Famed Documentarian Alex Gibney On His HBO Film On Elizabeth Holmes And ‘The Psychology Of Fraud’


In the years since Alex Gibney won an Independent Spirit for Enron: The Smartest Guys In The Room in 2005 (which he followed with an Oscar for Taxi To The Dark Side, in 2007), he’s directed an average of about three documentaries a year. And that’s not even including his producing credits, of which he had seven in 2018 and 11 in 2017. It’s an astounding output for any filmmaker, let alone a documentarian, working in a medium where directors frequently spend years on one project. After all, when you’re depicting reality, it’s not as if you can just shoot faster. Partly through being so prolific (though it also helps that his movies are, you know, pretty good), Gibney has seemingly become America’s premiere documentarian. This week he takes on Elizabeth Holmes and her fraudulent blood testing tech company, Theranos, in The Inventor: Out For Blood In Silicon Valley.

Much as with the competing Fyre Festival documentaries earlier this year, The Inventor has competition from The Dropout, a podcast series that received a 20/20 special on ABC this past Friday. Luckily, the Elizabeth Holmes saga, first exposed in a series of Wall Street Journal reports by John Carreyrou (later expanded into a book, Bad Blood), is one that many of us can’t get enough of, and there are plenty of angles to explore. What does the Theranos story tell us about the tech industry? What does it tell us about how the economy works (or doesn’t)? What does it tell us about regulation in the medical field?

For Gibney, his interest was general, but also with a particular interest in how the fraud worked, what did Holmes prey on as a fraudster, and how did everyone get fooled. His focus was on “the psychology of fraud,” as Gibney calls it, and it’s a subject Gibney should know well, having made documentaries about both fraudulent companies (Enron) and about charismatic fraudsters (The Armstrong Lie).

The Inventor premieres tonight on HBO. I spoke with Gibney by phone last week.

Do you know what number documentary this is for you?


Stopped counting?

I did.

Do you sleep? Is there a part of the year that you take off from these?

Well, if you look at my resume, you’ll see a kind of a dark period for a long time and then magically, I got the opportunity to make documentaries, once Enron had been a success, and I made up for lost time.

What were you doing during your dark period?

I was hustling, trying to convince people that they should give me money, but very few people were obliging.

Was this always the career path for you?

My dad had in mind that I would follow the family business, which was journalism — he was a long-time journalist for Time, Life, and Newsweek — and that I would be a print journalist. He offered to get me interviews with Time and Newsweek and so forth, but in college I got the movie bug. You know, it was the time of Scorsese and Coppola and there was a film society where you could watch a great documentary like that Maysles Brother’s film, the name I can’t remember now… oh, Gimme Shelter. So I got the movie-making bug and after college I went to UCLA film school and I got a job for the Samuel Goldwin company. You know, cutting trailers and then, ultimately, re-cutting foreign films and then finally editing movie movies. But along the way, I got frustrated. To be an editor is tough because you’re only as good as what the director shoots. And, I got a tingle to maybe do docs because docs, you didn’t have to raise so much money. And weirdly, while you have no control over non-fiction events, you have a lot more control over the filmmaking process. But, it took me years to make it work, ’cause I didn’t apprentice myself to anybody. I just kind of hung out at a shingle and said, “I’m gonna do it.” I said I was gonna do it, but it took years and years and years to make it happen.

So, in terms of this project, it seems like the public can’t get enough of this story about Theranos and Elizabeth Holmes. Did you go into this project expecting that there would be competing projects?

No. Though, I did go into the story already knowing that there was going to be a movie made. Because, even before John’s [Carreyrou] book [Bad Blood] had come out, Adam McKay, whom I know slightly, had optioned the book and announced that Jennifer Lawrence was gonna play the Elizabeth Holmes role. So, already, there was a certain kind of cinematic interest in this.

Did you go into it with an angle?

Well, for me, the angle was not just it. I mean, I know John was gonna be writing his book and ultimately, while we were making the movie, the book came out. But, for me, what was interesting about this story, which was a huge fraud if you think about a nine billion dollar company and suddenly falling to a valuation of less than zero. But, at the same time, it didn’t reach the kind of level of depravity or misfeasance that Enron did or some of the films I’ve done about the Catholic church or Scientology. Luckily, because, you know, the fraud was discovered before anybody really got hurt. So, for me, the film was about the psychology of fraud. How does it work? How is it that somebody can deceive others and maybe deceive themselves in order to better deceive others? Those were the interesting questions for me in the film.


Do you think that the story exposes flaws in how the economy works?

Yes. I think part of what I talk about in the film is that we like to imagine that the economy is a series of rational choices; calculations about risk and reward. I think it’s much more anarchic and based on emotion than we like to think or believe, and that’s part of the work of Dan Ariely’s. He wrote a book called Predictably Irrational. And I think we’re beginning to understand just how prone we are to making weird, snap judgements that may have served an evolutionary purpose at one time but don’t always serve the rationality of a market.

And so fraud can often thrive in the market because fraud is built on storytelling and storytelling connects to us on an emotional level. We want things to be a certain way. We want to believe the machine is gonna work because it’s gonna serve some kind of larger vision of how we’re moving forward to the future. And we invest in that. It’s very hard for us to admit when it doesn’t work, particularly, for the person at the center of the business. You know, so they pretend that the vision, the dream, is real, instead of paying attention to the grim reality of its failure.

When Elizabeth Holmes started out, she sort of had access to some of these people that were making Venture Capital decisions. Right?

Yup, she did. Although, honestly, a lot of the people she got early on, while it’s a lotta money to you or me, they would drop a million here or a million there, somebody like Larry Ellison, I think, put in a million dollars, and to them, that’s nothing. I mean it’s a rounding error. So, I think, for them, it’s like, “Well, yeah, sure. I bet a lotta long shots,” but of course, for Elizabeth, she was building her portfolio of respectability. I’ve got Don Lucas, Tim Draper, I’ve got Larry Ellison, Avie Tevanian was in on it for a while. Until he kind of raised a stink. So, she begins to put those people together and she puts together her board.

The harder thing for me to understand is later, when she was in theory, a going concern, and how people like Rupert Murdoch and some of the investor groups that came in and put in a much more substantial amount of money, allowed themselves to invest without really kicking the tires, it’s kind of a jaw-dropper.

Right. And, on the note of the board, what do you know about the practice of these government and military figures sitting on the boards of these companies where it seems like they have nothing to do with their areas of expertise. Is that a common practice? What do you think that comes from?

Well, I think it comes from management’s desire not to have too much interference from the board. I mean, when management consultants come to me, we’re often, from Enron, to this story, and other stories; even the film I produced about Roger Ailes, people were always saying, “What about the board? Did the board know?” No. You know, very often, in theory, the board is supposed to be this august group of individuals who represent shareholders in an aggressive way. Usually, it doesn’t work out very much like that at all. They’re usually a rubber stamp for management. And they usually don’t investigate things this early, and particularly they don’t when they’re not even involved in the industry. Almost none of them had any medical experience.

Which was where she really got in trouble. Though, it’s interesting. I mean, Jim Mattis did intervene with some of his people in the Department of Defense in ways that Elizabeth asked him to do. He was so convinced by the emotional valance of the story that he ruddered against his own people, as if to say, “Why is it taking you so long to approve this?” His interview with Ken Auletta kind of jaw-dropping. You know, he says, “What are the words you would use to describe Elizabeth Holmes?” Integrity is the first word he uses. And then, “a commitment to human rights, in the most profound sense of that word.” This is a woman who put lives at risk for her own benefits. So, you couldn’t have gotten it more wrong.

In terms of footage, what did you have access to and what did you use to put the documentary together?

Well, early on, we were really in trouble. We didn’t have much access to anything. Nobody would talk to us who had been an employee because they were all terrified of David Boies, that he was gonna sue them. The only people who were talking to us were the two journalists, Ken and Roger. And we had a tremendous amount of difficulty getting footage of Theranos because, while I knew that Theranos had shot a lot of stuff, nobody was giving it to us.

They had some footage of news crews who had gone there. It wasn’t until very late in the process, once we kind had a rough structure of the film, that we got some people to leak to us over 100 hours of material from inside Theranos, that Theranos had bought and paid for. Sometimes, using Errol Morris as a director. And that allowed us to really tell the story from the inside out.

So when did you start working on this story? Was it after John Carreyrou’s pieces in the Wall Street Journal?

Yes. It was after John Carreyrou’s thing, but [at that stage] Elizabeth still believed that there was a comeback in her near future. And, my producer Jesse Deeter sat down with her for five hours, for a five-hour dinner, and talked to her about the possibility of interviewing her or having her be involved in some way, and it’s clear she wasn’t really interested in that, except to the extent that we could be used to further burnish her reputation, so she suggested that once she was back on her feet, she might give us an access. Or rather, John’s view of that. But still, for a while, she was still a going concern even though she had lost a lot of money, and that’s why people were so afraid of coming forward, because, she still had access to money and still had access to powerful people.

And in terms of people being scared of David Boies, how ballsy do you think it was for Carreyrou to report on this story at the beginning?

You can see how ballsy it was. Because, you hear in the film, the meeting, where David Boies and Boies-Schiller was coming in to try to shut down the Wall Street Journal to prevent them from publishing and David Boies will say, “Oh, no. That’s not what we were doing. We just wanted to make sure that they got the story right.” I think that’s disingenuous.

Is there any possibility of those lawyers facing consequences for any of the things they did and any of the threats that they threw around at the beginning of this?

I doubt it. They would say, “Look, we were defending. Vigorously defending the interests of our client.” That’s usually what they say. But, David Boies, recently, in a New York Times profile said, “The law is there to protect the weak against the strong.” I think that’s a paraphrase. But nothing could be further from the truth in the Theranos story, where it’s all about the strong putting its boot on the face of the weak. You know, in a very forceful way.

Do you know what’s happening with Elizabeth Holmes now? Does she still have money? Is she still living like a rich person?

Well, you know, so far as we know, the SEC fine of $500,000 pretty much wiped her out. But she comes from a reasonably wealthy background, not super rich, and by all accounts, she’s spending her time hanging out in Silicon Valley, and she has a new boyfriend, who has a self-driving car startup. Interestingly, Elizabeth Holmes didn’t walk outta this with a lotta money. I think everyone’s wondering how she’s getting the money to pay for a very fancy law firm to defend her. Williams Connolly. It may be that it’s part of an insurance policy or it may be that somebody’s giving her money to defend herself. We don’t know. I don’t know.

Do you think that story plays outside of the US? Or is it more specific to us, that we get excited about business people who say they have no personal lives and wear one outfit and sleep only four hours a night or whatever.

Yeah, I think that is a peculiarly American thing. In other words, Americans live to work rather than working to live. So, you know, and the idea that it’s Silicon Valley, you know, in order to show how tough that you are, you gotta work 24/7. You dream your work. As Elizabeth said “I’m married to Theranos.” Now, that was a lie, as it turned out. I mean, she did have a relationship. And, she did have her own personal life, but the myth, the ethos is, you work all the time and that’s the only way you get ahead. And also, this idea, I think, the other thing that’s very American, when it comes to health care, it’s like, “Oh, God forbid that we should have Medicare for all. Here, we’ve got a market-based solution to all that ails us, and the woman in charge of it can be a billionaire and we’ll all have lower prices. Isn’t that the way competition works?”

I mean, if you think about it, that’s the craziest thing ever. The idea that people can become fabulously wealthy, and as they do, prices will drop for everyone else. You know, that’s just bullshit.


That said, I should say, as a disruptor, she was wading into a part of the medical business that needed disrupting. You know, it’s dominated by two firms, Quest and LabCorps. And they have a record of being sued for defrauding Medicare and Medicaid. And, for being very pricey and not very transparent about their prices.

I mean, the dream that Silicon Valley generally sells is that you can do something altruistic and become a billionaire at the same time. Do you think that that idea takes a hit at all after Theranos?

I think it takes a pretty big hit. And, it takes a pretty big hit in concert with what we’re learning about how much good Facebook is doing, for example.

When you’re getting the footage from people who were initially scared of getting sued, like, did you have to learn a lot about the legalities of NDAs? Is that all still standard practice? Or, do those actually hold up in court?

You know the NDAs; you raise a really interesting question. And, this is something that I wish the Congress would look at. NDAs, in theory, are supposed to be used to protect trade secrets and commercial proprietary commercial information. What they’re really used for is to protect companies against accusations of fraud and corruption. And, not only companies, but individuals, like Harvey Weinstein. And I ran across them, of course, in Scientology. Scientology forces its members to sign multiple NDAs. And the whole idea is to prevent people from speaking truth to power. That’s what they’re designed to do. But you can’t force somebody under an NDA to commit an illegal act or to part of an illegal act.

That said, people are scared. If you’re on the edge of legality, are you, by talking to reporters, are you breaching that NDA and therefore opening yourself up to a lawsuit?

I noticed a lot of parallels between Elizabeth Holmes and Billy MacFarlane, who’s the focus of the Fyre Fest documentaries that came out earlier this year. One thing we learned with the sort of dueling Fyre Fest documentaries was the kind of compromises you sometimes have to make, either morally, or financially, in order to get access to the footage or the people that you wanna tell a story about. Were there any of those choices that you felt like you had to make in trying to make this movie?

Nope. I mean, that’s one where, I mean, I say that because I did consult with lawyers in terms of what we could and couldn’t do. And, if people leak to us they leak to us on the basis that they wanted to give us that information because they felt it was important for the public to see it. That’s the basis on which we received it.

On another note, is Jim Cramer ever going to have to answer for all the dumb stuff he says on his stupid show?

Good question. And one might wanna look into companies he’s recommended in the past. I think there’s a trail having to do with what Jim Cramer says on the air that might be instructive for people to examine.

Like in terms of bad outcomes [incompetence] or in terms of the people behind them [collusion]?


‘The Inventor’ airs Monday, March 17th on HBO. Vince Mancini is on Twitter. You can read his archive of film reviews here.