As Gov. Jerry Brown used his inaugural address in January to call for broad changes to fight climate change, billionaire environmentalist Tom Steyer nodded approvingly from the Assembly gallery.
Steyer was back at the Capitol three months later, testifying for legislation by Senate President Pro Tem Kevin de León that encapsulates some of the governor’s greenhouse-gas reduction goals.
The next month, the former hedge fund manager stopped off at a Chevron station in San Francisco, where he implored state senators to subpoena oil company executives who refuse to answer questions about their pricing and practices.
“It’s time to put an end to the Big Oil giveaway,” Steyer said, turning to a phrase he often uses, “and start giving Californians a fair shake.”
Steyer, 58, has been held up nationally as the left’s answer to the conservative Koch brothers, a comparison that persists despite Steyer’s protest that they are in it for personal financial gain and he is not. Largely through his NextGen Climate Action super PAC, Steyer contributed about $74 million nationally last year to candidates who pledged to address global warming, with mixed results: Of the seven statewide races, his preferred candidates lost four and won three.
In California, however, the self-described “active citizen” in his trademark plaid tie has experienced few, if any, political setbacks as he drives his current agenda. Steyer, who amassed a fortune as a relentless investor, including in firms that produce fossil fuels, is now working to save the planet. His mutually beneficial partnership on climate change with de León and Democrats is succeeding both in the Legislature and at the ballot box.
In 2012, Steyer spent $30 million and teamed with de León to pass Proposition 39, which closed a corporate tax loophole and directed the money to energy-efficient upgrades at schools and other buildings. The two share a political strategist and have developed a friendship. Last year, de León encouraged Steyer to contribute $1 million to Democratic voter registration efforts.
It was at the Steyer-hosted climate leadership forum in Oakland that de León committed to introducing a proposal requiring California’s large pension funds to divest their coal holdings. Others attending the event were Brown, Air Resources Board Chairwoman Mary Nichols, Assembly Speaker Toni Atkins and University of California President Janet Napolitano.
Last month, Steyer was in West Sacramento preaching coal divestment to the board of the California State Teachers’ Retirement System.
Testifying for de León’s Senate Bill 350, which would require the state to generate 50 percent of its electricity from renewable sources, reduce petroleum used by cars and trucks, and boost the energy efficiency of buildings by 2030, Steyer argued it would strengthen the economy by spurring new investments and creating good jobs.
“For too long the oil companies that make billions in profits from California consumers have claimed that sustainability is not compatible with a strong economy,” he told senators at their energy committee meeting.
Daniel Kammen, a professor of energy at UC Berkeley, said Steyer has done a brilliant job basing his public work on the best-available science of climate change, as well as on opportunities to deploy energy efficiency and renewable energy to address economic, security and environmental needs.
“Tom’s efforts to be a social and political advocate for people and the environment, and against fracking and climate deniers, is both critically needed and generally neglected,” Kammen said. “He is bringing the fight to the naysayers, which puts Tom at the forefront of leaders in this arena.”
Steyer is seen as a possible future candidate for statewide office and flirted with a run for the U.S. Senate seat coming vacant with the retirement of Barbara Boxer. He went as far as promising to serve just a single six-year term if the country didn’t commit to goals on the environment, economy and education.
When he opted not to run, he said his work should not be on the nation’s capital but in California and in states “where change is on the move.”
Kevin Spillane, a Republican political consultant, characterized Steyer’s public deliberations ahead of the would-be U.S. Senate run as unimpressive and suspects his involvement at the state level is designed to bolster his policy résumé ahead of a possible campaign for governor in 2018.
Steyer still needs to show he’s not “just another rich guy who wants to buy himself a major office,” Spillane said.
California’s push to address climate change, the most aggressive of any state, predates Steyer’s involvement. In 2006, California enacted AB 32 by then-Assemblywoman Fran Pavley and Assembly Speaker Fabian Núñez, both Democrats, and signed by Republican Gov. Arnold Schwarzenegger. The measure requires the state to cut its greenhouse gas emissions to 1990 levels by 2020.
Nichols’ introduction to Steyer came in 2010, when he emerged as a leading fundraiser and spokesman against an effort to suspend the law. She said he has also extended the state’s efforts at the national level by using his considerable resources in the political process in ways officials here couldn’t do.
“People who want to try to put him in a box always want to dismiss him as somebody who is just looking to position himself to run for something, usually for governor,” Nichols said, adding, “I have no idea what he dreams of. But I can say that none of his method of operation, or my experience of working with him, has shaken my sense that this is a person who is really sincere in his commitment to the issues. And, also, he’s just a very good guy to work with.”
As Steyer’s profile builds, scrutiny from oil industry and business groups is intensifying. It will grow as he contemplates placing an oil-extraction tax on the 2016 statewide ballot.
Californians for Energy Independence, a coalition made up mostly of petroleum companies and business organizations, formed after Steyer wrote a December 2013 opinion piece in the San Francisco Chronicle saying that one New Year’s resolution should be to “close a loophole unique to our state that allows oil companies to siphon California resources without providing any meaningful return to Californians.”
“He’s talked about enacting higher oil taxes, or restricting domestic production, policies that both could drive up energy costs in California,” said Sabrina Lockhart, a spokeswoman for the group, which also has questioned whether the climate-change legislation Steyer supports would benefit his green investments.
“We don’t know for certain because he hasn’t made his tax returns public or been clear on his other investments that could answer those questions,” she said.
Sitting at a coffee shop across from the Capitol one recent morning, Steyer said that he has taken all of his green-energy investments, which he called small but crucial to understanding the cutting-edge sector, and put them in a foundation so any profits go to the community.
“We will never profit from them,” he said. “And we have done that explicitly so that people who make that illogical and false charge are not wrong but 100 percent wrong,” he added.
In various forums, Steyer also has noted the promise he and his wife, Kat Taylor, the founders of a community bank, made to donate much of their assets to philanthropic endeavors through the Warren Buffett-Bill Gates Giving Pledge.
Republicans nationally have focused their disapproval on his past investments in companies that operate coal-fired plants. Steyer, who left Farallon Capital Management in late 2012, personally divested from fossil fuels last summer, calling it his version of a “Paul on the road to Damascus conversion.”
He once recalled a story in which his brother, Jim, a child advocate skeptical of business people, described Steyer’s passion on the environment as being “surprising – like a talking dog. ... It’s not that he does it well. It’s that he does it at all.”
The transformation began some five years before he departed from the firm. He said he didn’t leave sooner because he was dealing with the global economic recession and wanted to keep Farallon running out of loyalty to scores of customers and employees. The work on energy and climate change, which he described as a “human issue,” dovetailed with his position on the board of Stanford University.
“I came to the intellectual and emotional decision that this was going to be the overriding issue for our society,” he said. “... I honestly felt as if I wanted to have a different relationship to society than just running a business and being profitable.”
For Steyer, who has been successful on two high-profile ballot measures, the need for an oil-severance tax has become a familiar refrain, one he’s made in speeches and talks with activists at consecutive state Democratic Party conventions. He rejects the notion that gas prices would rise for consumers, calling it a false implication that seems superficially attractive and plausible but is wrong. That’s because gasoline prices are set by the global market, he said.
In May, he announced he is weighing pairing an oil tax with the requirement that oil companies disclose more information about their pricing and operations.
“There is a huge human justice issue here about whether hardworking Californians are paying way too much for gasoline and the companies are being able to manipulate it at their expense and triple their profits,” Steyer said at the time.
On the possibility of launching an initiative, he now points to the crazy quilt of possible competing levies, from measures dealing with sales and income to split roll to tobacco taxes, and he said he remains uncommitted to 2016.
He said he learned a lesson three years ago observing the wealthy attorney Molly Munger unsuccessfully pursue her Proposition 38 tax initiative at the same time Brown was pushing his similar Proposition 30.
“You don’t want to be a spoiler,” Steyer said.
Joining his crusade against oil companies is Santa Monica Consumer Watchdog, a group that awarded him its Phillip Burton Public Service Award in 2011.
Jamie Court, the president of Consumer Watchdog, said the “beautiful thing” about Steyer is that he’s married his passions for environmental and social justice. The group’s recent push to expose possible gas price manipulation, he said, would not have received the traction it did without the influential ally.
“You can show up with all the data you want, but if you show up with Tom Steyer, people will listen,” Court said, “and that’s not because he’s such a big donor, but because he’s pure and speaks truth to power.”
- Age: 58
- Party: Democratic
- Residence: San Francisco
- Education: Master’s degree in business administration, Stanford Graduate School of Business, 1983; bachelor’s degree in economics and political science, Yale University, 1979.
- Experience: Founder and president, NextGen Climate, 2013-present; co-founder, OneCalifornia Bank and OneCalifornia Foundation (later OnePacific Coast Bank, then Beneficial State Bank), 2006-present; co-founder, Farallon Capital Management, 1986-2012. In California, successfully campaigned against Proposition 23 in 2010 and for Proposition 39 in 2012.
- Family: Married to Kat Taylor. They have four children between the ages of 21 and 27.