(Luis Cornelio, Headline USA) California gubernatorial candidate Tom Steyer is embroiled in controversy over his ties to Farallon Capital, the hedge fund he founded in 1986 that later became a major lender to the coal industry—despite his long-standing image as a climate change warrior.
Steyer, a billionaire Democratic donor and failed 2020 presidential candidate, has emerged as a frontrunner in California’s gubernatorial race after former Rep. Eric Swalwell suspended his campaign amid allegations of sexual misconduct.
Although Steyer stepped down from Farallon in 2012, he did not fully sever ties as the firm expanded into coal-related financing, according to a Tuesday report from The New York Times.
Financial disclosures from his 2020 presidential bid showed his Farallon investments were worth at least $110 million, though the actual value may have been higher due to reporting limits. By 2025, his campaign said that figure fell to $34.7 million.
At the same time, Farallon generated major revenue through coal-linked deals, including backing investments tied to Stanmore Resources. These were controversial projects that other hedge funds reportedly avoided.
The firm also provided $500 million to support an Australian coal terminal, along with $150 million to help Whitehaven Coal Limited acquire two coal mines.
Steyer disclosed in his 2024 tax filings that he held Farallon funds for an Asia-focused project used for a coal-tied deal, according to The Times.
Steyer’s campaign claimed he directed Farallon to keep his personal investments out of fossil fuels, though the Times deemed it difficult to verify whether that separation was effective.
“He remains a passive investor,” the campaign claimed. “Employees at Farallon screen out any fossil-fuel-related holdings from his portfolio, and he no longer earns a share of the profits from the fund.”
The campaign added that if he inadvertently profits from such investments, he would donate the proceeds. Headline USA pressed Steyer’s campaign for evidence that he had done so previously.
“Tom has put in place an investment policy to ensure that he does not directly invest in fossil fuels, payday lending or private prisons,” the campaign added. “To the extent he inadvertently incurs exposure to those industries through third-party managers or illiquid legacy investments, Tom will donate all profits to charity.”
The disclosures complicate Steyer’s portrayal as a climate activist, a position he highlighted after saying he “walked away” from Farallon. When launching his 2020 presidential campaign, Steyer made climate change a central issue. He said at the time:
“If we can reduce the influence of corporate money in our democracy, and start to address the devastating impacts of climate change, we can unlock the full potential of the American people and finally solve the many challenges facing our country. Since leaving my business seven years ago, I’ve devoted myself to fighting climate change, advocating for racial justice, and taking on big corporations.”
