Former Safeway CEO says Theranos delays raised red flags

SAN JOSE, CALIF. – Former Safeway CEO Steve Burd testified in the Elizabeth Holmes criminal fraud trial on Wednesday, saying repeated delays with Theranos’ blood testing machine raised red flags about the failure of his company’s multi-million dollar partnership with the healthcare startup.

“The deadlines continued to be missed and we often didn’t have an explanation for it,” Burd told the jury. “I kept asking ‘Give me some details here.’ So that was the frustrating part. We always tried to help them in any way we could. “

Burd’s testimony came the same day a juror revealed she would have a hard time sending Holmes to jail, prompting the judge to excuse her from the case.

Safeway has spent more than $ 300 million to build clinics in hundreds of its grocery stores in anticipation of blood testing technology. The idea of ​​the partnership is that “while you are shopping and before you go, you will get the results of this blood test,” said Burd.

Burd was CEO of Safeway for two decades. He testified that he was initially charmed by Holmes and his vision to create cheaper and faster blood testing technology for his clients.

“I was very impressed,” said Burd. “There are very few people that I have met in the company who I would say are charismatic. She was charismatic, she was very smart and she did one of the hardest things you can do in a business. business, and that is to create a business from scratch. “

Former Theranos CEO is fighting 12 counts of wire fraud and conspiracy to commit wire fraud. Federal prosecutors allege that Holmes and his top executive, Ramesh “Sunny” Balwani, have engaged in a multi-million dollar scheme to defraud investors and patients. Holmes and Balwani have pleaded not guilty.

Burd said he sees the partnership with Theranos as an opportunity for Safeway to expand into the healthcare world. However, repeated delays with miniLabs, Theranos’ blood testing machine, have raised red flags.

Burd testified that Holmes demonstrated the device at a board meeting. They performed a prostate antigen test on a board member. Burd recalled that “blood was taken, it went into the machine and we never got a result.”

Burd also said Holmes never revealed to him that she was romantically involved with Balwani.

“It just raises the question of what else is hidden,” Burd said.

Burd’s testimony came at the heels of the judge excusing juror # 4. The juror declared that she was a Buddhist and expressed significant concern and anxiety about the punishment.

“It’s really difficult for me,” the juror told the judge. “I think about what happened if she has to be there for a very, very long time. It’s my fault, and I feel guilty for it.” The juror said she believed in love, compassion and forgiveness.

“Your responsibility as a juror is to decide only on the facts of the case, you should not determine any penalty,” said US District Court Judge Edward Davila. “It’s up to the court to decide. It’s not your decision.”

NBC News legal analyst Danny Cevallos said having a juror excused for showing overwhelming sympathy for an accused is “incredibly rare.”

“Maybe we should have seen it coming,” Cevallos said. “After all, Elizabeth Holmes has managed to charm some of the most prominent and respected people including Henry Kissinger, George Shultz and James Mattis. What is particularly amazing is that she has had this effect on jurors, without saying a word, sitting there at the defense table. “

He was the second juror to be excused from Holmes’ trial.

In September, Davila excused a 19-year-old woman for financial hardship. There are now three substitute jurors left out of the initial five.

Cevallos warned that losing too many substitute jurors could result in the trial being overturned.

“It would have been a wonderful juror to keep for the defense,” Cevallos said. “I’m sure they mourn the loss of a juror who developed an emotional attachment to Elizabeth Holmes.”

His replacement, Alternate Juror No.2, expressed similar unease after sitting on the main bench. The juror said she was concerned about how her role in reaching a verdict would affect Holmes’ future.

“She’s so young,” the juror said, looking at Holmes. “I don’t know if I’m 100% ready to participate in something like this, English is not my first language so I don’t know.”

Davila reminded the juror that she would not be responsible for a possible sanction in the case and that a diverse jury is important. Federal prosecutors and Holmes’ defense attorneys agreed she could stay on the jury.