The millionaire CEO running for CongressNovember 5, 2012: 11:44 AM ET
And guess what? John Delaney, a Congressional candidate in Maryland, is a Democrat.
By Tory Newmyer
FORTUNE -- John Delaney, a self-made multi-millionaire financier running for Congress in Maryland, rose to the stage of an all-black Methodist church last Sunday. He was there to win the crowd, but spared them the hard sell, merely stating that, as a Catholic, he felt called to serve the public. "One day I hope to see St. Peter," he told the congregation, "and I don't want to tell St. Peter about my business career. I want to tell him what I did for other people."
It is Delaney's first go at politics and he appears on track to win—though the latest poll showed a closer-than-expected race most independent handicappers still expect him to rout the 10-term incumbent, Rep. Roscoe Bartlett, a Republican and founding member of the Congressional tea party caucus. Part of Delaney's edge owes to the fact that he's running in a redrawn district, one that the Democratic party poobahs had carved for someone else: a longtime state senator named Rob Garagiola who ran a shaky primary campaign. Delaney trounced him, shocking the Maryland political establishment. But the Democratic old guard quickly recognized the 49-year-old chief executive as both a good fit for the wealthy Washington suburbs they adjoined to the district and a valuable new emissary to a corporate world that's grown wary of the party.
If Delaney wins tomorrow, he'll become the only member of the House who's served as CEO of a publicly-traded company (Democratic Senator Frank Lautenberg of New Jersey helmed Automatic Data Processing (ADP) when it went public in 1961). It's a role he's performed twice, both for companies he founded: first, for HealthCare Financial Partners, which lent money to for-profit health care providers; then for CapitalSource (CSE), which makes loans to mid-sized businesses ignored by the big banks.
Delaney would also vault into the uppermost ranks of the wealthiest Members of Congress. His net worth is estimated at $264 million. And unlike many of the richest lawmakers, he made his own fortune, rather than marrying into or inheriting it. Indeed, Delaney grew up working class in northern New Jersey, the son of an electrical worker who never went to college.
All of that adds up to a potent profile for a newcomer to a party that's had a bumpy relationship with the business community in recent years and is still struggling with how to address the income gap without sounding hostile to those on its high end. Delaney knows this. He's baked it into his central pitch to voters: Elect me, he says, and I'll work to ensure businesses and workers alike are prospering. Less clear is whether he's got a grasp on how to balance his rock-star potential against the hard, immediate reality he'll be facing if he wins. He'll arrive on Capitol Hill a freshman backbencher in the lower chamber's minority party, the equivalent of plankton in the Congressional food chain.
"I'm sure he's aware of it," says Steve Case, the AOL co-founder and Delaney associate. "And I'm sure when he gets in it'll be harder than he imagines to get his footing and build the relationships and try to start having an impact sooner rather than later. It helps that he's got a significant skill set for the front-burner issues facing the nation — the deficit, the economy, jobs. I would hope and expect people look to him."
At the Goshen First United Methodist Church in Gaithersburg — 29 miles from downtown Washington and smack in the middle of the new, Democratic portion of the district — Delaney cuts an incongruous figure in his Squawk Box-ready suit. But as the service gets under way, the candidate and his wife, April, are front and center, bobbing and clapping to the pew-rattling gospel. He's here today so the state's African-American Lt. Governor, Anthony Brown, can lay hands on his candidacy. After about a half-hour of music, Brown offers an introduction-cum-endorsement, reminding the congregation of Delaney's blue-collar background and declaring that he'll be a loyal lieutenant for President Obama. Delaney himself keeps it brief, explaining why he wants to serve and concluding with a Jesuit prayer about measuring wealth in terms of God's grace.
From the church, Delaney heads north through rolling farmland into the thick of the old district: solidly Republican territory that has sent Roscoe Bartlett to Congress for the last 20 years. Delaney and Bartlett are set to square off in their sixth and final debate in Frederick, Barlett's hometown. At 86, the Congressman is the second-oldest member of the House, and a committed survivalist with a stocked cabin in the West Virginia woods. He's also worked as a scientist, engineer, inventor, dairy farmer, and homebuilder. And he frequently stakes out positions at odds with party orthodoxy, speaking out forcefully about the dangers posed by man-made climate change and the need to develop alternate energy sources.
On the way to the debate, Bartlett's car gets rear-ended, and he uses his opening statement from the stage at Frederick Community College to explain how he's nursing a headache and maybe should have gone to the hospital. What follows isn't much of a debate. Delaney delivers crisp, technocratic answers from the centrist hymnal while Bartlett reels off rambling discursions tenuously related to the topics at hand. On restoring jobs, Delaney argues policymakers have been too narrowly focused on tax rates and the size of government, when what's needed is a broader conversation about the twin roots of our employment challenge—globalization and rapid technological advances. To meet it, he says we need to tackle the deficit with a mix of entitlement cuts and new revenue, hike educational attainment, adopt a national energy policy, invest in our infrastructure and reform our immigration system. Bartlett counters by saying that the recession occurred because oil supplies peaked.
The irony of Delaney's background, in a year when another financier is leading the GOP ticket, hasn't been lost locally. When the Maryland Gazette endorsed him, the paper declared that Delaney "is not a normal Democrat. His capitalist background has more in common with Republican presidential candidate Mitt Romney than President Obama." Delaney draws a distinction, explaining that as an entrepreneur making loans to young businesses, his private sector experience has been dedicated to growing capital, where Romney's private equity work at times meant shrinking businesses. Delaney's status as a financial industry baron nevertheless could carry risk—but during the debate Bartlett doesn't appear temperamentally or ideologically disposed to capitalize. Asked about the right approach to government regulation, Bartlett serves up this political hemlock: "The people who know the most about banking are the bankers. The people who know the most about what regulations are needed are bankers. The people that are hurt the most when there is a banking problem are bankers. And I'm amazed that they are not more involved in the development of regulations."
After the debate, a short drive through a light drizzle takes Delaney across the campus to a get-out-the-vote rally. There he meets Maryland Reps. Steny Hoyer, the No. 2 Democrat in the House and the dean of the state's Congressional delegation, and Chris Van Hollen, the top Democrat on the Budget Committee. Hoyer, who backed Delaney's primary opponent, tells the room that Republicans have become a European-style fringe party and that with Delaney they "have an opportunity like few districts in America to elect somebody who is exactly the opposite of a rigid, confrontational, non-compromising individual."
The tableau of the three men arrayed at the front of the room suggests something of the challenge Delaney will face if he wins. The Old Line State delegation is small but mighty. In a Democratic caucus highly sensitive to its internal identity politics, it's worth considering how much more room at the top his colleagues will allow for another white man from Maryland. And Delaney's ambitions clearly lie beyond the local. While he emphasizes that he's going to pick his spots, he says that "the issue that I want to take on as much as possible is U.S. competitiveness," and that he has "a general plan for how to mobilize forces nationally to work on it."
It could happen. Says one top Democratic aide not prone to hyperbole: "He's going to be like nothing we've ever seen in our caucus." Delaney acknowledges what many businessmen-turned-pols do not — that there is nothing easy or intuitive about the transition. "When I started doing this, I don't think I was very good at it," he says. But he has been methodical about the project, laying the groundwork for his run by founding a nonprofit called Blueprint Maryland, to forge long-term plans for job-creation in the state. Its output has formed the backbone of his platform, including how to prepare for waning federal largesse by tuning up workforce training and attracting new industries. And Delaney's fundraising is legendary. He raised about $800,000 for Hillary Clinton's 2008 presidential bid — and scored a key endorsement from Bill Clinton before his own primary this year — and has outspent Bartlett by more than three-to-one, thanks in part to nearly $2 million from his own pocket.
Delaney could hardly have chosen a more consequential moment to make the leap. The next Congress is on track to serve up a crash-course in policymaking to its newest members by making a host of long-deferred decisions, early on, about the size and scope of government. Stu Rothenberg, the nonpartisan political handicapper, rated Delaney one of the more impressive candidates he met this cycle. And yet he said the transition from CEO to Congressman could be rough. "I don't think he's any different from anybody else," Rothenberg said. "I often say to them, 'Why the hell do you want to do this? What makes you think you can get stuff done? You think a hundred other people like you haven't come to the House thinking they're going to do something?' And I'm not being critical of him." Tom Steyer, a longtime friend of Delaney's and the outgoing founder of the San Francisco hedge fund Farallon Capital Management, acknowledged it will be a test. "It could be it takes a while to adapt," he said. "I can only say he's very adaptable."