Tom Steyer, the hedge fund billionaire and environmental advocate running for governor of California, is facing a wave of criticism over the origins of his fortune as the June 2 primary election approaches. Although Steyer has positioned himself as a progressive champion for climate action and social justice, critics and political rivals are pointing to his past investments in private prisons and fossil fuels as a contradiction of his current platform.
The scrutiny has intensified during recent campaign stops, where Steyer has been confronted by activists and Democratic opponents. At a town hall in San Diego, the tension peaked when Holly Taylor, a 37-year-old Democrat and crime scene cleaner, confronted the candidate regarding a private detention center in Otay Mesa. Taylor, who spends her weekends raising money for detainees, described the facility as a “concentration camp” where people are forced to drink water from toilets.
The controversy centers on Steyer’s role as a co-founder of Farallon Capital, the firm he helped launch in 1986. According to Securities and Exchange Commission filings, Farallon held shares valued at $89.1 million in the Corrections Corp. Of America in 2005. That company, now operating as CoreCivic, manages private prisons across the U.S., including the facility at Otay Mesa currently used to house undocumented immigrants facing deportation.
The ‘Road to Damascus’ and the Cost of Redemption
Steyer has not shied away from his history with the private prison industry, though he frames it as a catalyst for his political awakening. He has repeatedly expressed remorse for the investment, stating that he personally ordered the sale of the CCA shares since they did not align with his values. He eventually sold his entire stake in Farallon in 2012.
During a March town hall in San Francisco, Steyer described the realization as a “wake-up call,” admitting that he had been in a business that was taking him to places he did not seek to go. Invoking a biblical reference, Steyer compared his shift in values to the “road to Damascus,” asserting that he made a fundamental change long ago and has spent the last two decades pushing for rehabilitative justice and treatment over mass incarceration.
However, the “reformed billionaire” narrative has not satisfied all his detractors. State Superintendent of Public Instruction Tony Thurmond recently noted in an interview that before Steyer’s progressive turn, he profited from companies operating ICE detention centers and prisons that incarcerated children.
The criticism has also extended to the digital sphere. Rep. Eric Swalwell (D-Dublin) took to X to argue that Steyer’s current political campaign is “built on the backs of kids in cages.”
Wealth, Influence, and the California Primary
With a net worth of $2.4 billion according to Forbes, Steyer is utilizing his personal wealth to saturate the California media market. In the current governor’s race to replace termed-out Gov. Gavin Newsom, Steyer has already donated nearly $112 million to his own campaign. This follows a 2020 presidential bid in which he contributed nearly $342 million of his own funds, according to Federal Election Commission records.
His strategy involves an aggressive advertising blitz. In the last month alone, Steyer has aired more than 5,000 ads, according to data from iSpot. These commercials have appeared across local news and niche programming, including the “Puppy Bowl” on Animal Planet during Super Bowl Sunday. This level of spending is a necessity in California’s expensive media markets, where 23.1 million registered voters reside.
However, historical precedents suggest that massive spending is not a guarantee of victory. In 2010, billionaire Meg Whitman spent $144 million on her gubernatorial bid, only to lose to Jerry Brown by nearly 13 percentage points. Similarly, in 1998, Al Checchi spent a then-record $40 million in an unsuccessful run for the office.
Ongoing Financial Ties and Ethical Guardrails
While Steyer emphasizes his departure from the hedge fund world, financial disclosures required by the California Secretary of State’s office reveal a more complex relationship. Tax returns and statements of economic interest show that Steyer and his wife, Kat Taylor, continued to receive significant income from Farallon through investments and various transactions in 2024.
In response to these findings, campaign spokesperson Anthony York stated that Steyer has implemented “guardrails” to prevent profiting from industries he morally opposes. The campaign says Steyer’s current investment policy prohibits direct investment in private prisons, payday lending, or fossil fuels. Any inadvertent exposure to these sectors through third-party managers, according to York, will result in the profits being donated to charity.
These ethical questions coincide with a broader pushback from Sacramento special interests. On a recent Tuesday, the state’s Realtors donated $5 million to an independent expenditure committee specifically designed to oppose Steyer’s bid, citing his liberal positions.
| Campaign | Approximate Amount | Source |
|---|---|---|
| 2020 Presidential Run | $342 Million | FEC |
| 2026 Governor’s Race | $112 Million | CA Secretary of State |
As the primary date looms, Steyer continues to argue that his wealth is a tool for a more equitable society, stating that a world where “twelve trillionaires and 40 million people who can’t make rent” exist is not a success. For activists like Holly Taylor, however, the issue remains the fundamental origin of that wealth. “My main issue is that he has gotten financial gain off of these people suffering,” Taylor said.
The next critical checkpoint for the campaign will be the June 2 primary election, which will determine if Steyer’s message of redemption and reform resonates with the California electorate over the concerns regarding his business history.
Do you think a candidate’s past business investments should impact their current political viability? Share your thoughts in the comments below.
