John Delaney: The Candidate Who is Crashing the Party

Maryland Democrats initially didn’t want John Delaney to run for Congress. Yesterday he succeeded in unseating ten-term incumbent Roscoe Bartlett.
If Delaney wins, he’ll be one of the wealthiest members of  Congress. Photograph by Bill Clark/CQ Roll Call/Getty Images.
If Delaney wins, he’ll be one of the wealthiest members of Congress. Photograph by Bill Clark/CQ Roll Call/Getty Images.

UPDATE 11/07/12: Yesterday John Delaney defeated Republican incumbent Roscoe Bartlett. Here’s our October 2012 profile of him.

John Delaney wasn’t supposed to be the Democratic nominee in
Maryland’s 6th Congressional District.

That role was intended for Rob Garagiola, the 40-year-old
state-senate majority leader from Germantown, a tall, handsome progressive
whom party leaders in Annapolis had given the green light last
fall.

Unlike Garagiola, Delaney hasn’t paid his dues in lower office.
His career in finance has progressives leery, and his message of
invigorating the private sector in Maryland to create jobs has others
fearful he’s a closet Republican.

If Delaney wins the seat, he’ll be one of the wealthiest
members of Congress—probably in the top five, with somewhere around $200
million in assets made from two financial companies he founded and built
in Chevy Chase.

Garagiola’s supporters painted him as a rich, out-of-touch
“1-percenter.” And with income averaging $14.5 million over the last seven
years, he’s not just in the top 1 percent—he’s in the top 0.1
percent.

But after a nasty, expensive primary campaign that party
leaders tried to squelch, Delaney is now given a strong chance of helping
those same Maryland Democrats pick up another House seat.

The race wasn’t in the immediate plans of the wealthy Potomac
entrepreneur until a gerrymandered redistricting proposal stirred him into
action last fall, and it certainly wasn’t in the plans of the Democratic
establishment that had redrawn the district lines with someone else in
mind.

Yet Delaney’s run for office came as no surprise to some of his
closest friends, including David Bradley, head of the Atlantic Media
group, who says Delaney has been “playing with this question for at least
a dozen years.”

He has “the striving gene,” says Bradley. “He’s been on a
vertical run through life.”

Hungry to capture another US House seat in Maryland, Democratic
leaders had put a target on the back of Roscoe Bartlett, the 86-year-old
Republican incumbent. They handed the bow and arrow to
Garagiola.

Leaders had first looked at how to reclaim the 1st
Congressional District on the Eastern Shore, but that proved too
difficult. Instead they dumped hundreds of thousands of new Montgomery
County constituents into the 6th and lopped off large swaths of
conservative voters who reliably supported Bartlett.

“I had never heard of John Delaney,” Garagiola says. But other
Democrats had, in particular those who had benefited from substantial
contributions from Delaney and his wife, April. In recent years, the
couple had given at least $183,000 to the national party and candidates
and $83,000 to the state party and candidates, some of whom were now
backing Garagiola, including Maryland governor Martin O’Malley and
lieutenant governor Anthony Brown.

The Garagiola forces were quick to attack Delaney’s business
record. They defined him not as the job-creating innovator he portrayed
himself to be but as an unscrupulous banker who preyed on others, financed
substandard nursing homes, and foreclosed on mortgages. Delaney, who went
to Columbia University on a scholarship from the electricians’ union his
father belonged to, was even portrayed as anti-union.

“What the establishment was trying to do was to position me as
a Republican running in the Democratic primary,” says Delaney, who does
have Republican friends and contributors and has given to a few Republican
candidates, such as Congressman Andy Harris. “I believe in the free
market. I believe that business creates the jobs in this country and not
government.”

Spouting such heresy, Delaney attacked Garagiola as a
Washington lobbyist and incumbent legislator far too cozy with Annapolis
special interests. Garagiola hurt himself by failing to disclose some of
his past lobbying income.

Garagiola garnered dozens of endorsements. But four weeks
before the April 3 primary, Delaney laid down two cards that trumped them
all: He was endorsed by President Bill Clinton, followed a few days later
by the Washington Post.

Delaney and his wife had been bundlers for Hillary Clinton’s
presidential campaign, and he had been a Clinton delegate to the
convention that nominated Barack Obama.

“The party of President Clinton is the party that I identify
with,” Delaney says. “Suddenly my message had credibility. I was a
Democratic candidate speaking to voters in language that they had
forgotten about.”

The Post endorsement stressed Delaney’s theme of job
creation and lambasted Garagiola’s connections to special
interests.

At the same time, Delaney was shoveling his own money into the
campaign, eventually $1.6 million in loans, most of it at the beginning of
March as he began dominating TV and radio.

Garagiola was no slouch at fundraising, bringing in more than
$700,000. But Delaney spent more than three times that.

In the end, the two candidates, with three other rivals, spent
$4 million-plus competing for just 38,000 votes cast. Delaney got 54
percent of the vote, trouncing the three-term state senator by spending
$135 a vote. Garagiola received 29 percent, spending $66 a
vote.

Comptroller Peter Franchot, the only statewide elected Democrat
to endorse Delaney, said the party establishment “got a real punch in the
nose.” Franchot, a persistent pain to party bigwigs on fiscal issues, said
it was Delaney’s emphasis on job growth that drew his support.

“Tammany Hall was all behind Garagiola,” Franchot says. In an
off-season spring primary, “the Democratic machine generally
prevails.”

But not this time.

If Delaney wins, it will be the latest in a string of successes
that had him taking two financial-services start-ups public by the time he
was 40. At 32, he was the youngest CEO of a company listed on the New York
Stock Exchange.

Delaney grew up in Wood-Ridge, New Jersey, not far from
Meadowlands Sports Complex, attending public schools and then Bergen
Catholic High. His father, Jack, was a union electrician and his mother,
Elaine, a homemaker. John worked construction in the summers.

Neither parent had gone beyond high school, but “my mother
wanted me to be a doctor,” Delaney says. So he went off to Columbia with
scholarships from the International Brotherhood of Electrical Workers, the
American Legion, and the Veterans of Foreign Wars. After working briefly
at St. Luke’s Hospital in New York, he decided medicine wasn’t for
him.

“I basically applied to law school as a way of telling my
parents that I wasn’t going to medical school,” Delaney says.

That’s how he wound up at Georgetown Law, where he met both his
future business partners and his wife-to-be.

He was hired at Shea & Gould in New York, where he had
interned. But just as he was about to move, he got engaged to April
McClain
, a year behind him at Georgetown. She’d grown up on an Idaho
potato farm about half the size of the Bethesda Zip code. She didn’t want
to live in New York, and John didn’t want to head west, so they made their
life in DC.

After a brief time practicing at what was then Shaw Pittman,
Delaney and two friends from Georgetown Law, Ethan Leder and Ed Norberg
Jr.
, put lawyering aside and in 1990 bought a small health-care firm
called American Home Therapies.

Learning as they went, they managed to build the company and
then sell it three years later. “It gave us insight into the field that we
were going to finance,” Leder says.

The men then set up HealthCare Financial Partners, specializing
in the financing of small health-care firms. Delaney realized that with
changes in federal law, big banks were going to concentrate on consumer
lending and investment banking. This created a niche for lending to small
firms, especially those health-care companies whose assets were largely in
receivables owed to them by insurance companies and government
agencies.

They took the firm public in 1996, then sold it to Heller
Financial in 1999 for $500 million. In 2000, by this time with three young
daughters, the Delaneys moved from the District to a $4.5-million home off
River Road in Potomac and John started the company he still chairs,
CapitalSource. That company, too, was aimed at lending to small and
midsize businesses that big banks had abandoned, and it went public in
2003. Since the 2008 purchase of a California bank with 22 branches, much
of the company’s business is now as a federally regulated
bank.

Delaney also became part of the region’s nonprofit world, which
is always on the lookout for leaders who can provide both guidance and
financial support. Today he’s on the boards of Georgetown University, the
National Symphony Orchestra, and the Potomac School and is past chair of
St. Patrick’s Episcopal Day School, which his children
attended.

Few images show the couple’s connections quite as graphically
as the photo that ran on the Catholic Charities website this spring
promoting its annual gala, a black-tie event John and April cochaired for
two years. The photo shows the Delaneys smiling with Cardinal Donald Wuerl
and Supreme Court chief justice John Roberts and his wife,
Jane.

“John and Jane are very good friends of ours,” says April
Delaney, who like Jane Roberts, another Georgetown Law alum, worked as an
attorney on satellite communications. Their daughters were in a baby group
together, and the families are members of Little Flower Parish in
Bethesda.

“We actually have a lot of Republican friends,” says April.
“It’s a good thing to be bipartisan sometimes in this town.”

John Delaney has a comfortable life, wealth, connections, and
institutional leadership in the nation’s capital. Yet he’s angling to
become a freshman member of an exceedingly dysfunctional body that
requires reapplying for the job every two years.

“The stakes are really high” in the country right now, Delaney
says. He thinks he can help break the gridlock and political instability
that he believes is holding back economic growth. “I would feel really bad
about myself if I didn’t give it a shot.”

Last year, he started a nonprofit called Blueprint Maryland to
create a dialogue about job growth. It represented a deeper dive into
Maryland policy than he had taken before. The political contributions,
fundraising, and civic engagement had been going on for years, but “we
never thought we would jump in right now,” says his wife, who seems to
have embraced the candidacy as a joint venture. “Maybe five or ten years
from now.”

The congressional redistricting spurred them to action, even
though their home is two-tenths of a mile outside the 6th District. At one
point, April Delaney says, she told her husband: “If you don’t run for
this seat, maybe I will.”

John Delaney favors the approach of President Obama’s
Bowles-Simpson budget commission on fiscal responsibility: “We can’t
really have a debate about whether we can be fiscally responsible any
longer.”

He says raising capital-gains taxes, closing loopholes,
reducing defense, and lessening the future burden of Social Security and
Medicare, as prescribed in Bowles-Simpson, will help create a political
stability that “would be more powerful than any stimulus the government
could provide.”

But before Delaney can tackle those huge sticking points, he
has to overcome an obstacle more difficult than grabbing a slice of market
share from the big banks. He must beat ten-term incumbent Roscoe
Bartlett.

Many in his own party thought Bartlett should retire
gracefully. He was confronting a gerrymandered district with a large
contingent of Montgomery County Democrats he had never represented and a
presumably strong opponent in Garagiola. It would probably be the toughest
fight he had faced since winning the seat in 1992. Bartlett was already 66
years old when he won that race, and at 86 he’s now the second-oldest
member of the House.

Born dirt-poor in Kentucky, Bartlett had a career as a
scientist, teacher, and researcher, with 20 mostly government-owned
patents on lifesaving breathing equipment. Bartlett has always been an
unconventional Republican and has long backed energy solutions that reduce
dependence on fossil fuels. As an entrepreneur in his own right, he ran a
research consulting business that branched into construction and built 100
homes, many with solar power.

The father of ten with his wife, Ellen, Bartlett is modestly
wealthy as Congress members go, with as much as $8 million in assets, and
lives on a farm along the Monocacy River near Frederick.

Though allied with the Tea Party, Bartlett practices a quirky
brand of politics. At a June ceremony in Cumberland, part of the
economically depressed western end of the 6th District, he gave a brief
talk about the science behind the cool shade his audience was enjoying
under an old tree, then described the awesome display of 23,110 luminary
candles at Antietam National Battlefield that will mark this year’s
bicentennial of the bloodiest single day in American history. Then he
turned to the $1 billion in debt the US amasses every six
hours.

“It’s easy to get depressed and despondent when we think of our
polarization,” Bartlett said. “Shame on us if we can’t face the challenges
facing us.”

He gave mixed signals last year about his commitment to running
for reelection and got a slow start on fundraising, which partially led
two legislators to challenge him in the Republican primary. A majority of
the western Maryland Republican legislators supported state senator David
Brinkley against Bartlett, but the incumbent easily won the primary with
44 percent of the vote against seven opponents.

“There’s a history of underestimating Roscoe Bartlett,” says
Maryland GOP chairman Alex Mooney, a former state senator who briefly
considered running for the seat himself when Bartlett’s plans seemed
unclear. Mooney now works for Bartlett’s congressional office
part-time.

Bartlett must clearly win the older parts of the district that
know him well and, as one consultant put it, “stay in the ball game” in
Montgomery County, where neither candidate is well known.

Delaney’s advantages are clear. Unlike Bartlett or Garagiola,
he has no voting record to defend, and he can play to the anti-incumbent
feeling in both parties. Delaney’s emphasis on job creation can appeal to
moderates and conservatives, and coming from a union family is a point he
plays up. Republicans are getting ready to probe the possible underside of
Delaney’s business practices, such as predatory lending and profiting from
foreclosures, but these tactics didn’t seem to work for
Garagiola.

Delaney has shown he can tap into a large donor base to match
his own efforts. Friends who have already given to the campaign will no
doubt be asked for more, as will his former and current business
associates. Two dozen CapitalSource employees contributed almost
$50,000.

Delaney’s campaign manager, Justin Schall, has said the banker
will put no more of his own money into the race. But Mooney scoffs at
that, saying odds are he’ll put in millions more.

Other wealthy people running for high office for the first time
have squandered millions on races in Maryland and other states, but
Delaney seems better prepared to do battle. Virginia’s Mark Warner has
shown the path on the other side of the Potomac.

April Delaney says people tell her, “I don’t know why you would
want to do it, but God help you for trying.”

Len Lazarick (len@marylandreporter.com) is editor and
publisher of MarylandReporter.com, a news website about state government
and politics that he founded in 2009. MarylandReporter.com staff writer
Glynis Kazanjian contributed to this article.

This article appears in the October 2012 issue of The Washingtonian.

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