The Long Shot
Maryland Congressman John Delaney has spent much of his life taking risks that paid off. Now the Potomac resident is taking his biggest risk-he's running for president.
Elaine Delaney, a homemaker, was ambitious for her only son—Delaney has an older sister, Diane—and silently approved of his after-bedtime flashlight reading under the covers. She would tell John, “The dictionary is the only place you will find success before work.” His mom’s aunt Margaret spent hours reading with young John; for years he used her name as a computer password.
“My mother understood the value of a good education,” Delaney says. “Her brother was a rising star in the medical field, and she saw me going to medical school.” Delaney’s uncle, John (Jack) Wallis Rowe, a pioneer in gerontology who has taught at Harvard and Columbia and served as CEO of Aetna, became his first mentor.
As a junior at Bergen Catholic High School in Oradell, New Jersey, Delaney was one of two students selected for Boys State, an 82-year-old summer leadership and educational program sponsored by the American Legion that mimics the operations of local, county and state government. “He came home a week later and said he’d learned how important it was to dedicate part of your life to public service,” says Elaine, 81, who still lives in New Jersey. Diane jokes that her mother had her room repainted when she moved out, while John’s remains as it was—a shrine complete with his old Boy Scout uniform and some of his toys.
Scholarships from his father’s union, the American Legion, the VFW and the Lions Club enabled Delaney to enroll at Columbia University in 1981. “Stepping on that Columbia campus really changed my life,” he says. He’d lived a very narrow existence in New Jersey. “John was fun-loving but reserved,” says Basil Bruno, a Bergen Catholic graduate who also went to Columbia. “He was very loyal and protective about our group of friends.” Bruno recalls Delaney breaking up a fight by picking someone up and taking him to a corner of the room.
Delaney’s inner circle at Columbia included John Campi, a high school classmate who shared his love for Bruce Springsteen. Campi roomed with Delaney for three years and says his friend was competitive about everything from grades to lifting weights. “Neither of us liked to lose at anything,” Campi says.
All three friends were pre-med students— Bruno is a pediatrician, Campi a dentist—but Delaney later changed majors and decided that he didn’t want to be a doctor. “I worked in the research lab at Columbia Presbyterian medical school the summer after my sophomore year,” he says, “and I looked forward to leaving for my afternoon construction job.” Says Bruno: “John spent a day with his uncle, Jack Rowe, in an operating room, and he came back to school white as a ghost. ‘I just can’t do that,’ he told me.” Another friend, Alex Pitofsky, son of Washington lawyer Robert Pitofsky, who later chaired the Federal Trade Commission, introduced Delaney to the capital, and D.C. immediately appealed to him. After graduating in 1985, he applied to one law school—Georgetown—which was how his parents found out that he had chosen J.D. over M.D. “Law school?” his mother asked dubiously.
“I thought he would make a very good physician,” she says, “but that was my wish, not his.” As it turned out, Delaney didn’t want to be a lawyer, either.
From left: Delaney, his daughter Lily, his wife, April, and daughters Grace and Brooke. Photo by Skip Brown
Delaney treated law school as a means to an end. The Georgetown University Law Center was where he met several of the most important people in his life. As his third year got underway, Delaney and some pals went to Dakota, a popular bar in Adams Morgan. He found himself chatting with a pretty second-year law student named April McClain, and offered her a ride home when it began to rain. At registration the next day, Delaney spotted McClain and helped her choose her classes. Although Delaney had already registered, he waited two hours, went to the registrar’s office, dropped as many classes as he could, and re-registered for the ones he’d recommended to McClain. “I guess it shows how committed I was to my academic career,” he says with a laugh. One of McClain’s roommates joked that she went out on a first date and came back married. In fact, Delaney and McClain were engaged by the end of the year and married a year later, in 1989.
The daughter of a potato farmer in Buhl, Idaho, McClain was more sophisticated and worldly than the young man who grew up in the suburbs of New York City. “She lived in Florence, Italy, during her junior year [of college] at Northwestern,” Delaney says, “while a big trip for me was to Little Italy.”
Delaney married April McClain in 1989 in Sun Valley, Idaho. Archival photos courtesy Delaney Family; photo by Juana Arias/The Washington Post/Getty Images
April brought Delaney along on job interviews around the country, broadening his relatively insular world. She, too, had that striving gene and was ambitious for her husband as well as herself. Delaney’s plan was to become a developer in New York City, but McClain, the Westerner, argued for San Francisco. Both had lived in and enjoyed the pace and livability of Washington, D.C., so the nation’s capital became the compromise.
During his time at Georgetown, Delaney met Ethan Leder, a classmate from Kensington who shared a strong interest in business. Delaney was a natural leader, Leder says, always taking charge of whatever group he joined. But what really motivated his friend was family. “Midway through our second year, school was intense and John disappeared for a day,” says Leder, who now lives in Bethesda. Delaney’s dog, Murphy, a shelter mutt his parents liberated for $7, had died at age 16. Delaney drove home late at night on winter roads to New Jersey and spent nearly four hours carving out a grave on the frozen ground. en he drove back to Georgetown. “I saw him the next day and he looked down,” Leder recalls. “He reluctantly told me when I asked him why.”
Delaney with Larry Brown and Josh Gillion at their graduation from Georgetown University Law Center in 1988. Archival photos courtesy Delaney Family; photo by Juana Arias/The Washington Post/Getty Images
During his third year of law school, Delaney lived at the Papermill condos with Nordberg, who also had the entrepreneurial bug. The young men explored various business ventures—one idea that never reached fruition was an enterprise that would have published printed materials for law firms. “John was always looking for business opportunities,” Nordberg says. “He wanted to chart his own path.”
After a brief stint at what was then the Shaw Pittman law firm, Delaney joined Leder as they dabbled in a personnel franchise and a home infusion business.
Nordberg was retained as outside general counsel. In 1990, Delaney and Leder bought a small, struggling health care firm called American Home Therapies (AHT). “My parents weren’t too happy that I was quitting a well-paying law firm job, and I don’t think John’s were either,” Leder says. “We just decided: We’re going to make it.” In the three years they ran AHT, they concluded that instead of delivering the service, they should be financing the companies that do. “We learned the business by doing it,” Leder says.
The Delaney family at Brooke’s sixth-grade graduation from St. Patrick’s Episcopal Day School in 2008. Archival photos courtesy Delaney Family; photo by Juana Arias/The Washington Post/Getty Images
The sale of AHT in 1993 at a small profit allowed Delaney, Leder and Nordberg to start HealthCare Financial Partners (HCFP), which lent money to health care companies ranging from small hospitals to large medical offices. Delaney had a vision about how the company would evolve, Nordberg says, and he could handle risk. “There are people with vision who don’t know how to execute. He could see the path forward,” Nordberg says. Delaney ran the company for six years, taking it public in 1996 on the New York Stock Exchange, and sold it to Heller Financial in 1999 for about $500 million. Each of the three men walked away with about $40 million.
Delaney took a year to ruminate, then co-founded CapitalSource in Chevy Chase, attracting star investors like Tom Steyer, founder of Farallon Capital Management, who’d also invested in HCFP. CapitalSource, which Delaney launched in 2000 and took public in 2003, lent money to hundreds of small and midsize businesses around the country. Loans ranged from seven to nine figures for businesses including Au Bon Pain and Timbuk2, which sells bags. Jason Fish, who was with Farallon at the time and had assisted in providing investment capital to HCFP in 1994, was co-founder of CapitalSource. Farallon made an investment of $200 million. “My level of confidence in John’s ability to assess a situation is second to none, to break it down and be precise about what needs to be done. He sees every side,” Fish says.
Delaney started HealthCare Financial Partners with Edward Nordberg Jr. (left) and Ethan Leder. Archival photos courtesy Delaney Family; photo by Juana Arias/The Washington Post/Getty Images
In 2006, Forbes magazine ran a business feature with the headline “Loan Shark,” alleging that Delaney and CapitalSource were charging high rates for loans to small businesses, and also avoiding taxes. “It was pretty darned inaccurate, and the author clearly didn’t understand our business,” Fish asserts. “We were making market-rate senior loans to companies that didn’t have other alternatives to borrow.”
Says Delaney: “In an effort to be provocative, they came up with a very misleading headline for what is otherwise a fine story.”
Not everything the company touched turned to gold. CapitalSource backed a private equity fund that bought landfills, failing to grasp the regulatory pitfalls. The
fund was cited by the EPA. Some years later, when Delaney was first running for Congress, April and the couple’s kids were in Bethesda’s Woodmont Grill when a political ad came on TV calling Delaney the “owner of a toxic waste dump.”
“We tried things at CapitalSource that came back as failures,” Fish says. “We used asset-based lending as opposed to cash flow-based lending. We were looking for new areas of growth, and we tried doing asset-based lending that was not health care related—on receivables or inventory—and that’s a very competitive space, and it was just not our strength. We stunk at it.” Delaney resigned as executive chairman when he was elected to Congress, and CapitalSource was acquired by PacWest Bancorp in July 2013 for around $2.3 billion.
In 2011, a year after the 2010 census and resultant gerrymandering had turned the 6th District into a hodgepodge favoring Democrats, Delaney returned home one day and told his wife that he was going to run for Congress.
“What?” April asked, not certain that she’d heard him correctly. Delaney repeated himself, then added, “[Or] do you want to run?” April quickly told him no. Publicly, Delaney said, “I’m 48. I want to do something that makes a difference.” And he repeated a mantra he’d heard as a young man that life should be one-third learning, one third earning and one-third serving. Privately, he admits that he was a little bit bored with business, having spent half of his life creating and running new ventures. Politics would engage his skill set in a public forum.
“As an entrepreneur, I liked taking on new challenges,” Delaney says. He sought the advice of Virginia Sen. Mark Warner, another highly successful CEO who ran
for public office. “Ask yourself how you’ll feel later on in life if you didn’t do it,” Warner told him. That sealed the deal.
Delaney called on a wide network of influential friends. His annual Christmas party has grown from a dozen or so to 800 invited guests mingling under a heated tent next to his 12,000-square-foot, $4.5 million Potomac home near Congressional Country Club (his house actually sits two-tenths of a mile outside of his district). Among the guests, one might spot venture capitalist Steve Case, Chief Justice John Roberts, former National Economic Council director Jeffrey Zients, or Cardinal Theodore McCarrick. (McCarrick once asked Delaney if he was too old for a BlackBerry. Delaney sent him one the next day and helped teach McCarrick how to use it.) “I was a little surprised when John ran for Congress,” says his friend Tucker Carlson, the conservative pundit, “but he’s a person who knows everybody.”
During his three terms in Congress, Delaney has focused on America’s economic competitiveness in the world market. He’s proposed an innovative plan to finance infrastructure improvements with loans to local governments and bonds sold to corporations that would be allowed to repatriate a certain amount of their overseas earnings tax-free for every dollar they invest in the bonds.
Although the redrawing of the 6th District favored Democrats and aided his election, Delaney has introduced legislation to end partisan gerrymandering. The Open Our Democracy Act of 2017, which he is sponsoring, would require that states establish independent commissions for congressional redistricting, make Election Day a federal holiday and create a primary system devoid of party affiliation. Delaney is considered by many to be one of the least partisan members of Congress; his legislative proposals often draw co-sponsors from the GOP.
Delaney plans to spend a lot of time in Iowa and New Hampshire, the early primary states that can make or break a candidate. The biggest surprise of his campaign thus far, he says, “is that people in those states were ready to talk about 2020. We were a little concerned they would say, ‘It’s a little early—come back in a year.’ You can’t make someone talk about something they don’t want to talk about—I’ve tried with my kids.”
Delaney’s 25-year-old daughter, Summer, a journalist who works for a TV station in New York City, told her father that he shouldn’t eat in public when he visits Iowa. “They’ll take silly pictures of you eating food,” she said. Beginning with the Super Bowl in early February, Delaney launched a $1 million, four-week TV ad campaign in Iowa.
One aspect of the campaign that Delaney cannot control is public exposure. Friends talk about how protective Delaney is of his wife and children. Steve and Susie Canton met the Delaneys through the Church of the Little Flower in Bethesda, and their families have been close for years, often vacationing together. During a trip to Italy, Delaney rented a coach to transport both families. “The driver was speeding on these winding roads and the kids were getting sick, but the driver didn’t seem to care,” Steve Canton remembers. “At our next stop, I thought John was ready to [fight]. He told the driver, ‘If you don’t slow down, we’re going to have a problem.’ Believe
me, there was no language barrier.”
Delaney’s friends concede that his protective nature could be a liability in a hard campaign. “Running for president can really hurt you,” Tucker Carlson says, “and I really hope John avoids that.” Katherine Bradley says the Delaneys “probably believe they are a strong enough family to weather the campaign.” Delaney insists that his eyes and his wallet—he won’t say how much he’s willing to spend—are wide open. He claims to be savvy about the rigors and intrusiveness of a presidential campaign, but won’t speculate further about the emotional toll. “People I spoke to generally assumed I knew what I was getting into,” he says. “It’s a tough process…you’re a public figure.” Asked about fears of media scrutiny and hardball tactics from other candidates, Delaney’s wife concedes that one of their daughters is apprehensive about the campaign.
If the outcome in the early primaries is promising, the Delaneys are considering renting a mobile home and crossing the country to campaign. “We’re doing this as a family,” says McClain-Delaney, adding that their financial situation gives them the freedom to say what they believe. “We’ve got our lane; we’re going to swim hard.”
Steve Goldstein is a freelance writer and editor. To comment on this story, email firstname.lastname@example.org.