The first self-made Silicon Valley female billionaire has just been sentenced to 11 years in prison. Her company, Theranos, previously valued at 10 billion dollars is now worth nothing. Billions of investors’ money were wiped out.
Elizabeth Holmes promised the world a medical miracle. At 19 years of age she claimed to have developed revolutionary new technology that could detect 200 different diseases using just one drop of blood.
Many investment gurus and financial advisors believed Holmes’ promise. Even Bill Clinton and Joe Biden were taken in. Rupert Murdoch was the single biggest investor in Theranos, buying 125 million dollars’ worth of shares. Holmes, young and charming, managed to sell her tale and everybody bought it for a while - except the experts.
Professor Phyllis Gardner was professor of medicine at Stanford University where Elizabeth Holmes completed just 2 semesters studying chemical engineering before dropping out. She knew Holmes’ promise was nonsense. She wasn’t charmed by the attractive Holmes as were the elderly men who sat on Theranos’ board. They included Nixon’s secretary of state Henry Kissinger, Reagan’s secretary of state George Schultz and Trump’s secretary of defence Jim Mattis. But they knew nothing about medicine.
Professor Gardner knew Holmes’ claims were just a massive scam. “She had no knowledge of medicine and a rudimentary knowledge of engineering,” Gardner stated about Holmes, “and she was just 19, she thought she knew it all – well, you don’t at 19”.
Holmes managed to dupe diplomats, investors, celebrities and global investors. Without producing even the smallest fragment of evidence of the reliability of her medical tests, she received enough investment to roll out her devices throughout the US. She not only deceived her investors but jeopardised the lives of thousands of patients whose blood was tested using Holmes’ devices. The results of those blood tests were wildly inaccurate. This went way beyond money. Here was a crook, so sociopathic that she recklessly jeopardised lives to enrich herself.
And that is what we’ve seen in Malta.
Vitals, like Theranos, had their own fairytale to sell. And Labour’s Minister Konrad Mizzi did his utmost to sell that fairytale to the nation. On 18th June 2016, the country was promised that Vitals would inject 220 million euro to revamp three hospitals over two years. Labour promised that the three facilities would recruit 800 new employees who would be paid by Vitals. Vitals in turn would make money by attracting medical tourism to Malta and Gozo.
Labour promised a 450-bed new hospital in Gozo. Ram Tumuluri claimed that the new Gozo hospital would have the potential to add another 100 beds. He promised to increase the number of new jobs in Gozo alone by between 400 and 600. St Luke’s would undergo extensive refurbishment and would have 350 new beds - 150 for rehabilitation and 200 for acute medical care. St Luke’s, they promised, would house a new nursing school. A new geriatric hospital would also be set up in Karin Grech with 270 beds. “Today was a new milestone in the evolution of medical services which would raise standards, create jobs and boost the economy,” Konrad Mizzi falsely promised in March 2015. This was classic Labour - hype over substance, fantasy over facts, lies over truth.
Everybody bought Labour’s fairy tale, except the experts. MAM refused to sign any deals in relation to Vitals. They insisted they would wait until the NAO report was published before making any decision. Labour’s promise turned out to be one extraordinary fraud. Just as the Theranos dream was a lie peddled by Holmes to make her a billionaire, the Vitals’ promise was a cover for an industrial scale heist. 21 million euro were transferred to Bluestone, the parent company behind Vitals, between 2016 and 2018 alone. The transfer of those millions occurred on the same days that Labour’s government passed on multi-million euro payments to Vitals.
The revolutionary device that Elizabeth Holmes promised did not exist. Holmes was nothing but a fraud. The company that Labour entrusted to take over half the health service, was just a fraud too. Like Holmes, Vitals knew nothing about medicine or hospitals.
The consequences of Holmes’ and Vitals’ fraud were real and dangerous. It wasn’t just the millions that were lost, stolen or siphoned off. There were real lives that were ruined through the damage done by the whole scam. Patients had the most to lose - and lose they did.
To be able to lie and lie without caring is not normal - it is extreme sociopathy. Prof Gardner said of Holmes, “if you can generate a fraud, smile about it, that is no conscience - that’s egoism that I can’t describe.” That applies to Labour too. And yet Robert Abela continues to perpetuate the damage done, pumping millions more into Vitals’ successors, Steward.
If this were just about money, it would be bad enough. When people’s lives are at stake, that’s an entirely different scale of recklessness. Elizabeth Holmes deserves every minute of those 11 years in jail for the biggest swindle in medical history. Labour’s leadership who engineered the biggest swindle in Malta’s history deserves far worse.