ga ♪ tonight on kqed newsroom, with the primary election over, a busy summer of campaigning lies ahead as candidates for governor, and others battle it out. keaw takeays plus analysis from california politics and government teams. also the "wall street journal" investigative reporter talks about his new book, "bad blood" detailing how the $9 billi company deceived silicon valley and the rest of the country. hello and welcome to kqed newsroom. i'm thuy vu. we begins with politics. tuesday's primary results set the stage for some bigaces in november. wealthy gop businessman john cox finished second behind gavin newsom in'she governor race. democrats are sharpening their

onals on seven key congressi seats in california that are crucial to winning control of the house this year. in two of those races, the gop incumbentsreretiring, giving y could flip e the the seats in the general election. but the gop is fielding candidates they think will motivate the base to turn out in november. joining me for a persptive is republican national committeeman sean steele. he joins us via sky from orange county. mr. steele, nice to have you with us. >> it is great to be anre. thyou. >> well, let's begin with the governor's race. john cox, it is john cox against gavin newsom, but cox only has about one-tehenth of tampaign money that newsom has. so what does john coxeed to do to prevail in november? >> well, first of all, cox came from way behind. frankly, none of us in the party thought either republican would have a hans to get up there and they came in in the t four, two of the top four. the big oddity was regosa, we rats ht it would be dem all the way. cox is holding the message. he put something together that o kes a lot of sense

democrats as well and he's talking about the hollowing out clof the middle ass, that is the war against middle class. to win, there's a lot of vulnerabilities. newsom certainly didn've a majority of democrats behind him, so he comes out with that. he's he's also a san francisco democrat. in san francisco that's a g reat thing. outside of san francisco, not so great because mt folks understand that san francisco has turned into kind of a trash town, high disease rate, highal hol. we got tent cities. it is really dysfunctional and you need a hazmat suit i certain parts of town, that's no exaggeration. that's according to mfrp the esronicle." >> we heard thisge before, right, mr. steele? let's look at 2014, for example. republican neil cash chaenged jerry brown. he blamed the california mess on governor brown. it didt work, he lost. what do you think will be different this time i that's the message john cox is sending? >> good point. he is no longer in califor he was a come-from-behind that

we have never heard from sie. e was appointed by president obam jerry brown goss worse. 4 million left california in the ast years, but it h accelerated in the last two years particular. more pple are lea california than coming to california and these are mostly bread winners, middl class folks. john cox has to get serious money together. luckily he is a wealthy developer and so he's got a reported wealth of 200 million. so he certainly will be there o with h money. republican governor's association would love nothing better to give gavin newsom a ard time because gavin's not ready forvernor, we know that. he's running for president. automatically when you're governor of california you are considered presidential material, evenerry brown thought so. >> he has said on this program he's not running for president, but as ye know wn't predict the future. >> oh, yeah. > let me ask about john cox again. since we're speaking of presidents, president trump

endorsed him during the on elec we saw john cox rise in the polls shortly after that. will the republican natio committee ask president trump to come the california to campaign on behalf of john cox in the governor's race and inther races around the state? >> probably trump would be best seed in orange county. trump had he had the time would haved campaignen orange county and probably carried it nicely, but trump made an intelligent si de during the presidential campaign. you campaign where the votes are, most likely to gethe electoral college. so he is popular in orange unty. it's turned around in the last year. he's been an effective president, even democrats havedm to it is the best unemployment ratio in two generations. african-americans have neveren o fully employed since they started measuring the metric. foreign policy -- >> will you ask president trump though to come to california ton camp on behalf of john cox and other republican candidates? >> i'm going to let john cox figure that out. my guesss trump's numbers are

negative in l.a. county and san francisco an that's about half of the votes right there, maybe 60% of the votes. i would have trump come tor ange county where he's popular and we got four congressional races up for grs. i think it would help us. but cox -- but cox, i'll tell you, maybe trump will do fundraisers for him, he certainly d pack the house. >> let's talk about the congressional races since you brought those up. what are your biggest takeaways there i especiallyn the seven gop-held seats democrats are hoping to flip in nov >> well, first of all, every single republican seat except fo one that are under challenge, seven of them, a majority of voters vot for the republicans who are running against democrats. that's a real tell for theal f secondly, in orange county there's four congressional seats that have been targeted. three of the four republicans are women. all four o the democrats are men. change.s a big i think the party has been really smart in that. in a district that's 35% asian

american voting -- i don't mean just population but ting, that's in the fuller district, young t kim is candidate for the republicans and she did extremely well on election day. the republicans have all endorsed her. we're going to keep that seat, and that's probably one of the toughest seats to keep in california. you have an extraordinary candidate that's bilingual. in the same district we actually kicked out a d whiteemocrat, elected ling ling chang and a new senator for the same area. we have a chinese-speaking senator, a korean-speaking senator. not to leave that alone, we have alexandra coronado running for assembly in the same area. she is spanish-speaking ph.d.. she will do well with the spanish-speaking community. n how much can you rely o asian american voters? because those that do identify with the party, they still iden as democrats over republicans two-to-one. yous ha you also have a situation where

the gop is the third party in california behd democrats and behind those who refuse to state a party affiliation. what kind of challenges do those pose for you? >> good challenges and tt's actually accurate. in orange county the minority are republican. 4 republican, 30% democrat. most asian americans are publicans or decline to state. a smaller number, number 3, are democrats in orange county. in orange county the asian americans will have a different values. it is very good news that our party -- you saw it in the ""l.a. times"" today isoming an asian republican party. that's the big -- >> all right. we will lea it there. sean steele, you certainly have a lot on your mind. thank you for joining us. sean steele, republican national committeeman for california. ♪ and for further analysis of the political landscape, i'm joined now in studio by our own

kqed california politics a government team, senior editor scott schar, reporter maria ce lasos, to have you back. >> good to be here. >> marisa, a lot of national tention paid to the governor's race. california is a bluete. gavin newsom in a prime spot, a strong position. are there potential vulnerable challenges ahead? >> i mean, you know, you would be silly in any racse like thi to take anything for granted. john cox, the republican, did h.t thro it is seeming like he's solving a lot of -- you know, support on the rht. he did get the president's endorsement a couple of weeks before the primary. you know, he wants to make this not about trump, which i'm sure newsom would love to kp talking about. he wants to talk about the affordable crisis, the housi crisis. the message from republicans is that california is doing well economically but there's a lot of people who have been lt hind and that democrats broke it and, you know, they think they can fix it better.

so i think that this will be an interesting race. the numbers are not in johnox favor, you know. republicans have less voters ons their rol now than independents in california, but i think this will be -- it will be a race. i think it will be interesting to vet cox because he's very unknown and we don't know a lot about him. what of the economy, if it tanks for some reason over the >> it could. generally it takes a while for people to feel that and things are going so wl right now in california and the country. but, you know, we -- one big questhon i think ie power of the gas tax, repeal. you know, we saw one state senator, josh newman, recalledb is constituents on tuesday by a big margin and that's a big message that the rublicans have between now and november. >> the republicans are celebrating because they n longer have a democratic super majority in the state legislatre for this year. >> exactly. they would like the power of that message. whether it will translate to a c governor's is a different question. you might be for the gas tax

repeal and still vote for gavin newsom. >> so gavin newsom promises to be -- if elected promises to be of the most progressive governors we have seen in quite a while. could it be a liability though given that in some other local races, district attorney and judges races for example, we saw progressiveshaot doing t well? >> yeah, you know. i think the thing about gavin newsom is he teped into s really grassroots issues that -- where there's a lot of passion,r whett is marijuana legalization, gay marriage, gun connktrol. i te benefitted from that. you know, the enthusiasm level for gavin newsom going back,kou w, for the last several years on different issues, he's been very adept of gettg out in front of issues. >> yeah, i think there are some pitfalls for him around single payer.le peant to know how are you going the pay for this, will it be with tax s.increase think those like district attorney races are a different calculation. yes, gavin newsom is running as a progressive but he has the support of a lot of establishment in the business community. you know, as a san francisco mayor, he was pretty moderate. he overcame big budget deficits.

i think he's kind of trying to walk that line, saying he's iscal to keep the responsibility of brown, you aow, his predecessor, but also try to beitious and look towards more progressive solutions for the problems facing california>> yeah. i look at cox trying to focus in on issues where he thinks gavin newsom has gone too far left and i think single payer is a example of that. you look at polls where folks are told it will come with an tax incree and there not going to support it. the gas tax will be on the ballot in november. tut those tha are tentative about the tax issues, maybe he can find holes with newsom.f i turnout is high for democrats in november i think it becomes a moot po>>int. oney is an issue. are republicans going to want when they're battling for control of the house, looking at so many national fights, do they ant to spend money on what is really an uphill battle -- not an impossible one, but an uphill battle. >>nd the gop is already planning to blame democrats and by extension gavin newsom fth

decline of the middle class. how will that likely play out among voters? >> you know, you look at a governor like jerry brown who has, you know, pretty wide popularity still in the state and he has done it by hui the middle path, betting some n major ans on board deals he struck in the legislature. so i think maybe theax sk for gavin new son in the months onead is to say i'm going to offer ctinuation of what jerry brown has done at the state capital, which is fiscal spab stability and moderate gains. er i think the candidates move to the middle afthe primary, and i think it will be easier for newsom to dohat than for john cox. cox hitched his wagon to donald trump in a big way, and he did to do that to get in the top two, and tre's no indication he wants to back away from that. >> his history on abortion, other things that maybe are important to the republican base but will not play as well, even not justh democrats but some independent voters, i think will be hard for him to overcome. >> what you said earlier, scott, i want to expan bd on thatause

you said, you know, typically after a racedidates move more towards the middle. do you think it is true for congressional races, too? i meanemocrats kind of dodged a bullet, they will have, you know, in most congressional races emocrat in the top two, but what do they need to do ben now and november to win the races? >> in a word, turnout. inine of the ten congressional districts target by the democrats, if you counted up all of the votes for republican a candidat all of the votes for democratic candidates, only one of the ten districtsthas ere a majority of votes for the democrat. but the turnout will be much nd bigger, it has to be. you know, it has to be because es is going to be younger, it will be l white, it will be more democratic, more liberal. i think that's the key thing, and that's what typically happens in general elections. >> i think too, look, it's been sort of a free-for-all.ad we o many candidates in these races running, in some cases on both sides, right multiple republicans, multiple democrats. if democrats canoalesce behind these candidates, get the vote

out, i think newsom seeshis as an opportunity to have a republican opponent that he can focus on some of tho down-ticket races. you know, they have a fighting chance. nothing is gitranteed for er party, but i do think that the electorate will likely look very different in november than it did in junt, and tha is going to help democrats in these races. they're going to be talking to the specific iues of those districts, which i think is really important. it is easy to kind ofeneralize these things, but if you are running against, you know, steve knight in palm dalarea, it is going to be a different conversation than even in orange arunty which is not that away. >> absolutely. i think that despite that, you still will seeepublicans nationally try to tie the democrats to democratic leadership in the house, especially democratic leader p nancyosi. on the flip side you will see democrats try to tie the candidates to president trump. it is easier with an incumbent d likey rohrabacher who has votes on the board with the affordable care act. than someone like lin ling cheng who is a fresh face.

>> yes, i think in some ways in the districts where there were resignations, they're in a stronger position because they'reot tied to tru. in the end, the midterm are a referendum on the white house, especially now because one party controls all branches of government. y how feel about the president and the country. >> you have been talking about t about rnout, but wha the message do democratics have? do they need to move to the middle going back to the earlier que>>ion? as marisa said, these are local issues. there isn't one m nationalsage i don't think the democrats have. it does depend on the local issue. in the central valley it is things likewate immigration plecourse, but in the end peo vote on their guts. do they like this person, do they like the incumbent, the person running. it is more of a retail politics. governor, you know, you're going to get your sense from tv and radio. but for congress, you're going

to meet these folks. >> loo at jeff dunham. he has been a supporter of the dreamersf the dacaal, but in recent weeks he is moving to push a vote on the issue, someoing he wasn't ready t consider six months ago. i think it speaks to the potency ofhe latino vote in his district and him kind of reading the tea leaves and wanting to say, yes, i voted with trump on the affordable care act but i'm not going to stick shouldeimr-to-shoulder withn immigration issues when my district doesn't reflect that type of, you know,ng fee or message. >> i'm sorry. go ahead. >> i wasoing to say that's the key, is to have a candidate in a district that reflect the people who live there. >> i have to move ohis before we run out of time because there was something else very interesting happening in ctis eleion as well on the local front. there was this criminal justice theme weaving through a lot of the local races, right? despite efforts by black lives mat per and criminal justice groups and even with help from billionaires like georgeoros and steve jobs' widow, the progressive challengers forex ple for district attorney

races largely lost. what happened? >> they did. we still he a run-off in contra costa so there's one outstanding hope of the races ge that were tted by george soros. you know, i think that this was in some ways perhaps an overreuph by these g these are national groups that came in. you know, they targeted nancy 'm lley in alameda. she is a democrat with the therort of jerry brown and folks that pushed criminal justice reform. so i think there were some schisms within that left progressive community who pushed a lot of the things we have sees tewide, and i do think in some ways it was the first shot. i think we will expect to see it come back and more challenges and perhaps better, stronger candidates. >> yeah, i think it is something you will see kind of sloy ogress over time against district attorneys. look, d.a.'s cacan push b and we saw it with nancy o'malley in the closing weeks of the campaign. she was on tv, getting in front of the voters. t is different than in judicial races where maybe judges are hesitantbe overtly political. that's not the case with district attorneys.

>> in genal it is good that the impact of district attorneys was elevated because most people don't know even a d.a. is elected much less what they do. they have a lot of power. it is worth, even i the candidates lose it is worth having a conversation with the yters about what kind of values do you want inr d.a. >> speaking of, you know, elections of people that maybe the public doesn't always realize areelected, the case in santa clara county of judge aaronpersky. he was recalled. it was a case watched nationally, very closely.e hs recalled over what maybe any people thought was a lenient sentencing of a stanford student convict of attempted rape. what does this mean, scott, for judicial independence? >> i don't think it means a lot. thi was one particular case that had a lot of passion. there were some people against judge persky who felt very strongly, t is wasa me-too moment. i don't think we're necessarily going the see all kind of judges being swept out of office. we saw four in san fisco who were targeted by public defenders and all four were el rected, reconfirmed. >> strongly. >> strongly, yeah. >> yeah, think that the persky

thing in addition to the me-too movement was confluence black lives matter. there was concern over that sentence and whether it had to do with brock turner's race and after influence. >> privilege. >> privilege, yes. >> again, it is something we should be talking about in terms of should judges be elected, but i'm not ready to agr with a lot of the critics that this will change the game enrely. >> i think the political reality for the judicial and district attorney races,t is easier get an incumbent out of office when you are going after them over one perceived egregious tcision in the case of judge persky thao make the argument about an over-arcing need to focus on racial disparity which is what the district attorney's ras were ab >> san francisco mayor's race? do a hair between mark leno, lbreed. we are getting results every day at 4:00. w could be days until we know the actuinner. >> all right. boy, you guys had a busy week

and it keeps getting busier. thank you all. >> thank you. in 2015 founder elizabeth holmes she would transform blood testing by using a single drop low-cost to get fast, test results for everything from cholesterol to cancer. but in march the securities and exchange commission called it an elaborate year's long. fraud holmes persuaded investors to sink hundred of millions of dollars into her company. "wa street journal" investigative reporter broke that story. he has a new book out chcling the company's collapse called "bad blood, secrets and lives in a silicon valley startup." good to have you here. >> thanks for having me. he what was the game-changing technology that company was pitching? >> so elizabeth claim to have invented technology that could run the full range of laboratory ytests, which iou speak to

experts can range from a few hundred tests to a few thousands, from a drop of blood or two nicked from the fingeran d to return results to doctors and patients very quickly and at fraction of the cost of other laboratories. this would have been game-changing technology because no one had been able to run that many tests off a tiny sample of blood. >> and it was rolutionary because down the line eventually walgreen's and safe way signed on as well and became clients. your book though raised i great detail all of the red flags along the way about delibately misleadi misleading test results, the faure by ceo elizabeth holmes to produce contracts she said she had with pharmaceutical companies. >> right. >> yet it still attracted an all-star cast of investors. the board consisted of those

like general james mattis. how many were so duped along the way? >> wha elizabethas adept at, it was winning the support of someone olde experienced, with a great reputation, and then tion to ng that assoc get her own credibility. sthe first pesh perso did it with was her stanford ngineering professor channing robertson. then a few years in, she met don lucas,he venture capitalist who grew mariel i son and helped him bring oracle corporation he public inid '80s. in 2011 she met george schuthz, famous former secretary of ioate, who crafted the reagan administrs foreign policy and who many still credit with winning the cold war. what manon people d know about george schultz is that he is passionate about scienceis house is right off the stanford campus. when he met elizabeth, i w wowed with her claims about what her technology could do and quickly agreed to join her board and then introed her to his

buddies at the hoover institution, which is a think tank housed on thetanford campus. that's how she came to meet the likes of henry kissinger and sam nun and bill frisk, bill perry, et cetera. they soon joined the board, too. >> and was timinac also ator in all of this? because around 2010 we see facebook rising, twitter being very popular. >> right. >> investors were basically looking for the next unicorn startup and there it was. ushing t, and money was g into the valley because in large part we had had the great recession in 2008, 2009 and if federal reserve lowered interesa rate traditional investments like bonds no longer turned good money so investors were looking for higher turns elsewhere. >> so the valley became the gold rush. >> the valley became the gold rush, and one of the companies that seemed so promising was

theronos. in late 2013, early 2014 the company achieved a valuation of more than$9 million and elizabeth holmes managed to keep half of the equity so she was worth almost $5 billion and this fulfilled this yearning there was fore the first femaltech founder who became a billionaire. there were other women in the valley who hadhi eved, you know, fame and wealth. sheryl sandberg, who iumber two at facebook, marissa mire, but they had not created their companies. elizabeth holmes was going to be the first tecas founder who w a woman and who achieved great riches. >> do you think she was intentionally trying to mislied investors or was she consumed by her own ambitions and thoug c shld make it happen? >> i mean it is a mixture of both. this is not a madoff long con, you know. madoff essentially decided i the late '80s he was no longer really investing money and bui a poncy scheme. elizabeth holmes when she dropped out of stanford had a

vision and set about creating a company and hiring people to make the vision happen, but along the w encountered setbacks as entrepreneurs do, and refused to admit the reality of those setbks and continues to overpromise to investors. w got to a pointhere the gap between her promises and what she said she had achieved techng ally and what the reality of the technology was got so enormous that ty the timy went live with the finger stick blood test in wall green's stores in the fall of 2013 it co had a massive fraud. e> so is there a possibility that there could b criminal charges stemming from this? because thesec, of course, charged her with massive fraud. she agreedo pay a $500,000 fine. are there criminal igvestigations going along -- going on r now though? >> right. there's an investigation spearheaded by the u.s. aorney's office i san francisco that's been going on since december of 25. o we're now two-and-a-half

years into it and my sources tell me thatt investigation is very active and very advance wd, and it mayell result in criminal indictments of elizabeth holmes and her ex-boyfriend, who was the number two at the company. >> and we just have a little time remaining, but you say in your book it is the biggest corporate fraud sin. enr what do you think is the biggest lesson to learn from this? >> enr was a bigger company certainly and more money was involved. it was the seventh lst u.s. company at the time. o theronos isiously a startup, albeit a startup that attracted nearly a billi dollars in investing, a billion dollars that went poof. but the most egregious part of the theronos scandal is the way the company was cavalier about putting patients in harm's way. in the course of my reporting i came across more than a dozen cases of patients who had very questi aonable test result who had health scares and whether or not anyone w hard

is still an open question. and i think that the big lesson is that you can't employ the silicon valley vap ware, fe it until you make it playbook in the realm of medicine. re -- ou a >> there are lives at stake. >> there are lives at stake. >> john carey rou, author of "bad blood." thanks for being here. >> that will do it for us. you can find more of ours coverage. i'm thuy vu. thank you for joinings. ♪ ♪

>> america first or america isolated+ presiden trump's trade policies and his nod to russia angers u.s. allies. as the president travelsid abrod wento what it means there and at home. pres. trump: they don't mention the fact that they have trade barriers against our farmers. they don't mention the fact that they are judging almost 300s. tariff >> president trumpfaomes face-to-ce with world leaders that he has infuriated on a series of issues. from the iran nuclear deal to new tariffs on steel and aluminum. some say president trump is stoking division