The Billionaire Who Could


The 60-year-old former hedge fund manager is honing an outsider’s pitch that could suit him well for whatever follows his double-barreled 2018 campaign.

By David Catanese, Senior Politics Writer

Tom Steyer, the former hedge fund manager turned progressive environmental activist worth an estimated $1.6 billion, was Robert Rubin’s protege at Goldman Sachs before becoming one of the Democratic Party’s most generous donors and hosting Barack Obama, Joe Biden and Hillary Clinton at his San Francisco home that sits on a cliff overlooking the Golden Gate Bridge.

But this self-made investing titan who has immersed himself in the uppermost echelons of power has begun honing an outsider’s pitch: admonishing Washington’s obsession with itself, embracing a post-ideological approach and positing that those “closest to the people” will yield the most success in 2018.

Sound familiar?

The 60-year-old Steyer is in the midst of two distinct but complementary national campaigns, fueled by tens of millions of dollars of his own money, with the aim of flipping the House of Representatives to Democratic control and triggering the impeachment of President Donald Trump.

But when asked who he thinks is doing an admirable job of leading the resistance in the trenches of the nation’s capital, he pauses – before retreating to his home state governor: the 79-year-old Jerry Brown, now finishing what’s likely his last year in public life.

“He’s done a great job,” Steyer says in a recent interview with U.S. News. “Jerry has stood for things, he’s done a very effective job of running this state, he’s taken on a national and international role on energy and climate. If you want to look at someone who’s done effective things over the last 12 months, there’s a perfect example of somebody who probably people in Washington, D.C., spend approximately zero seconds thinking about but who has actually been outstanding in a variety of ways that are really meaningful in the face of Mr. Trump.”

“People aren’t paying attention to him,” he continues. “Jerry deserves a ton of credit.”

And then he offers the pointed and partially self-serving dig: “People in D.C. like to look at people in D.C. Well, here’s a guy who lives in Sacramento, California, who is basically crushing it. No one’s paying any attention at all.”

When pressed a second time to name a worthy crusader at the federal level – with options ranging from his home state representatives, like House Minority Leader Nancy Pelosi and upstart freshman Sen. Kamala Harris to progressive heroes like Sens. Bernie Sanders and Elizabeth Warren – Steyer holds his cards.

“Look, in my opinion, the people who are going to do the best job in 2018 are the people who are closest to the people of the U.S.,” he says. “If you look at what the biggest political party in the U.S. is, it’s the people who choose not to vote. That’s the No. 1 party.”

It’s an answer that keeps him from singling out any star-in-the-making while also sounding strikingly nonpartisan and in touch with the grassroots. And it just so happens to dovetail nicely with his own mission of engaging and registering young people to vote and ultimately prodding them to the polls for Democratic candidates.

“Rather than trying to figure out what kind of person, we should be paying attention to who’s doing the work and what’s happening. This year’s going to be a great testing ground to see what people do, and we should pay attention to that,” he insists.

An Inside-Outside Game


The year may also prove to be a vital testing ground for his own political acumen and whether it’s sharp and compelling enough for a White House campaign, a prospect Steyer hasn’t ruled out despite never having run for office.

“It’s kind of like head down until Nov. 6 to see how that turns out and where the country is and what the upshot of that is,” he says. “We are basically saying if we don’t swing the House this year, it’s going to be really, really, really, really bad.”

Steyer’s planned $30 million investment in roughly 30 House districts in 2018 will place his imprimatur in traditional battlegrounds like Florida, Michigan and Wisconsin as well as the early presidential primary havens of Iowa, New Hampshire and Nevada.

At the same time, his face is being transmitted into millions of homes and computers as a part of a separate $20 million television and digital advertising campaign to urge the impeachment of the president. Steyer has run five spots on the air and online since October, with the latest hitting television the night of Trump’s first State of the Union address. It features a ticking clock and asks, “How bad does it have to get before Congress does something?”

In November, Steyer hoisted a giant billboard in New York’s Times Square, so that amid the cacophony of flashing advertisements for Broadway shows, fast food joints and clothing stores, hundreds of thousands of daily visitors would see Trump’s brooding face with a call to “Impeach!” blinking over it.

In just about four months, Steyer has collected the names and email addresses of more than 4.7 million Americans who have signed his “Need to Impeach” petition, an arsenal of data collection that’s being noticed by Democrats aligned with other potential 2020 contenders.

“He’s built the most valuable list in politics,” muses one Democratic aide on Capitol Hill. “I bet at this point it’s as good or better than Bernie’s. [There’s] only one way to explain his behavior.”

Steyer’s also tapped brand-name professional talent for counsel as he’s extended his political portfolio. John Anzalone, of the Clinton and Obama presidential campaigns, has done polling; veteran admaker Mark Putnam is producing his TV spots; Bruce Reed, a former chief of staff to Vice President Joe Biden, lends policy advice. Chris Lehane, the press secretary for Al Gore’s presidential campaign, helped Steyer launch his NextGen organization back in 2013 and remains a friend and confidante. NextGen Climate – the pro-environment political action committee dedicated to thwarting climate change – morphed into NextGen America last year, reflecting Steyer’s expanding ambitions.

“He’s not like the typical politician where you run for this position to be in that position in 10 years. He says, “Where do you get leverage on an opportunity that others don’t see?” Lehane says.

Steyer, who earned a fortune for his talent of managing risk in financial markets, is attempting something unique in this regard. He’s bolstering his party’s key congressional candidates with his financial largesse at the ground level while at the same time poking party leadership for its timidity in taking on Trump. It’s an inside-outside strategy that shows commitment to the cause while retaining the audacity of an activist.

Steyer’s aggressive move to oust Trump has snagged him unique attention, but it’s annoyed elected Democrats. Pelosi reportedly called his impeachment campaign “a distraction.” Minority Leader Chuck Schumer of New York has said it’s “premature.”

The operating theory among Democratic leadership is that running against Trump’s ineptitude and offenses is enough and that banging the impeachment drum could be seen as arrogant overreach that will turn off swing voters.

Even those who admire Steyer, like Steve Westly, the former chief financial officer of California who’s known him for 40 years since attending Stanford University business school together, thinks “Tom’s more out front of where I would’ve been.”

“This is America. People want to see a due process,” Westly says.

Steyer is frustrated by such critiques, and at the same time unmoved.

“Our goal is to not do tactical, political thinking but to try and stand up for what is right and important for the American people, and what we’re trying to do is enable the voice of the American people to be heard. Can you show me some scenario where this wouldn’t work out politically? I think you’re asking the wrong question. You should be asking the question, ‘Is he actually unfit? Is he actually dangerous? Is this really a serious threat to the American people?’ And if it is, then we should be standing up and saying that and enabling Americans’ voice together to say that and let the politics work out as they will,” Steyer says.

“So when you say, ‘Tom, there’s a bunch of Washington insiders who think you’re making a political miscalculation, won’t you please back down?’ The answer is, no, we’re standing up for what we think is right and important. No, we won’t back down.”

Steyer flexed his muscle recently in deciding to cut off his contributions to Democratic committees after lawmakers voted to reopen the government without an agreement on immigration.

And his brain trust argues that Democrats’ reluctance to embrace the impeachment push reveals they’ve learned nothing from their mistakes in the past of favoring skittish moderation over unflappable conviction.

“Depending on the district, about 70 to 80 percent of Democrats want Trump impeached, but Democrats in Congress don’t. It’s crazy,” says Chris Lehman, a senior adviser to Steyer since 2012. “It doesn’t make any sense. There’s no other issue where you have so many members of Congress saying they know better than 70 to 80 percent of their base.”

Eric Bauman, chairman of the California Democratic Party, says when he shows Steyer’s impeachment videos to rooms of liberals, it sets them “on fire.”

“In terms of motivating that cohort of people, impeachment is incredibly powerful,” Bauman says. “I think he senses that, I think he understands that.”

Kevin Mack, another top adviser to Steyer says impeachment is “the equivalent of Donald Trump’s ‘Build the Wall.’ Except Republicans say, ‘Let’s go!’ Democrats say, ‘Well, we can’t get it out of the Judiciary Committee.'”

“If you stand down, you take the power out of the wave. We’re fueling the wave,” Mack says.

Road to Damascus

When friends and advisers describe Steyer’s motivations, they do so in the most pure and altruistic terms: He’s a rich guy who could be spending his money on flashy cars and sports teams, but instead he’s trying to preserve the nation’s democracy, confront an existential challenge to humanity and save the globe.

“He’s trying to do the morally correct thing every single day,” says Mack, a Democratic consultant who just moved from Washington to San Francisco to join Steyer’s effort full time. “We talk about what’s the most politically expedient thing to do, what’s the most politically correct thing to do, and he often rejects it.”

After working in risk arbitrage at Goldman Sachs alongside Rubin in New York, Steyer founded Farallon Capital Management in San Francisco in 1986, a hedge fund that eventually became one of the largest in the world.

The size of the enterprise expectedly produced critics, including a coalition of student and union activists who protested some of Farallon’s investments, one being a water development project in Colorado that activists depicted as an environmental disaster.

Instead of ignoring or dismissing the protesters, Steyer took their concerns seriously and attempted to argue his case defending the safeguards of the project. “Eventually, we got it through our thick skulls that we were not going to convince anyone,” he told an investment trade publication in 2005. “Were we dumb? Yes, very! But we weren’t irresponsible or wicked.”

Steyer was always an active philanthropist and one of the first people in San Francisco solicitors would call seeking money for this or that cause or aspiring political candidate.

But Lehane says the financial meltdown in 2008 became Steyer’s “road to Damascus” moment that served as a personal and spiritual awakening. He began thinking deeply about climate change, the environment and even came to terms with some of the investments he made over the years – which included holdings in Exxon Mobil – that he wasn’t any longer comfortable with.

“There was this moment when he began taking his kids to church. He wanted them to think about morality. His intention was to do it for them, but it ended up impacting him,” Lehane says. Steyer now attends Grace Cathedral, an Episcopal church in San Francisco, almost every Sunday.

In 2010, Steyer embarked on a statewide effort to defeat a ballot measure that would suspend California’s landmark climate change law requiring a significant reduction of greenhouse gases over a decade. Devoting $5 million to the cause, he partnered with Republican George Shultz, President Ronald Reagan’s secretary of state, to defeat the repeal measure by a 23-point margin. The day after the election, Steyer, referencing the oil companies behind the repeal initiative, told reporters, “I chose to do this because I lost my temper.”

It appeared to light a fire in him that hasn’t dimmed since.

In 2012, he dedicated $32 million of his own money to spearhead a referendum that tweaked the state’s corporate tax structure to raise $1 billion for clean energy projects and general spending. Again, he won easily, netting 61 percent of the vote.

It was after these twin wins that Steyer began to take his ambitions beyond his home state’s borders. His pet project became opposing the Keystone XL pipeline, a 1,700-mile system that would carry oil from Canada to the Gulf of Mexico. For Steyer, no battle was too small.

Through his NextGen group, he created a super PAC to pressure Democratic candidates in a special 2013 U.S. Senate election in Massachusetts to oppose the pipeline. A letter to Rep. Stephen Lynch instructed him to drop his support for the project or face an aggressive campaign against him. The move rankled even then-Rep. Ed Markey, the ostensible beneficiary, who told Steyer to stay out of the race. Steyer ignored him and went ahead with Facebook ads and an RV that paraded around the Bay State targeting Lynch. Despite the friction, Markey defeated Lynch and Steyer could claim a casualty.

He moved on to an $8 million campaign supporting Terry McAuliffe’s run for governor in Virginia that funded advertisements, mailers and a get-out-the-vote program, and at the same time targeted President Barack Obama with a national commercial urging him to reject the Keystone project.

In 2014, he spent $75 million on behalf of Democratic candidates in the midterms to a muted effect, as many of them lost in what was a Republican wave election.

Two years later, his personal tab approached $100 million, making him the 2016 cycle’s leading federal donor. John Podesta’s leaked emails revealed that Steyer sought more: A formal role with the Clinton campaign, something like “California co-chair.”

Robby Mook, Clinton’s campaign manager, responded to the forwarded request in February 2015, writing: “My gut: don’t give him a title. He will be the story.”

Podesta replied, “Maybe. Could be leaving a lot of $ on the table.”

Steyer didn’t receive a role but plowed ahead with his money anyway, attempting to deploy climate as a wedge issue. But it was largely overwhelmed by the Trump phenomenon. A smaller but not insignificant consolation: A Steyer-fueled ballot initiative requesting a $2 tax hike on tobacco products easily won voters approval in California.

Steyer then returned to Virginia in 2017, spending $3.3 million on young progressive turnout that helped lift gubernatorial candidate Ralph Northam and a slate of down-ballot legislative candidates. The turnout rate for 18-to-29-year-olds in Virginia climbed 8 percentage points since the 2013 elections, a jump that NextGen eagerly took credit for.

Steyer has at least twice seriously mulled bids for statewide office but ultimately passed on Senate and gubernatorial contests the last two rounds. Perhaps when he ran through the numbers he didn’t see a clear path to victory; perhaps he decided he didn’t want to go through the personal toll of being a candidate taking arrows. Perhaps he just calculated he could do more from the outside. Or perhaps he’s biding time, with his eyes on something bigger.

2020 Risk Assessment

“People are obsessed with the idea of whether he’s running for office. Conversations take place every day between establishment politicians who can’t believe he’s just doing this for the cause. It’s a jaded way to look at it,” Mack says.

The standard operating procedure of today’s politically devoted but unelected billionaires has largely been discretion: Spend lavishly, but speak sparingly.

Robert and Rebekah Mercer, the conservative father-daughter duo who helped power Trump’s election, are reclusive and rarely talk publicly. Robert has been described as “nonverbal” and “painfully awkward socially.”

Charles and David Koch, the free-market libertarian brothers, whose groups spent nearly $900 million during the last election cycle, are known for their private soirees but loathe publicity. When liberal magnate George Soros does speak, it’s more likely to be at Davos than in Des Moines.

“I would love to have a televised interview of you with either of the Koch brothers or either of the Mercers,” Steyer scoffs. “Good luck. I’m not holding my breath.”

Steyer is taking a markedly different approach, regularly granting interviews, holding press conferences and staring straight into the camera’s lense in his advertising campaign.

In the coming months, Steyer, according to an adviser, is planning to show up in the congressional districts he’s targeting, meeting with local leaders and organizers, possibly accompanying them on door-knocking campaigns. He’s also exploring launching a series of candidate forums to drill down on the issues most important to young people.

And, for the first time, his NextGen organization is weighing intervening in Democratic primaries, potentially making Steyer a crucial player in the ideological makeup of this cycle’s candidate class.

“We are considering situations where it may make sense to endorse in a primary, especially in cases where candidates differ on issues or it makes a difference in the general election,” says Heather Hargreaves, NextGen’s executive vice president.

Yet Steyer says the traditional ideological warfare between conservatives, liberals and moderates that consumes Washington is obsolete, staking out a post-partisan posture that can appear disconnected from his staunch personal views.

“What’s really breaking down in the U.S., is traditional ideological terms. You’re saying, ‘Please put this back in the frame that was back in 1930 or 1980,’ and I’m saying, that’s the wrong frame. I think it’s a question of, are you actually dealing with the actual issues that are affecting working families in 2018?” he says. “The minute we start to put that in these old frameworks, everything starts to fall apart, because those frameworks are no longer relevant in 2018.”

As he says this, he’s also begun organizing the highly partisan exercise of “impeachment house parties” to be held over Presidents’ Day weekend. The initial goal was 500. When “Need to Impeach” emailed its list, it netted 2,300 sign-ups overnight, immediately recalibrating expectations. Now, they’re guessing they’ll host closer to 5,000.

As someone who accumulated his fortune by assessing spreadsheets, Steyer is extremely metric-driven. The sheer volume of signatures he’s collected is obviously valuable; but it’s a sophisticated analytical evaluation that can weaponize them.

Mack says they’ve already segmented their supporters vault into four major categories: Those not registered to vote, those who are infrequent midterm voters; those who are ticket-splitters, and those who are most likely to vote with them and remain active.

This allows Steyer’s team to design different messages for separate sub-groups. A person not registered and only sparingly paying attention to the news cycle is going to require a different communication approach than the most ardent activist who camps out on Twitter 12 hours a day.

“Size is one thing, but engagement is the more important metric,” Mack says.

Over at NextGen, a big part of Hargreaves’ job is to find more effective ways to attract new voters.

Because their audience is young people, they’re experimenting with ways to leverage the latest innovations in Snapchat and peer-to-peer texting platforms like Hustle and Relay.

“Most young voters won’t reply to emails, but they’ll reply to text messages,” Hargreaves says, explaining why the group sent 7 million texts during the 2016 election.

One lesson the group learned from 2016 is that there’s a void in engagement at community colleges, a considerably larger population that doesn’t earn the same level of attention from political groups that traditional four-year universities do. To remedy that, NextGen’s committed that at least half of the campuses it targets this year will be community and vocational schools. They’re also beginning to test the success of engaging young people who choose never to set foot on any type of college campus whatsoever.

“The biggest difference, probably, is we have the resources to try new things and experiment,” Hargreaves says.

If 2018 is a success for Steyer, a newly emboldened Democratic-controlled House might gavel in 2019 by beginning impeachment proceedings against Trump just as he starts gearing up for re-election. No one person would be singularly more responsible for that hypothetical scenario than Steyer, who will then face a personal question about what to do next: Continue his crusade from the outside, funneling his tens of millions of dollars into other people and leveraging his millions of supporters for a new cause – or finally earmarking it all for himself.

The theory cuts both ways. Either Trump’s crippling unpopularity tarnished the opportunity for another wealthy, unelected business person to pursue the White House or he cracked open the door for it to happen again.

Steyer contends that Trump’s only proven that a businessperson with “a history of broken contracts … lawsuits from his suppliers, failed projects, questionable dealings and unsavory associates” can’t handle the job.

He adds, “I think that there are a lot of things that you can pick up in the private sector that are incredibly valuable that aren’t particularly abundant in the public sector. I also think it’s true that in order to do a good job you have to have a public purpose. And so, when I look at Mr. Trump, I don’t see his public purpose.”

Steyer clearly has a public purpose, but the success of his tactics this year will go a long way in assessing his prominence in the party next year.

As a hedge fund manager, Steyer was known as a pragmatist willing to adapt in volatile conditions. But in politics, risk is a requirement.

Steyer implored to U.S. News he has “no idea what the right thing for our organization, or for me to do, is going to be,” following 2018.

But last week, he began to look like a candidate-in-the making, standing on the campus of the University of Nevada Las Vegas and promising to flip the state’s U.S. Senate seat and governorship, targets not previously identified by him or his group.

There he was, already expanding his ambitions in real time, shedding his suit jacket for a “We


David Catanese is senior politics writer for U.S. News & World Report and founder of the blog The Run 2016. You can follow him on Twitter and send him feedbac… full bio »



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