Tom Steyer’s Gubernatorial Campaign in California

Democratic billionaire Tom Steyer is making significant headway in the California gubernatorial race, bolstered by a highly progressive platform that emphasizes combating wealth inequality.

The former hedge fund manager has urged fellow billionaires to support initiatives like single-payer healthcare and has openly criticized the sway of the wealthy in political elections. Earlier this year, he declared that, if he wins, he would put an end to spending by corporate political action committees.

In a recent campaign advertisement, Steyer stated, “Companies that make people’s lives too expensive thrive on the status quo. It’s time for California to prioritize its citizens over lobbyists.”

However, there’s an interesting twist. Steyer himself earns substantial income from private equity funds, which often exploit the same tax loopholes he condemns. Recent tax filings reveal that he and his spouse bring in a remarkable $39 million annually, surpassing the combined income of all his opponents.

As a major contributor to the Democratic Party, Steyer has also been linked to various “dark money” groups that do not disclose their funding sources. He has publicly stated that such organizations have no place in American politics.

This raises questions about the image he aims to project as a champion of the working class in a race dubbed “billionaire against billionaire.” Politico captured this sentiment well in their description of his campaign.

Financial Background

According to his tax returns, Steyer earned $67 million in 2021 through U.S.-based private equity funds, including those managed by Hellman & Friedman and Golden Gate Capital. His investment firm, Galvanize Climate Solutions, is also said to utilize strategies that benefit from tax-advantageous jurisdictions.

The candidate faced scrutiny in his previous presidential bid regarding his hedge fund’s practices, as it was revealed that Farallon Capital had plans to leverage offshore entities for tax benefits.

In response to inquiries about his financial activities, Steyer’s campaign explained that he pays all U.S. taxes on income derived from these investments, though a third-party manager technically decides fund placements.

Dark Money Involvement

Steyer founded NextGen America in 2012, a progressive advocacy group and political action committee that does not disclose its donors. Notably, in 2014, he invested $67 million through NextGen to influence several Senate and gubernatorial races. This organization focuses on mobilizing young voters.

In 2018, alongside fellow billionaire George Soros, he contributed $11 million to State Victory Action, which collaborated with the State Engagement Fund — another group managing undisclosed contributions to state political committees across multiple states.

Steyer is also involved with the Democracy Alliance, a collective of high-profile liberal donors who coordinate their political donations. Members of this group contribute at least $200,000 annually, allowing them to pool resources for charitable organizations that also operate without donor disclosure.

Interestingly, Steyer has recognized some contradictions between his political stances and his investment choices, saying, “I get that it’s ironic. It’s ironic for me as well. We live in this reality, not the ideal one we wish for.”