUALLY THERANOS'S PERFORMANCE IN COMPARATIVE STUDIES OF ITS RESULTS TO VENOUS DRAWS. DO YOU RECALL THAT?
JAMES MATTIS: YES.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 11172. I BEG YOUR PARDON. LET ME CORRECT THAT. YOU WERE NOT ABLE TO FIND THAT?
JAMES MATTIS: YEAH.
MR. DOWNEY: I BEG YOUR PARDON. YOUR HONOR, MAY I HAVE JUST ONE MOMENT? I BEG YOUR PARDON, GENERAL. IT'S 1172, 1172. AND I'D ASK YOU TO LOOK AT PAGE -- THIS WAS PREVIOUSLY ADMITTED, YOUR HONOR.
JAMES MATTIS: I DON'T THINK I -- WHAT WAS THE NUMBER AGAIN, SIR?
MR. DOWNEY: 1172.
JUDGE DAVILA: IT'S NOT IN YOUR BINDER I THINK.
MR. DOWNEY: I BEG YOUR PARDON.
MR. DOWNEY: ARE YOU LOOKING AT THE WHITE BINDER OR THE BLACK BINDER?
JAMES MATTIS: OH, BLACK BINDER.
MR. DOWNEY: I THOUGHT IT WAS. LET ME MOVE ON FROM THAT AND WE CAN COME BACK TO THAT. NOW, DID DISCUSSIONS CONTINUE -- YOU REMAINED ON THE BOARD OF THERANOS AFTER THIS CONTROVERSY AROSE IN THE FALL OF 2015; CORRECT?
JAMES MATTIS: YES, 2015. I REMAINED ON INTO 2016, YES.
MR. DOWNEY: OKAY. TOWARDS THE END OF 2016 YOU RESIGNED?
JAMES MATTIS: YES.
MR. DOWNEY: AND THERE WERE A LOT OF DISCUSSIONS ABOUT HOW TO CARRY OUT THE STEPS THAT MS. HOLMES HAD OUTLINED THROUGHOUT THAT YEAR; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND ONE OF THE STEPS THAT SHE HAD OUTLINED WAS THERANOS COULD PUBLISH DATA ABOUT THE PERFORMANCE OF ITS ASSAYS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU RECALL THAT MS. HOLMES GAVE A PRESENTATION TO THE AMERICAN ASSOCIATION OF CLINICAL CHEMISTRY IN 2016 AND THAT THERANOS PUBLISHED A LOT OF ITS DATA IN CONNECTION WITH THAT PRESENTATION?
JAMES MATTIS: IS THIS THE BRIEFING IN I THINK IT'S MARCH TO MAY TIMEFRAME? DOES THAT SOUND RIGHT?
MR. DOWNEY: NO. THIS IS A LITTLE LATER IN THE YEAR. THIS IS A PRESENTATION BY MS. HOLMES TO A PROFESSIONAL GROUP?
JAMES MATTIS: I VAGUELY RECALL IT, BUT I CAN'T RECALL MUCH MORE THAN THAT IT HAPPENED.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 7673. AND I'LL ONLY ASK YOU TO LOOK AT THE FIRST PAGE. IS THIS A DOCUMENT THAT YOU SAW IN CONNECTION WITH BOARD MEETINGS AT THERANOS?
JAMES MATTIS: I DON'T RECALL THIS.
MR. DOWNEY: OKAY. YOU CAN PUT THAT ASIDE. NOW THE OTHER -- ONE OF THE OTHER STEPS THAT YOU HAD DONE -- THAT THE BOARD HAD SUGGESTED WAS SOME FORM OF COMPARATIVE STUDY BE DONE; IS THAT CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU RECALL THAT THERANOS ARRANGED WITH UCSF FOR A COMPARATIVE STUDY OF ITS TESTS TO BE DONE?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU RECALL WHAT THE RESULTS OF THAT COMPARISON WERE?
JAMES MATTIS: NO, I DO NOT.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7717. DO YOU RECOGNIZE THIS DOCUMENT?
JAMES MATTIS: THIS IS THE FIRST TIME THAT I THINK I'VE SEEN IT.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT PAGE 1. ACTUALLY, IT'S THE FOURTH PAGE OF THE EXHIBIT, BUT IT'S LABELLED PAGE 1.
JAMES MATTIS: UH-HUH.
MR. DOWNEY: WITHOUT REGARD TO ANY DOCUMENT, DO YOU RECALL THAT A STUDY WAS UNDERTAKEN TO EVALUATE THERANOS'S ANALYTICAL PERFORMANCE COMPARED TO OTHER LABORATORY SYSTEMS?
JAMES MATTIS: I KNOW WE HAD PUSHED FOR IT AND I KNOW THAT THERE WERE EFFORTS UNDERWAY TO MAKE IT HAPPEN. I DON'T RECALL THIS, BUT IT MAY BE -- WHAT -- IS THIS IN LATE 2017?
MR. DOWNEY: I THINK THE DATE OF THIS DOCUMENT IS IN 2017, YES.
JAMES MATTIS: IS WHEN?
MR. DOWNEY: IS IN 2017.
JAMES MATTIS: IS IT IN LATE 2017?
MR. DOWNEY: I BELIEVE IT IS. ASSUME IT IS.
JAMES MATTIS: OH, IT IS DECEMBER 20TH -- OH, I THINK I HAVE RESIGNED FROM THE BOARD BY THIS POINT, SIR.
MR. DOWNEY: OKAY. BUT DID YOU LEARN WHILE YOU WERE ON THE BOARD THAT AN INDEPENDENT EVALUATION HAD BEEN UNDERTAKEN?
JAMES MATTIS: I BELIEVE I KNEW IT WAS UNDERWAY. AGAIN, WHEN THE ARTICLE COMES OUT, WE'RE SCRAMBLING TO TRY TO VALIDATE WHAT WE HAVE SAID THAT THERANOS CAN DO. IT'S ROLL UP YOUR SLEEVES AND LET'S PROVE IT NOW BECAUSE WE'RE UNDER ATTACK. WE'VE GOT TO REACT TO THIS.
MR. DOWNEY: OKAY. SO YOU ENCOURAGED THEM TO UNDERTAKE A COMPARATIVE STUDY; CORRECT?
JAMES MATTIS: I WANTED COMPARATIVE STUDIES ON THERANOS FROM DAY ONE SO THAT WE COULD BRING IT ONLINE AND PROVE IT COULD --
MR. DOWNEY: AND YOU HAD LEARNED AT SOME POINT THAT THEY HAD UNDERTAKEN TO PURSUE THAT KIND OF A STUDY; CORRECT?
JAMES MATTIS: THAT I'M NOT SURE OF.
MR. DOWNEY: OKAY. BUT IN ANY EVENT, THE RESULTS OF THIS STUDY WOULD HAVE TAKEN PLACE AFTER YOU HAD LEFT THERANOS --
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: -- FOR THE DEFENSE DEPARTMENT. AND DO YOU RECALL AN EMAIL FROM MS. HOLMES LAYING OUT POTENTIAL STEPS? SHE SET FORTH THE POSSIBILITY OF BRINGING INTO THE COMPANY OUTSIDERS WITH A LOT OF EXPERTISE WHO COULD REVIEW DATA; IS THAT CORRECT?
JAMES MATTIS: YES, THAT'S CORRECT.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT EXHIBIT 10512 IN CONNECTION WITH THAT. AND IS THIS A SERIES OF EMAIL EXCHANGES BETWEEN -- CULMINATING IN EMAIL EXCHANGES BETWEEN YOURSELF AND MS. HOLMES AND OTHERS.
JAMES MATTIS: AND THE OTHER MEMBERS OF THE BOARD, YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 10512.
MR. BOSTIC: YOUR HONOR, I BELIEVE PORTIONS CONTAIN HEARSAY.
JUDGE DAVILA: IS THIS OFFERED FOR THE TRUTH OF THE MATTER ASSERTED?
MR. DOWNEY: IT'S BEING OFFERED FOR THE STATE OF MIND OF THE DEFENDANT.
JUDGE DAVILA: STATE OF MIND OF THE DEFENDANT?
MR. DOWNEY: YES.
JUDGE DAVILA: LADIES AND GENTLEMEN, THIS WILL BE ADMITTED NOT FOR THE TRUTH OF THE MATTER ASSERTED IN THE DOCUMENT. THIS ONLY GOES TO THE ISSUE OF THE STATE OF MIND OF MS. HOLMES, AND THAT LIMITED PURPOSE ONLY. YOU'LL BE SO INSTRUCTED LATER IN THE FINAL INSTRUCTIONS HOW YOU MAY TREAT THIS EVIDENCE.
(DEFENDANT'S EXHIBIT 10512 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: LET ME ASK THAT THAT BE -- MAY THAT BE PUBLISHED, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: I'LL DIRECT YOUR ATTENTION TO THE FIRST EMAIL AT THE BOTTOM OF THE EXCHANGE. THE EMAIL THAT IS FROM DAVID HELFET, M.D. DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DO YOU KNOW WHO DAVID HELFET IS?
JAMES MATTIS: I KNOW HIS REPUTATION.
MR. DOWNEY: AND WHAT IS HIS REPUTATION?
JAMES MATTIS: STRONG IN HIS FIELD.
MR. DOWNEY: AND HE GOES ON TO SAY IN THIS EMAIL -- HE THANKS PEOPLE FOR PARTICIPATING IN A SESSION ON FRIDAY, AND HE THEN SAYS, TOWARDS THE BOTTOM, "DESPITE SOME INITIAL SKEPTICISM I DO BELIEVE ULTIMATELY WE WERE ALL CONVINCED," AND THEN HE SETS FORTH A NUMBER OF BULLET POINTS, THE VACUTAINER WORKS, IF DONE CORRECTLY, RELIABLE SMALL AMOUNTS OF BLOOD VIA FINGERSTICK CAN BE OBTAINED FOR TESTING, THERANOS HAS THE TECHNOLOGY TO TEST NANO AMOUNTS OF BLOOD WITH THE SAME TESTS AND ACCURACY AS ROUTINELY DONE TODAY WITH TRADITIONAL VENAPUNCTURE. AND THEN HE SAYS, THE LAB IN THE BOX IS A REALITY AND WILL BE A GAME CHANGER. AND ABOVE THAT HE IS RESPONDED TO BY A THOMAS KICKLER. DO YOU KNOW WHO THOMAS KICKLER IS?
MR. DOWNEY: AND DO YOU KNOW OF -- HAVE YOU EVER HEARD OF DR. KICKLER IN CONNECTION WITH JOHNS HOPKINS UNIVERSITY?
MR. DOWNEY: AND DO YOU KNOW THAT DR. KICKLER HAD PERFORMED THE FIRST EVALUATION OF THERANOS TECHNOLOGY THAT WAS REFERENCED IN THE BOARD PACKET THAT YOU LOOKED AT EARLIER WITH MR. BOSTIC?
MR. DOWNEY: AND THIS GOES ON TO SAY, FROM DR. KICKLER, I WAS NOT ONLY IMPRESSED WITH THE EXCELLENT WORK DONE BUT ALSO WITH THE TEAM THAT HAS BEEN ASSEMBLED. THE PRESENTATIONS WERE SCHOLARLY, REFLECTED A BROAD KNOWLEDGE, CLEARLY PRESENTED, AND HE HAD THE IMPRESSION OF A LOT OF COLLECTIVE EXPERTISE, EXPERTISE AND EXPERIENCE AT THERANOS. AND THEN MS. HOLMES FORWARDS THAT ON TO THE BOARD AND SETS FORTH THE QUALIFICATIONS OF THE DOCTORS WHO HAD PARTICIPATED IN THIS REVIEW; CORRECT?
JAMES MATTIS: UH-HUH.
MR. DOWNEY: AND SHE WAS CLEARLY IMPRESSED WITH THE RESULTS OF THIS?
JAMES MATTIS: YES.
MR. DOWNEY: AND YOU WROTE BACK TO MS. HOLMES AND SAID, "THANKS ELIZABETH. I'M HEARTENED BUT UNSURPRISED AT THE FINDINGS." AND THEN YOU ASK, CAN WE HAVE THESE FIND THEIR WAY INTO TRADE JOURNALS AND THE BUSINESS WORLD NEWS AND MEDIA TO REVERSE THE CURRENT STORY? CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND YOU WERE CONCERNED THAT THE STORY WAS BECOMING, I THINK YOU CALLED IT SORT OF AN URBAN MYTH; CORRECT?
JAMES MATTIS: THAT'S CORRECT. IF WE HAD DATA THAT REFUTED IT, WE NEEDED TO GET IT OUT THERE.
MR. DOWNEY: AND THEN AFTER THIS EMAIL EXCHANGE BETWEEN YOU AND MS. HOLMES, SHE SEPARATELY FORWARDS TO THE BOARD ANOTHER CHAIN WHICH BEGINS WITH THE SAME BOTTOM CHAIN, AND THAT IS AT EXHIBIT 7653. IF YOU COULD LOOK AT THAT. AND IS THIS ANOTHER EMAIL EXCHANGE BETWEEN MS. HOLMES AND THE BOARD, INCLUDING YOURSELF?
JAMES MATTIS: YES.
MR. DOWNEY: IF YOU LOOK UNDER HER FORWARDING OF THIS, YOU SEE THAT IT'S AN EMAIL FROM BILL FOEGE TO MS. HOLMES; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND BILL FOEGE IS THE GENTLEMAN WHO WE MENTIONED WHO WAS THE DIRECTOR FOR THE CENTER OF DISEASE CONTROL; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: AND HE'S HIGHLY RESPECTED IN THE FIELD OF PUBLIC HEALTH; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND THEN HE REPORTS ON NOTES THAT HE HAD MADE OF HIS DIALOGUE WITH THESE DOCTORS; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF EXHIBIT 7653.
MR. BOSTIC: SIMILAR HEARSAY OBJECTION, YOUR HONOR.
JUDGE DAVILA: IS THIS OFFERED FOR THE TRUTH?
MR. DOWNEY: OFFERED FOR THE SAME PURPOSE.
JUDGE DAVILA: STATE OF MIND OF MS. HOLMES?
MR. DOWNEY: YES, YES.
JUDGE DAVILA: ALL RIGHT. LADIES AND GENTLEMEN, THIS IS ADMITTED. BUT, AGAIN, THE LIMITED PURPOSE OF THIS IS NOT FOR THE TRUTH OF THE MATTER ASSERTED IN THE DOCUMENT, BUT IT GOES TO THE STATE OF MIND OF MS. HOLMES, AND THAT IS THE ONLY REASON IT MAY BE CONSIDERED. YOU'LL BE INSTRUCTED IN THE FINAL INSTRUCTIONS AS TO THAT AS WELL.
(DEFENDANT'S EXHIBIT 7653 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU LOOK AT THE ATTACHED NOTES, THESE APPEAR TO BE NOTES THAT DR. FOEGE HAD TAKEN DURING THE MEETING; CORRECT? OR SUMMARIZED IN THE MEETING?
JAMES MATTIS: I GUESS SO. YEAH, THEY LOOK PRETTY COMPLETE.
MR. DOWNEY: OKAY. AND IF YOU LOOK AT, ON THE SECOND PAGE OF NOTES, DR. FOEGE WRITES, NEXT TO NUMBER 1, "THE AMAZING DETAIL OF THE PRESENTATIONS, THE HIGH QUALITY OF THE STUDIES IN THE ASSAYS. THE PROFESSIONALISM AND THE QUALITY OF THE STAFF AND THE FACT THAT THE THERANOS TEAM HAS IDENTIFIED AND PERFECTED SO MANY PARTS OF THE PROGRAM OVER THE YEARS." AND THEN HE GOES ON TO SAY THESE ARE ACADEMICS AND THEY'RE HARSH JUDGES; CORRECT?
JAMES MATTIS: RIGHT.
MR. DOWNEY: AND THEN IF YOU GO A COUPLE OF PARAGRAPHS ABOVE NUMBER 1, HE RECOUNTS IN THE SECOND PARAGRAPH OF THE NOTES THAT MS. HOLMES REVIEWED STUDIES OF THERANOS'S NANOTAINER; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND SHE PRESENTED THE DATA AS TO WHAT WAS KNOWN ABOUT HOW THERANOS'S TECHNOLOGY COMPARED VERSUS VENOUS TECHNOLOGY; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND THEN IT GOES ON TO SAY SHE USED SLIDES AND VIDEO AND SHOWED HOW THE EQUIPMENT WORKS. AND THEN DR. FOEGE RECOUNTED, "THE ATTITUDE OF THE GROUP CHANGED PERCEPTIBLY DURING THE DAY. SOON THEY SAID THEY HAD SEEN ENOUGH OF THE ANALYTICAL METHODS, THE CAPILLARY VERSUS VENOUS RESULTS SO THAT WE COULD GO ON TO OTHER THINGS." DO YOU SEE THAT?
JAMES MATTIS: YES.
MR. DOWNEY: AND DID YOU EVER DISCUSS WITH MS. HOLMES THE SIGNIFICANCE THAT SHE TOOK FROM THE REACTION TO THE TECHNOLOGY THAT WAS EXPRESSED DURING THIS SESSION?
JAMES MATTIS: DID I DISCUSS WITH HER HER REACTIONS?
MR. DOWNEY: YES, WHAT HER REACTION WAS TO THIS SESSION AND THE COMMENTS THAT WERE MADE BY EXPERTS DURING IT?
JAMES MATTIS: THEY WERE POSITIVE. YOU CAN SEE IN THE EMAIL FROM HER, SHE FORWARDS IT -- I MEAN, CLEARLY THIS WAS A STEP IN THE RIGHT DIRECTION TO GET EXPERTS IN AND REVIEW WHAT WE WERE DOING.
MR. DOWNEY: I JUST WANT TO ASK YOU WITH RESPECT TO ANOTHER THIRD PARTY VALIDATION ISSUE. I JUST WANT TO ASK YOU IF YOU HAVE EVEN SEEN A DOCUMENT BEFORE OR NOT. SO I'M GOING TO ASK YOU JUST TO LOOK AT IT AND YOU CAN TELL ME YES OR NO WHETHER THIS IS A DOCUMENT YOU THINK YOU'VE SEEN BEFORE.
JAMES MATTIS: OKAY.
MR. DOWNEY: AND THIS WILL BE IN YOUR NOTEBOOK AS -- I WANT TO MAKE SURE IT'S IN YOUR NOTEBOOK. BEAR WITH ME. EXHIBIT 302. TAKE A MINUTE TO REVIEW THAT AND LET US KNOW IF YOU'VE EVER SEEN THIS DOCUMENT BEFORE.
MR. DOWNEY: NOW, DURING THE 2016 TIMEFRAME, A NUMBER OF CHANGES HAPPENED AT THE COMPANY; CORRECT?
JAMES MATTIS: 2013?
MR. DOWNEY: 2016?
JAMES MATTIS: 2016? YES.
MR. DOWNEY: MR. BALWANI LEFT THE COMPANY; CORRECT?
JAMES MATTIS: YES.
MR. DOWNEY: AND INDIVIDUALS WHO HAD SUBSTANTIAL EXPERIENCE IN THE MEDICAL BUSINESS WERE BROUGHT INTO THE COMPANY TO OPERATE PORTIONS OF IT; CORRECT?
JAMES MATTIS: I'M NOT FAMILIAR WITH ALL OF THE DETAILS, BUT THERE WERE THE CHANGES THAT YOU'RE TALKING ABOUT.
MR. DOWNEY: OKAY. AND DID YOU GET TO MEET, FOR EXAMPLE, MR. BONNANI?
JAMES MATTIS: I DON'T RECALL.
MR. DOWNEY: OKAY. DID YOU CONTINUE TO COUNSEL MS. HOLMES DURING THAT PERIOD AROUND LEADERSHIP ISSUES AND MANAGEMENT ISSUES?
JAMES MATTIS: I DON'T RECALL WHEN WE STOPPED THOSE DISCUSSIONS. BUT EARLY 2016, WE WERE STILL TRYING TO GET THIRD PARTY VALIDATION, SO I COULD IMAGINE I WAS WORKING WITH HER IN HOW SHE CONVEYED THAT TO HER OWN TEAM FOR MORALE REASONS. YOU KNOW, THE COMPANY, YOU COULD LOSE PEOPLE IN THESE SITUATIONS, GOOD PEOPLE.
MR. DOWNEY: AND SHE CONTINUED TO SEEK YOUR ADVICE DURING THAT PERIOD?
JAMES MATTIS: IT'S BEEN A FEW YEARS. I DON'T RECALL WHEN WE STOPPED. OBVIOUSLY WE STOPPED IN ABOUT OCTOBER OR NOVEMBER, SOME TIME BEFORE THAT.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 10524.
JAMES MATTIS: YES.
MR. DOWNEY: IS THIS A LETTER FROM YOU TO MS. HOLMES?
JAMES MATTIS: YES.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF THIS DOCUMENT.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10524 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND THIS IS YOUR RESIGNATION TO THERANOS IN DECEMBER OF 2016; CORRECT?
JAMES MATTIS: THAT'S CORRECT.
MR. DOWNEY: YOUR HONOR, MAY I HAVE A MOMENT? I MAY BE DONE WITH CROSS-EXAMINATION. EXCUSE ME ONE MOMENT.
JUDGE DAVILA: YES.
(DISCUSSION AMONGST DEFENSE COUNSEL OFF THE RECORD.)
MR. DOWNEY: YOUR HONOR, I'LL PASS THE WITNESS.
JUDGE DAVILA: REDIRECT?
MR. BOSTIC: THANK YOU, YOUR HONOR.
REDIRECT EXAMINATION BY MR. BOSTIC:
MR. BOSTIC: GOOD AFTERNOON, GENERAL MATTIS. DURING YOUR DISCUSSION WITH MR. DOWNEY, YOU TALKED ABOUT AN LOE. DO YOU RECALL THAT DISCUSSION?
JAMES MATTIS: YES.
MR. BOSTIC: AND WHAT IS AN LOE? JUST REMIND US.
JAMES MATTIS: A LIMITED OBJECTIVE EXPERIMENT. WE WERE TRYING TO DEFINE WHAT WE WANTED TO DO FOR THE SIDE-BY-SIDE COMPARISON. WAS IT A PILOT PROJECT? A LIMITED OBJECTIVE EXPERIMENT? WE WANTED TO SEE IF WE COULD USE IT IN A MILITARY ENVIRONMENT.
MR. BOSTIC: AND DOES AN LOE HAPPEN BEFORE ACTUAL MEDICAL USE OF THE DEVICE OR AT THE SAME TIME?
JAMES MATTIS: WHAT I WANTED TO DO IS BEFORE I PUT MY REPUTATION ON THE LINE SAYING THAT I WANT THIS THING IN THEATRE, I WANTED TO KNOW IT WORKED. THAT'S THE BOTTOM LINE. I NEEDED TO HAVE THE DATA, AND THE BEST WAY TO DO IT IS TO PUT ALONGSIDE WHAT WE WERE DOING AND HAVE IT STAND AND DELIVER FASTER AND MORE ACCURATE RESULTS.
MR. BOSTIC: DO YOU REMEMBER SOME DISCUSSION WITH MR. DOWNEY ABOUT WHETHER THERE WAS AN AGREEMENT OR NOT, OR A PROTOCOL TO CONDUCT THAT LOE?
JAMES MATTIS: WE ENGAGED IN THE EFFORT TO TRY TO DO IT. WE DID NOT ACHIEVE THAT WHILE I WAS THERE.
MR. BOSTIC: AND MY QUESTION IS JUST, IS A WRITTEN AGREEMENT TO CONDUCT AN LOE THE SAME THING AS ACTUALLY FOLLOWING THROUGH AND CONDUCTING THAT EXPERIMENT?
JAMES MATTIS: NO, ABSOLUTELY NOT. IT SIMPLY OPENS THE DOOR TO DO WHAT WE NEEDED TO DO.
MR. BOSTIC: MORE RECENTLY IN YOUR CONVERSATION WITH MR. DOWNEY THERE WAS SOME DISCUSSION AND YOU LOOKED AT SOME EMAILS ABOUT DAVID HELFET AND A DAY THAT HE SPENT AT THERANOS; IS THAT CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: AND THAT WAS EXHIBIT 10512 THAT YOU JUST LOOKED AT. YOU CAN LOOK BACK AT IT IF YOU WOULD LIKE. ACTUALLY, IF WE COULD --
JAMES MATTIS: YES.
MR. BOSTIC: WELL, LET ME ASK, THE MEETING THAT MR. HELFET HAD AT THERANOS THAT IS REFLECTED IN THE EMAIL, WERE YOU PRESENT AT THAT MEETING?
JAMES MATTIS: NO, I WAS NOT.
MR. BOSTIC: AND DO YOU KNOW WHETHER IT TOOK MORE THAN A SINGLE DAY AT THERANOS?
JAMES MATTIS: I DO NOT KNOW THE DETAILS. WE HAD HEARD FROM MS. HOLMES ABOUT HIS CREDENTIALS, AND THAT'S WHY I WAS HAPPY TO SEE AN OUTSIDER COMING IN.
MR. BOSTIC: AND DO YOU KNOW WHETHER DAVID HELFET'S OPINION OF THERANOS WAS BASED ON ANY DATA THAT WASN'T ACTUALLY SUPPLIED BY THERANOS ITSELF?
JAMES MATTIS: NO, I DO NOT.
MR. BOSTIC: YOU TESTIFIED ON CROSS-EXAMINATION THAT YOU BELIEVED THAT THE BOARD OF DIRECTORS WERE CAPABLE OF ASKING THEIR OWN QUESTIONS AND BEING CANDID WITH MS. HOLMES; IS THAT CORRECT?
JAMES MATTIS: YES.
MR. BOSTIC: IF THE BOARD HAD BEEN INFORMED IN 2013 THAT THE EDISON DEVICE COULD ONLY PERFORM A SMALL SLICE OF THE TESTS THAT THERANOS WAS CONDUCTING, WOULD THE BOARD HAVE HAD QUESTIONS FOR MS. HOLMES?
JAMES MATTIS: WELL, QUESTIONS AND CONCERNS ABOUT ROLLING IT OUT IN A COMMERCIAL WAY.
MR. BOSTIC: WHAT QUESTIONS AND CONCERNS? CAN YOU EXPLAIN THAT?
JAMES MATTIS: WELL, THE QUESTION IS, WERE WE ROLLING IT OUT TOO EARLY AND LOSE OUR CREDIBILITY THAT IT COULD ONLY DO A SMALL NUMBER OF THINGS THAT, BY THERANOS'S DEFINITION, REQUIRED ABOUT 2,000 TESTS TO BE FULLY OPERATIONAL. THE CONCERN WOULD BE THAT WE COULD STUMBLE GOING OUT OF THE STARTING GATE AND IT WOULD NOT HAVE THE CREDIBILITY AS A RESULT. I'M TALKING NOW WITH HINDSIGHT.
MR. BOSTIC: AND THAT'S MY NEXT QUESTION. DID THE BOARD HAVE THE OPPORTUNITY TO ASK THOSE QUESTIONS OF MS. HOLMES BACK IN 2013?
JAMES MATTIS: WELL, WE HAD -- WE WERE IN THE ROOM WITH HER, BUT I TOOK AS GOOD FAITH THAT WHAT WE WERE BEING TOLD WAS ACCURATE, AND I ASSUMED THAT WHEN WE SAY THESE ARE THE THERANOS RESULTS, IT WAS FROM THE THERANOS MACHINE. LOOKING BACK, THAT PROBABLY WAS NOT ACCURATE. BUT AT THE TIME, THAT WAS THE ASSUMPTION THAT I HAD. I WOULD NOT HAVE TRIED TO DEPLOY IT IN A COUNTRY AS A CENTCOM COMMANDER IF I HAD A DIFFERENT VIEW OF IT.
MR. BOSTIC: DURING YOUR DISCUSSION WITH MR. DOWNEY, YOU LOOKED AT SOME CORRESPONDENCE THAT YOU HAD WITH MS. HOLMES FOLLOWING THE PUBLICATION OF "THE WALL STREET JOURNAL" ARTICLE. DO YOU RECALL THOSE EXHIBITS?
JAMES MATTIS: YES.
MR. BOSTIC: THAT CORRESPONDENCE AS A WHOLE EXHIBITED A SUPPORTIVE ATTITUDE OF YOURS TOWARDS THE COMPANY. WOULD YOU SAY THAT'S FAIR?
JAMES MATTIS: THAT'S ACCURATE.
MR. BOSTIC: THERE WAS AN EMAIL THAT MR. DOWNEY HAD YOU REVIEW WHERE YOU TALKED ABOUT HAVING FULL FAITH IN THE THERANOS PLAN. DO YOU RECALL THAT?
JAMES MATTIS: YES.
MR. BOSTIC: THERE WAS ALSO A STATEMENT WHERE YOU EXPRESSED SOME CONCERN ABOUT "THE WALL STREET JOURNAL" ALLEGATIONS BECOMING AN URBAN MYTH. DO YOU RECALL THAT?
JAMES MATTIS: RIGHT.
MR. BOSTIC: AND DID THOSE EMAILS -- WERE THEY GENUINE? WERE YOU SUPPORTIVE OF THE COMPANY AT THAT TIME? DID YOU STILL BELIEVE IN THE COMPANY?
JAMES MATTIS: THE OPERATIVE WORD IS "AT THAT TIME." I STILL BELIEVED WHAT WE HAD, AND I THOUGHT WE HAD TO GET OUT FRONT AND SAY HERE'S THE DATA TO SHOW WE WERE RIGHT, YES.
MR. BOSTIC: AND DID THAT REMAIN YOUR VIEWPOINT IN THE MONTHS THAT FOLLOWED?
JAMES MATTIS: DURING 2016, PROBABLY BY MID-YEAR, I DIDN'T KNOW WHAT TO BELIEVE ABOUT THE TECHNOLOGY.
MR. BOSTIC: AND JUST AT A HIGH LEVEL, WHY WAS THAT? WHY DID YOUR ATTITUDE TOWARDS THERANOS CHANGE?
JAMES MATTIS: THERE HAD BEEN TOO MANY SURPRISES. THERE WAS NOT THE TRANSPARENCY WITH THE MEMBERS OF THE BOARD THAT WOULD HAVE ALLOWED US TO BE IN FRONT OF THESE ISSUES AND TO HELP THE CEO TO HELP GUIDE THE COMPANY THROUGH THESE KIND OF THINGS. IF THE MACHINE WAS SHOWING PROBLEMS, IF IT WASN'T TURNING OUT WHAT WE NEEDED, THEN TAKE THE TIME TO CORRECT IT. DON'T ROLL IT OUT. MANY OF US HAD EXPERIENCE WHAT HAPPENS IF YOU GO PREMATURELY ON THINGS. SO WE WERE UNABLE TO HELP HER WITH THE FUNDAMENTAL ISSUES THAT SHE WAS APPARENTLY GRAPPLING WITH. WE ONLY SAW THEM IN THE REARVIEW MIRROR.
MR. BOSTIC: MAY I HAVE ONE MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST GOVERNMENT COUNSEL OFF THE RECORD.)
MR. BOSTIC: NO FURTHER QUESTIONS, YOUR HONOR. THANK YOU. THANK YOU, GENERAL.
MR. DOWNEY: NO FURTHER QUESTIONS, YOUR HONOR.
JUDGE DAVILA: MAY THIS WITNESS BE EXCUSED?
MR. DOWNEY: YES, YOUR HONOR.
JUDGE DAVILA: SIR, YOU'RE EXCUSED. THANK YOU FOR COMING IN.
JAMES MATTIS: THANK YOU.
JUDGE DAVILA: LADIES AND GENTLEMEN OF THE JURY, IT'S ABOUT 20 MINUTES TO 4:00, AND I KNOW I TOLD YOU WE WOULD REASSESS OUR SCHEDULE. LET ME TURN TO COUNSEL AND ASK THEM HOW LONG DO THEY THINK THIS LAST WITNESS, THE WITNESS WE INTERRUPTED, MR. LEACH, DO YOU HAVE AN ESTIMATE? AND I'LL ASK YOUR COLLEAGUE OPPOSITE THE SAME, MS. TREFZ.
MR. LEACH: I ESTIMATE APPROXIMATELY 20 TO 30 MINUTES, YOUR HONOR. AND I CAN WORK IN THAT TIME TO BE AS EFFICIENT AS POSSIBLE, AND I'M GUIDED BY THE COURT AND THE JURY ABOUT YOUR PREFERENCE.
MS. TREFZ: I ESTIMATE FIVE TO TEN MINUTES, YOUR HONOR.
JUDGE DAVILA: THANK YOU. I ASKED THAT QUESTION IN FRONT OF YOU, LADIES AND GENTLEMEN, FOR A REASON. WE HAVE THAT TIME ESTIMATE. NOW, LET ME ASK, THOUGH, IN ALL SERIOUSNESS AND CANDOR, WE CAN GO FORWARD AND FINISH THIS WITNESS TODAY. I'M KEEPING YOU LONGER THAN I HAD PROMISED. OR WE CAN COME BACK AND START WITH THIS WITNESS ON FRIDAY AND FINISH THIS WITNESS WITH THE 25, 30 MINUTES THAT THESE LAWYERS HAVE SUGGESTED. THE OTHER REASON I ASK THEM IN FRONT OF YOU IS I WANT TO PUT THEM ON THE SPOT, DIDN'T I, AND ASK THEM THEIR TIME ESTIMATES. BUT, LADIES AND GENTLEMEN, IF WE STAYED TO FINISH THIS WITNESS, OTHER THAN THE INCONVENIENCE THAT IT CAUSES, WILL THIS CAUSE -- IN FACT THAT I TOLD YOU I'D LET YOU LEAVE EARLIER. WILL THIS CAUSE ANY SIGNIFICANT DAMAGE OR HARM TO ANY OF YOUR PLANS THIS EVENING? THANK YOU AGAIN. I APPRECIATE THAT, AS DO THESE LAWYERS. WHY DON'T WE GO FORWARD AND CONTINUE WITH THE EXAMINATION OF THE FORMER WITNESS, AND WE'LL START THAT AGAIN.
MR. LEACH: THANK YOU, YOUR HONOR. THE UNITED STATES WILL CONTINUE ITS EXAMINATION OF JUSTIN OFFEN.
JUDGE DAVILA: THANK YOU.
MR. LEACH: MAY I?
JUDGE DAVILA: YES. YES.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: THANK YOU, SIR. IF YOU WOULD RESUME THE STAND. THANK YOU FOR YOUR PATIENCE. WE'RE GOING TO FINISH YOUR EXAMINATION NOW. MR. LEACH WILL FINISH HIS EXAMINATION, AND THEN WE'LL SEE IF THERE'S ANY CROSS-EXAMINATION. I REMIND YOU, SIR, YOU'RE STILL UNDER OATH. IF YOU COULD JUST STATE YOUR NAME AGAIN, PLEASE, FOR THE RECORD.
(GOVERNMENT'S WITNESS, JUSTIN OFFEN, WAS PREVIOUSLY SWORN.)
JAMES MATTIS: JUSTIN OFFEN.
JUDGE DAVILA: THANK YOU.