In 2012 John Delaney (D) got elected to fill the new Maryland 6th district US Congressional seat which was created as a result of gerrymandering by Democrats in Maryland. The newly created district was carved out of Congresswoman Donna Edwards’ 4th district seat, a progressive Democrat who did not toe the line set by corporate Democrats in Maryland, such as Governor Martin O’Malley.
According to Opensecrets.org, Mr. Delaney spent $4.4 million to win the 2012 election, and $2.4 million of this came from his own pocket. His opponent Roscoe Bartlett only spent $1.3 million. In the end, Mr. Delaney used his own money to outspend Mr. Bartlett and buy himself a seat in Congress (http://www.opensecrets.org/politicians/summary.php?cycle=Career&cid=N00033897&type=I#fundraising).
Why would Delaney spend $2.4 million of his own money to buy a seat in Congress? Could it be to further his interests in the banking & financial services industry? And what did the $2.4 million get him?
Delaney got himself appointed to the Financial Services Committee in the House of Representatives, the most lucrative assignment in terms of lobbyist campaign donations. According to Opensecrets.org
This committee, formerly known as the Banking Committee, has long been considered a “big money” panel, with jurisdiction over commercial banks and savings and loans that traditionally have been very generous with their campaign contributions to committee members. That trend has continued with the addition of two cash-rich industries to the committee’s portfolio: insurance and securities. Look for the giant financial sector, which includes banks, insurance companies, and securities firms, to continue its robust giving to committee members
On August 11, 2013 the NY Times published an article about the Financial Services Committee, entitled “For Freshmen in the House, Seats of Plenty”
According to the article:
“…the panel is sometimes called “the cash committee” — a place, critics say, where there are big incentives for freshmen to do special favors for the industry. “
“…freshman Democrats joined this year with Republicans on the committee — over the objection of Ms. Waters and the Obama administration — to support measures advocated by Wall Street banks that would roll back some of the strictest provisions of the landmark Dodd-Frank financial regulations, which were passed in 2010 in the aftermath of the global recession. “ This included Freshman John Delaney http://financialservices.house.gov/uploadedfiles/crpt-113-hmtg-ba00-fc014-20130507.pdf
“One industry lobbyist, who asked not to be named because client matters are supposed to be confidential, said his political action committee was sizing up all of the Financial Services Committee freshmen as it tried to determine who could best help deliver on the industry’s agenda.”
As a member of the Financial Services Committee, the Banking and insurance interests have been very generous to Mr. Delaney. According to Opensecrets.org, his top donors include:
|Capital Source Inc||$89,700||$89,700||$0|
|Patton Boggs LLP||$35,450||$35,450||$0|
|Farallon Capital Management||$23,500||$23,500||$0|
|Capital One Financial||$21,250||$21,250||$0|
|Credit Suisse Group||$18,000||$18,000||$0|
|Madison Dearborn Partners||$18,000||$18,000||$0|
And the top industries donating to him include:
|Securities & Investment||$236,986|
What are particularly troubling are the donations to Mr. Delaney from CapitalSource, Inc. and CapitalSource bank. Mr. Delaney founded Capital Source in 2000.
According to Wikipedia:
[Capital Source is] “a commercial lender that provides senior debt loans of $5 million to $100 million to middle-market companies throughout the United States. The company targets specific industries in its portfolio of holdings, particularly focusing on healthcare companies. As of September 30, 2009, the company had total commercial assets of $10.4 billion and $4.4 billion in deposits. CapitalSource banking services in southern and central California through its wholly owned subsidiary CapitalSource Bank. It was co-founded in 2000 by Executive Chairman John K. Delaney and is headquartered in Chevy Chase, Maryland”
And according to Wikipedia, Mr. Delaney remains on Capital Source’s board of directors, even though he is a member of Congress who sits on the Financial Services Committee. Add to this that in 2003 Capital Source was temporarily converted to a REIT to minimize its tax liability to the Federal government.
It is also troubling that Capital Source was sold to PacWest Bancorp in July for over $2 billion, with Delaney pocketing a cool $69 million from the sale, at the same time Delaney was a sitting Congressman on, you guessed it: the Financial Services Committee.
It is also noteworthy that Mr. Delaney voted against the Amash amendment (along with Maryland corporate Democrats Chris Van Hollen and Steny Hoyer) to defund the NSA’s collection of phone records, while Maryland progressive Democrats Donna Edwards and Elijah Cummings voted for it.
Mr. Delaney’s election to Congress is troubling on a number of levels. Elections are supposed to be a contest of principles, ideas and experience. Elections are now a contest of money raised and by using $2.4 million of his own money Mr. Delaney gave himself an unfair advantage, not unlike doping in sports.
Billionaires and millionaires are purchasing Congressional seats and major newspapers such as the Washington Post. This is incompatible with democracy; it is by definition what is called a plutocracy.
The donations to Mr. Delaney by Capital Source and its sale while Delaney sits on the Financial Services Committee, also raise questions of conflict of interest and potential impropriety.
Delaney’s purchase of a Congressional seat with his own money creates a strong argument for public campaign finance reform, where campaign donations would be restricted to registered voters who are eligible to vote in the race in which they are donating.