Correction: An earlier version of this story misspelled the last name of Florida tennis coach Nick Bollettieri. This version has been corrected.
For the father of laser eye surgery, Jonnie R. Williams Sr. literally came from the heavens.
Williams, a charming salesman with a taste for the good life and the grand gesture, flew in on his private jet to present the struggling engineer in California in 1989 with a proposal.
Williams would help Charles Munnerlyn take his fledgling California company public, providing the start-up capital needed to survive lean years until it could win Food and Drug Administration approval of Munnerlyn’s newfangled laser.
It worked. The device eventually received approval, and the company, called Visx, was sold in 2004 for more than $1.2 billion.
By then, Williams — who this summer is expected to appear as the star witness in the federal corruption trial of former Virginia governor Robert F. McDonnell — was long gone. He had sold his shares, pocketed his profits and moved on to other ventures in a career that has relied on making risky investments in unproven sciences and getting others to do the same.
A few, such as Visx, have proved spectacularly successful. Others have flamed out, including an eye-care company that went bankrupt amid a Securities and Exchange Commission complaint Williams settled in 1993.
Throughout, he has acquired a reputation as a man who has used his growing wealth and personal appeal to collect powerful friends.
Williams’s history of big and sometimes broken promises is likely to play a central role in the July trial of McDonnell (R) and his wife, Maureen, who were indicted last month and accused of accepting more than $165,000 in gifts and loans from Williams in exchange for assisting his dietary supplement company.
Williams has told authorities that he showered the first couple with gifts and cash because he believed that it would pay dividends to Star Scientific, the company he led as chief executive until December.
McDonnell has insisted that he made no promises to Williams, and the former governor’s spokesman has said the businessman’s account cannot be trusted.
McDonnell’s supporters have expressed confidence: Surely a jury will side with the respected former governor, who served 37 years in public life, over the self-promoting salesman who turned on McDonnell in the face of a securities probe of Star.
But the argument has a potential flaw: A quick Google search of Williams would have revealed the controversies surrounding his previous businesses. If Williams was so shady, why did the governor become so close to him, calling him a “family friend” until recently, vacationing with him and asking him for loans?
Through his attorney, former Virginia attorney general Jerry Kilgore, Williams declined to comment.
But there’s an easy way to explain why the McDonnells found Williams so appealing when they met in 2009: The businessman is, by all accounts, a fun guy to be around. In his first meeting with the McDonnells, a sit-down at the Four Seasons Hotel in New York City one month before McDonnell took office, Williams boasted that his friends included Oscar de la Renta.
Another Williams friend was Nick Bollettieri, the famed Florida tennis coach who helped nurture Andre Agassi and Monica Seles.
When then-Virginia first lady Maureen McDonnell walked the catwalk at a charity fashion show for the American Cancer Society in 2011 in Richmond, Williams flew in another friend from New York City to walk beside her — a male model known as a muse to famed designer Karl Lagerfeld.
“If I could bottle it, I’d probably be a rich man,” said Patrick McSweeney, a former chairman of Virginia Republican Party and a lawyer who served for a time on Star Scientific’s board. He was talking about Williams’s charm.
McSweeney said Williams is exceptionally bright and enjoys sharing his wealth with friends. “He’s a very generous fella. . . . I don’t know why he does it, but he loves doing things for people,” he said.
The businessman splits his time between a condominium unit on the grounds of Bollettieri’s academy in Florida and a $2.2 million estate on 28 acres adjoining a golf course outside Richmond. He recently sold, for $2 million, the 4,400-square-foot vacation house at Virginia’s Smith Mountain Lake where McDonnell and his family stayed in 2011. Williams still owns the 2,100-square-foot house next door.
He wears a Rolex, drives a Ferrari and travels by private plane, which he has provided free to the campaigns of Virginia Republicans, including McDonnell’s 2009 run for governor.
“When he comes in, it’s like waltzing in with the king of Sheba. It’s a fun ride,” said a former Star worker, who spoke on the condition of anonymity to avoid being drawn into the federal case. “When you meet him, he’s intoxicating,” he said. “You want to believe in him.”
Williams, 58, began life in Fredericksburg, Va., with modest means.
Williams, the son of a Navy sailor, didn’t stand out in school. “Just a regular kid, just a regular student,” recalled John M. Gallahan, a former Star president who has known Williams since the two were in fifth grade.
But Williams had certain talents that became clear early. “He just has a very easy way of connecting with people,” Gallahan said.
The summer after his freshman year of college (he never graduated), he returned to Fredericksburg and sold cars. He quickly became the dealer’s top seller. Then he turned to real estate, and in no time, he was a local developer’s top earner. Next, he opened an eyeglass and contact lens shop called Colonial Opticians.
Early on, questions were raised about the viability of the shop, owned by a young man with no medical background. Williams was fined for fitting someone with contact lenses without a license, the Fredericksburg Free Lance-Star wrote at the time. There was talk around town that Colonial was running short of money.
According to a Free Lance-Star profile of the 24-year-old published in 1979 under the headline “Super Salesman,” Williams zipped around town in a gold Mercedes convertible and dismissed suggestions that he was losing money.
“What are you riding in?” Williams said, as he slapped the car’s steering wheel.
But the rumors were true. The shop was soon auctioned off in bits and pieces — “frames, lenses, fitting tables, grinders” — to help offset the unpaid balance on a $45,000 Small Business Administration loan, the paper reported in January 1981. By then, Williams was nowhere to be found, the article said, having left town after closing the shop just before Christmas. “If the auctioneer really wanted to make some money, he’d auction off Jonnie’s address and phone number,” a bystander told the paper.
In fact, Williams had moved to Massachusetts and gone back to selling cars. He spent several years selling Mercedes cars at Prestige Imports in Norwell, outside Boston. The company is defunct now, its owner retired in New Hampshire. But he has no trouble recalling Williams 30 years later.
“I remember him as the best salesman we ever had,” Helmut J. Schmidt said. “In my opinion, he had more class than what’s typically known as a car salesman. They don’t enjoy the best reputation. Jonnie was different.”
Schmidt went on: “He always had a smile on his face. He was rather soft-spoken. He was not at all pushy. We had Mercedes and Nissan at the time. He specialized in Mercedes. So he had a fairly sophisticated and affluent clientele, and he related well to them.”
But Williams’s ambitions were far larger than a suburban car dealership.
With a partner from the failed Fredericksburg eyeglass shop, an ophthalmologist who had studied at Johns Hopkins, Williams started a company that sold video lectures by respected medical academics.
According to a lengthy 1988 Boston Globe article about Williams and his partner, the two quit that company within three years amid disputes with participating universities. The company ultimately declared bankruptcy.
Next, Williams and the ophthalmologist invested in a company called Spectra Pharmaceuticals, which sold an eye ointment containing vitamin A. Much like Star Scientific more than 20 years later, the company touted connections to top-notch university researchers on behalf of a non-FDA-approved product, and there was a study showing the ointment showed promise as a possible treatment for various eye diseases. When the company went public in 1985, its stock price climbed quickly.
But further research showed the ointment was not as promising as the company had claimed.
Investigations were opened into the original study, which, it turned out, had been conducted on just 22 patients and performed by a doctor with a financial stake in the product, the Globe reported.
In 1993, Williams settled a claim over Spectra with the SEC, which accused him of paying a stock analyst to falsely pump up the medical research in newsletters in an effort to boost the company’s stock price. He paid a nearly $300,000 fine but did not admit guilt.
“It was a very sad situation,” recalled Scheffer Tseng, the doctor who conducted the research, in a recent interview.
A junior researcher at the time, Tseng went on to run a successful medical practice in Miami. He acknowledged that the research was flawed, but he said it was not fraudulent. He met Williams only a few times, he said, but the young salesman was notable for his efforts to ingratiate himself with people who could assist the company. “There is a kind of the way he deals with important people,” Tseng recalled. “Someone with influence, he would try to find a way to gain access to.”
After Spectra, Williams invested in companies that had a couple of things in common: At their start, they mostly involved not-yet-proven medical applications. And Williams made money not from sales but from rising stock prices after an initial investment.
Victor Kashner, a Florida stockbroker who helped Williams take companies public in the 1980s and 1990s, said a number of the ambitious businessman’s efforts turned profits. Others flopped.
“These are speculations,” said Kashner, who was suspended from trading for three months as part of the Spectra settlement. “If one clicks big, it makes up for a lot of ones that don’t work out.”
Kashner said Williams was never shy about his motivations. “He used to say, ‘There’s nothing I like better than making money.’ ”
Twenty-five years after Williams helped Visx get its footing, Munnerlyn said he believes that it’s fair to give Williams some credit for its success. “It was important that they came along when they did,” he said of Williams and his partners. But, he added, “I didn’t have much contact with Jonnie after a year or two.”
But Star Scientific was different. Williams launched Star in 1990 as a maker of discount cigarettes, and he stayed.
Tobacco industry experts say the company operated profitably in that niche during the 1990s with four brands, the biggest named Gunsmoke. But Star began losing market share as some major cigarette makers, seeking to counter rising prices related to requirements of the 1998 national tobacco settlement, introduced cheaper brands and started offering promotional discounts on their marquee products.
By then, Williams thought he was onto a whole new niche: safer cigarettes.
Experimenting with a microwave oven, Williams developed a means of curing tobacco that resulted in products billed as having fewer cancer-causing compounds.
Williams had special tobacco barns constructed that cured the tobacco with indirect heat and contracted with farmers to grow what he billed as “Star-cured” tobacco. But the money to buy tobacco seemed to dry up as Star focused on a court fight against competitors, said Carl Ligon of Chase City, Va., who was a grower for Star in 1999 and 2000.
The suit accused R.J. Reynolds of patent infringement, saying Reynolds had copied Star’s curing process. The potential for a big win buoyed the company’s stock for a while, but the lawsuit eventually netted Star a disappointing $5 million, far less than had been hoped.
“That put a hurt on the whole works,” Ligon said. Williams “spent a lot of money trying to get them in trouble because they had taken his copy of the barn.”
Also during that time, Star launched a variety of unusual smokeless tobacco products — lozenges that in some cases delivered a nicotine buzz.
One, named CigRx, was billed as a dietary supplement and smoking-cessation product. Others, named Stonewall and Ariva, were described as “hard snuff.”
Williams recruited an esteemed former FDA official, Curtis Wright, to help get those products to market, said Robert L. Balster, a professor of pharmacology and toxicology at Virginia Commonwealth University.
“I was quite impressed when he went to Star Scientific,” Balster said. “I thought that meant they were moving into the pharmaceutical area, and maybe they are, but their products are not pharmaceuticals.”
The lozenges were “pretty much a commercial flop,” he said. That left the dietary supplements. In 2007, Star sold off its cigarette arm, and in 2012, it exited the tobacco business altogether.
The company had been losing money for years in 2011, when Williams grew closer to the McDonnells and Star introduced its new supplement, Anatabloc, with a luncheon at the governor’s mansion. Anatabloc was made from a synthetic version of a chemical found in tobacco, and the company said it reduced inflammation.
Williams worked to find impressive names to back his untested product. He sought to persuade credible university scientists to conduct research on its key chemical, and he signed golfer Fred Couples and tennis player John Isner as paid pitchmen. The stock price rose. (“Stock looking good. Well done. Gov,” prosecutors say McDonnell e-mailed Williams in June 2012.)
But now, like a number of previous Williams ventures, Star is in trouble. The company’s stock price has taken a serious hit; the FDA has warned that the company was marketing Anatabloc illegally; and shareholders have filed suit. The U.S. attorney’s office began looking into the company’s private stock transactions last year, applying legal pressure that resulted in Williams’s cooperation with prosecutors in building a case against Robert McDonnell.
The company has now told investors that it expects to face no charges. Williams agreed to step down as chief executive in December, accepting a different role in the company, and new management is considering rebranding the company under a new name.
So what might a McDonnell jury think of Williams?
“As a witness, he’ll come across to some as a snake-oil salesman and to others as a very generous person,” McSweeney said. “A lot of people, friends of mine who’ve heard his pitch, said: ‘We’re not going to touch him with a 10-foot pole. He’s too slick.’ And others will find him very candid, charming and believable. You can bet the jury consultants will be all over that [jury pool].”
Carol D. Leonnig and Alice Crites contributed to this report.