Clinton Supporter Elizabeth Holmes Banned From Operating Blood-Testing Labs

Theranos CEO Elizabeth Holmes remains a presidential ambassador

Elizabeth Holmes
Elizabeth Holmes / AP
July 8, 2016

Federal regulators banned Hillary Clinton supporter and Theranos CEO Elizabeth Holmes from operating blood-testing labs for two years, according to the Wall Street Journal.

The sanction from the Centers for Medicare and Medicaid Services follows months of scrutiny rooted in the discovery that Theranos had misled the public on the capabilities of its blood-testing technology, which was once believed to be revolutionary. Forbes dropped Holmes' net worth from $4.5 billion to zero.

The sanction also included a monetary penalty, though the amount was undisclosed.

This sort of punishment against such a major lab is unprecedented and could lead to Holmes resigning, according to an expert who spoke with the Wall Street Journal.

"I can’t think of anything this severe ever happening to a clinical laboratory of this size and scale," said Geoffrey Baird, associate professor in the department of laboratory medicine at the University of Washington. "I think the company will have to show [Holmes] the door somehow, which might not be possible under the current governance."

"This is so rare, and essentially unprecedented in a company of this size, that it is hard to know exactly how they will proceed," said Baird. "Personally, I believe she is obligated to step down immediately."

Holmes remains featured on the Department of Commerce website as a Presidential Ambassador for Global Entrepreneurship despite the harsh federal punishment.

The White House has not responded to multiple inquiries into whether it plans to address Holmes' ambassadorship, which was issued to her by President Barack Obama during a 2015 ceremony.

The laudatory video of Holmes is still featured on the official White House YouTube page.

Holmes has also remained politically involved throughout the controversy.

Holmes was scheduled to host a fundraiser for Hillary Clinton in March at Theranos headquarters in Palo Alto, but the fundraiser was relocated. Holmes still attended and spoke at the fundraiser, which was attended by Chelsea Clinton.

Holmes was featured during the Clinton Global Initiative's 2015 annual meeting, where she spoke on stage with former President Bill Clinton about Theranos. Here is video of the discussion:

In the wake of the CMS sanction, Holmes says Theranos will rebuild the laboratory.

"We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions," Holmes said in a statement. "Those actions include shutting down and subsequently rebuilding the Newark lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures."

Published under: Hillary Clinton