As early as November 2010, Woody had overseen a conference call with wealthy supporters of Romney and informed them that a large chunk of McCain supporters were up for a Romney presidency.
In January 2011, Woody had accompanied Romney to Israel on what was described as “an education trip and two days of meetings” with officials there. A couple of weeks later, Woody also was at Romney’s side at a private dinner with Woody’s friend, and another talked-about presidential contender, the notoriously hard-line conservative Republican New Jersey governor Chris Christie, at Drumthwacket, the tongue-twister-named palatial official mansion of the governor, located in Princeton, near the impressive estate where Woody himself had grown up.
Early in the summer Woody tossed two $2,500-a-plate VIP breakfasts for Romney at the fashionable Cipriani restaurant in New York, and at the exclusive University Club where he told the gathering of about three dozen Republican high rollers, “Mitt’s the right guy to get the country back on track.”
As with McCain, Romney’s big money-man was the Band-Aid heir who would later boast to a reporter that he touched base with “every Republican in New York … several thousand,” spending some two dozen hours of the week dialing for campaign dollars and support.
“As Woody sees it, we have a world championship, Super Bowl country with very, very poor management,” one of his hedge fund pals, using a football analogy, told the New York Observer.
* * *
Then came a big surprise.
In 2011 Woody himself was being talked up for political office—as a potential candidate to run for the U.S. Senate from New Jersey, the home state of his forebears who had founded Johnson & Johnson in the gritty industrial city of New Brunswick in the late nineteenth century, and where it was still headquartered in the twenty-first century. New Jersey also was the home and headquarters of Woody’s controversal Jets football team.
And New Jersey was the Johnson dynasty’s home for generations, where their mansions, estates, and farms were located, all of which were big pluses, and had made Woody a contender in the hearts and minds of some GOP strategists—if he ever chose to run.
The big question was: Could Woody Johnson pass the smell test? Was there anything in his background that would surface and hurt him if he decided to run, or at the minimum raise issues about his character? At the same time he was an unknown quantity as a campaigner, and as a public speaker. As one high-ranking New Jersey Republican operative who liked Woody for the Senate observed, “We know him, and we don’t know him. He’s an enigma.”
Until Woody joined the exclusive club of National Football League owners when he bought the Jets for $635 million in 2000—the third highest price ever paid for a an NFL team—and later dove into the political arena as a behind-the-scenes power broker, his private life had been shrouded in secrecy, one of the hallmarks of the Johnson dynasty except for when they wound up in the gossip columns, or tabloid headlines, or court dockets.
With the Jets in his portfolio, Woody had become a very public figure—perhaps the best known and celebrated of the contemporary Johnsons.
Yet many secrets about his life still remained.
By early 2011, stories about Woody’s political prospects had begun appearing in the media.
The Time magazine Web site Real Clear Politics headlined a story, “Republicans Raise Prospect of Johnson Senate Bid in N.J,” and quoted “several politically involved Republican sources” as saying that Woody was “toying” with the idea of a Senate run.
Clearly, some thought, Woody could be a candidate and a contender if he wanted it.
To some, he even had rock-star qualities.
“There’s a certain Springsteen-esque nature of being Woody Johnson,” was the feeling of former New Jersey state GOP chairman and influential political strategist and lobbyist Tom Wilson, one of those who by mid-2011 foresaw a political future for the Johnson heir. “Springsteen’s a folk hero to New Jerseyans, but so’s a local guy gone good by the name of Woody Johnson, a very visible and public figure operating a very visible and public business, the Jets, that puts him in front-line contact with a whole group of people which might not typically be thought of as possible Republican voters.”
Besides the Jets fans there was an even bigger constituency, according to Wilson, and that was “the number of people who live in New Jersey who are connected in some way to Johnson & Johnson, which is is a household name, a dynasty.”
Woody’s biggest plus for political office, his supporters all felt, was his fortune, because he could finance his own campaign. If the billionaire trust-funder ever decided to take the challenge and run, he could easily pay for his campaign out of pocket, at least fifty million dollars, the political experts computed, which was a drop in the proverbial bucket for him.
* * *
A measure of the kind of money that Woody Johnson had, and was willing to spend to get whatever it was that he wanted, was underscored in late July of 2011, around the time he was being talked up as a potential candidate, when he shelled out a whopping fifty million dollars over five years, with a guaranteed twenty-four million dollars, to get just one player, the superstar wide receiver Santonio Holmes, to stay with the Jets as the 2011 season approached. Holmes’s guarantee was considered the most money any receiver had ever been thrown by a team owner.
After the deal was consummated, the overjoyed and suddenly very wealthy Holmes tweeted a photo of himself in a pair of shorts, celebrating with an expensive vintage bottle of Louis Roederer Cristal, and declaring, “Big bro showed his love today.”
With the nation then on the verge of financial default and the world seemingly falling apart, the editors of the New York Post considered Woody’s deal so enormous that they plastered the photo of the goateed Holmes swigging from the nearly empty champagne bottle all over the front page, with the headline “JET FUEL.”
Woody was determined to put together a team of superstars that would win the Super Bowl, whatever the cost.
For the 2011 season, he had already committed $100 million in salaries.
The head coach of Woody’s Jets was the overweight, Ralph Kramdenesque Rex Ryan, in a four-year contract worth at least twelve million dollars, who often boasted about his boss’s money and how he spent it in order to make the team a Super Bowl contender.
As an example, Ryan noted the seventy-five million dollars Woody had spent to build the 130,000-square-foot Atlantic Health Jet Training Center in Florham Park, New Jersey. “This wasn’t like some run-of-the-mill place … the place is like a gleaming office structure for some high-tech company,” he declared. “Heck, the weight room alone is around eleven thousand square feet.”
Woody had also spent hundreds of thousands of dollars to prepare the Jets’ practice fields, but when Ryan discovered that the turf wasn’t level, Woody “was pissed” but went ahead and had the fields torn up and new sod put in.
Boasted Ryan: “We had a helicopter hovering all night trying to dry the field off before we could finally start using it.”
Nothing ever seemed too expensive for the Johnson heir if he really wanted it.
4
Despite the growing support in some quarters for Woody Johnson to run for an elective office, it was doubtful he would ever throw his hat in the ring. He was too low-key to campaign, too secretive about his personal life, and had a closet full of embarrassing dynastic skeletons that surely would surface in the gossipy Internet age where no secrets can be held for too long.
Plus he had his own scandalous issues with which to deal—from divorce, to having two sons with his second wife prior to their marriage, to his lack of parental control involving his firstborn daughter, Casey, to the handling of his massive fortune—that in particular.
Woody’s greatest political asset—his money—had at least once gotten him in an embarrassing and questionable jam. He was placed in the unaccustomed public position of being a central figure—a case history, actually—that illustrated “how U.S. citizens, with
the backing of an armada of professionals, hide assets, shift income offshore, or use offshore entities to circumvent U.S. laws,” according to a shocking 2006 report by the U.S. Senate’s Permanent Subcommittee on Investigations into “crooked tax havens that had cost the U.S. Treasury as much as $300 million in revenue.”
Woody’s money issues—and his eventual naming in the Senate report of sham tax havens and the billionaires who love them—had started when he was in the process of buying the New York Jets in 2000. In order to partly finance the more than $600 million purchase—a lucrative acquisition that would more than double in value in a decade, making the billionaire even wealthier—he needed to sell securities, according to the report. Facing hefty capital gains tax on the stock sale, he began looking for a creative way to write off a good part—or possibly even all—of Uncle Sam’s tax bill as an expense of doing business.
To get the ball rolling, Woody contacted his “long-term financial accountant” at KPMG, one of the world’s largest firms in the audit, tax, and advisory business, who had recently moved to a super hedge fund firm headquartered in Seattle called the Quellos Group. Woody asked him “to begin looking for ways to mitigate the capital gain tax on the securities sales he was planning,” according to the Senate report. In Woody’s “large financial enterprise,” as the subcommittee investigators would later characterize the Johnson Company, “taxes are often considered an expense.”
By late December 1999, Woody had “tentatively decided” to invest in a complex financial strategy involving what turned out to be sham stock transactions—he would later claim without his knowledge—called portfolio optimized investment transactions (POINT). The base of operations for the POINT was the Isle of Man, an obscure self-governing British Crown dependency located in the Irish Sea that had no capital gains tax, or inheritance tax, and with offshore banking as one of its main economies, it was a perfect location for Quellos to set up shop.
With Woody’s thumbs-up to do the deal, according to the report, one of those involved sent an e-mail stating, “Ain’t capitalism great!”
Another declared, “Now I just hope Woody doesn’t get cold feet or have the IRS select his return for audit!”
The deal offered to Woody by Quellos was later described by the Senate investigators “as an opportunity to purchase a tax loss for cash.”
Other e-mails uncovered by the investigators during the yearlong probe made no mention “of a concern on the part of Mr. Johnson or his representatives over the profit-making aspects of the transaction.”
While Woody cooperated with the Senate investigators and was interviewed by committee staff in July 2006, he claimed he couldn’t remember a lot of details of the various complex transactions. He also maintained a don’t-blame-me manner, and asserted that he had only followed what his trusted advisors had told him to do. Moreover, he stated that he had been advised by his lawyers in 2000 that the Quellos deal “was consistent with the tax code.”
In 2003, the Internal Revenue Service had challenged that assessment, and Woody had to quietly settle up with Uncle Sam, agreeing to pay one hundred percent of the tax due—about seventeen million dollars—plus interest.
Woody should have known the old adage that if something sounds too good to be true, it probably is, but apparently he didn’t think that way, trusted advisors or not.
With the IRS paid off, with no major public scrutiny at the time, Woody must have thought the tax scam scandal was all behind him.
But three years later the Senate subcommittee issued its sharply worded, highly detailed 397-page report, entitled: “Tax Haven Abuses: The Enablers, the Tools, and Secrecy,” which revealed Woody’s involvement along with that of a few other billionaires “who took advantage of this tax haven.”
As The Washington Post reported about the Senate probe under a headline that declared, “Tax Shelters Saved Billionaires a Bundle,” the investigation “details how these wealthy, politically connected people ducked hundreds of millions of dollars in tax payments by using secretive corporations and trusts on the Isle of Man.”
When receiving word that Woody’s name had surfaced in the probe, the administrator of a Web site called the Jetsinsider.com, a forum about the team, wrote: “Woody Is a Tax Cheat! Another solid move by the great businessman Woody Johnson. Will this guy ever do anything the right way and own up to his responsibilities?”
The public release of the Senate report, which made Woody Johnson appear like some greedy, fat-cat Republican tax dodger—even though he was never a target of the investigation—should have been incredibly embarrassing. But despite a few stories in the media describing the tax shelter probe, most if not all of the coverage involving Woody at the time centered on the fact that he had hired a new head coach for the Jets, and that the team was hopefully on its way to the Super Bowl.
The Washington Post’s Steven Pearlstein, who had covered the subcommittee’s hearing, wrote, under a headline reading, “As Senate Hearing Shows, Cheaters Ever Prosper,” that “Robert Wood Johnson IV, philanthropist and heir to the Johnson & Johnson fortune,” wasn’t given “an old-fashioned grilling.”
In September 2010, forty-eight-year-old Jeffrey Greenstein, who had put together the Quellos operation, pleaded guilty to charges of conspiracy and aiding in the filing of a false tax return in connection with the POINT, the tax shelter that Woody had unsuccessfully bet on to save himself millions in taxes. Greenstein admitted that his scam tax shelters had cheated the IRS out of $240 million. In January 2011, he was sentenced to spend the next fifty months of his life behind bars.
While Woody’s platinum reputation remained intact, his hands clean, his involvement would surely become an issue if he ever did decide to run for elective office.
5
For a National Football League team owner who appeared to live and love football—and football had been very, very good to Woody financially, personally, and as a fun factor—he had been mostly a benchwarmer when he actually played the game (he wore number 81) back in prep school.
“Woody was not a world-beater of a football player,” recalls Arthur Rudman, who was the head coach of Woody’s team, the Mustangs, in Woody’s senior year, 1965, at Millbrook School. “Woody wasn’t a starter, he was our backup tight end, who played some, but probably not as much as he would have liked. We just had kids who were a little quicker. Woody did what I asked him. I’d say, ‘Okay, run into that dummy, or run into that wall’ and he’d do it.”
Rudman had closely followed the lives of some of his Millbrook players who had had successful careers, and he especially followed Woody when he became the owner of the New York Jets. But then bad things began to happen on the team that concerned Rudman and raised in him questions about his former player’s professional judgment as an NFL owner.
All of that began happening around Christmas of 2010 when the Jets’ blustery, rotund head coach, Rex Ryan, and his pretty wife, Michelle, got caught in a foot fetish and swinger scandal that made national headlines. As the New York Post blared: “Tormented Rex Bares ‘Sole’ Over Kinky Feet Vids.” Ryan refused to discuss his lifestyle because “this is a personal matter.”
Woody—who came from a dynasty where one or another of his relatives and/or forebears were involved in some form of kinkiness—presumably had no inkling about Ryan’s naughtiness until the news broke on the popular sports Web site Deadspin. Woody and his people had thoroughly checked out Ryan, presumably both his respected professional life in football and his private life, before he was hired—with Woody making the final decision to bring him on board as head coach.
In the wake of the scandal, Woody had private talks with Ryan, was satisfied with whatever he was told, and let the matter go.
On the other hand, Art Rudman, Woody’s Millbrook prep school football coach, wasn’t as forgiving. After he retired from the game, Rudman had gone from being Head Coach Rudman to Reverend Rudman of the Sebago Lake Congregational Church in Standish, Maine, and had initially been closely fol
lowing with pride his onetime benchwarmer’s career as the owner of the Jets.
But he was clearly upset with the personal interests of Woody’s head coach, his arrogant, egotistical manner, and the fact that Woody didn’t know what was going on. “As a minister, I certainly don’t condone a lot of that kind of sick stuff, and I think Ryan compounds his own problems because he talks too much. And the whole affair made Woody look foolish.”
Plus he was a fan of the New England Patriots, the Jets’ biggest rival.
It wasn’t just the fetish scandal and Woody’s handling of it that disturbed Rudman.
Several other bizarre incidents had beset the Jets in the 2010 season, leaving Woody red-faced, and making the team seem like depraved rock stars.
In October, two months into the season, Deadspin.com published a report that the aging former quarterback Brett Favre had, during his 2008 season with the Jets, sent suggestive text messages and a photo—allegedly of his penis—to a onetime Maxim and Playboy model by the name of Jenn Sterger, who held the title of New York Jets “Game Day Hostess.” The raunchy and boorish seduction attempts made headlines and jokes nationally, and Woody and his Jets were once again scoffed at.
The Johnson heir must have been quietly reeling. What could he possibly say in explanation? So he said nothing.
As Ryan wryly observed in a quickie, ghostwritten memoir in the spring of 2011 about his career in football and working for the Band-Aid heir, “It wouldn’t be the Jets 2010 season without some weird thing happening.”
There was yet another sex-related scandal during that steamy season.
Ines Sainz, a thirty-two-year-old blond stunner, was a sports reporter for the Mexican network TV Azteca and had come to the Jets’ headquarters and practice field in Florham Park, New Jersey, to interview Woody’s handsome young quarterback of Mexican heritage, Mark Sanchez. But Sainz’s interview outfit—skintight jeans and a revealing white button-up blouse—aroused the machismo of the players when she sashayed into the locker room. Instantly, she claimed she felt sexually harassed by what she termed the “grotesque” catcalls and rude language from Woody’s players, their outrageousness becoming the focus of yet another headline-making embarrassment involving Woody and the Jets.
Crazy Rich: Inside the Johnson & Johnson Dynasty Page 3