Billionaire candidate for California governor catching heat for past business interests, wealth

California governor Tom Steyer, a leading Democratic candidate turned billionaire hedge fund founder and environmental warrior, faces mounting questions about how he earned his fortune; particularly investments in private prisons currently used to house undocumented immigrants facing deportation.

With the June 2 primary election fast approaching, some of the fiercest political attacks are coming from his Democratic rivals and special interest groups in Sacramento, but Steyer has for years been emphatic about his past, his controversial business ventures and how they helped him fund unbridled campaign spending.

Steyer, 68, faced that ire at a town hall event in San Diego last week.

“Tom, you’re not coming to San Diego and ignoring this detention center,” Holly Taylor, a 37-year-old Democrat, shouted as she held signs with QR codes to help detainees at the Otay Mesa private prison backed by Steyer’s hedge fund. “This is a concentration camp. They drink water from the toilet.”

Taylor, a crime scene cleaner from Pacific Beach, is among the scores of people who gather at the facility each week to raise money to provide some relief to immigrants detained during the Trump administration’s Immigration and Customs Enforcement raids.

In 1986, Steyer was transferred to Corrections Corp. in 2005, according to the Securities and Exchange Commission. He became the founding partner of Farallon Capital, which owns $89.1 million worth of shares in America. That company, now known as CoreCivic, operates private prisons across the country, including the one in Otay Mesa, that house people rounded up by federal immigration agents.

This is not the first time Steyer has faced criticism for his connection to private detention facilities. At the California Democratic Party convention in February, protesters wearing orange prison jumpsuits tried to draw attention to the controversy.

His Democratic rivals also seized on the issue to question the billionaire’s progressive credentials.

“Before he became a progressive, he made millions from companies that run ICE detention centers, run private prisons that incarcerate young children,” Supt. Director of Public Instruction Tony Thurmond said: a new interview With a politically influential person known as Miss Frazzled.

“His entire campaign was built on the backs of kids in cages,” Rep. Eric Swalwell (D-Dublin) wrote Tuesday. a post on x.

Several years ago, Yale University’s graduate teachers union called for Steyer to leave his alma mater, Farallon, over concerns about how the private prison company treated inmates, especially minorities.

Steyer has repeatedly expressed regret over his former firm’s ties to the custody company. In 2012, he sold his shares in Farallon, named after islands off the coast of San Francisco and once one of the world’s largest hedge funds.

“I deeply regret that Farallon made this investment, and I personally ordered the sale of the investment in CCA because it did not align with my values, then or now,” Steyer told The Times after launching a short-lived presidential campaign in 2019.

Asked to comment on the latest iteration of the debate, Steyer’s campaign pointed to comments he made at a town hall in San Francisco in March about how the private prison company, among hundreds of thousands of companies in which his hedge fund has invested, changed the course of his life.

“It was a mistake and I sold it 20 years ago, not thinking it wouldn’t be profitable, I just thought it was a mistake. I don’t want to be in it. But let me tell you, it wasn’t just a mistake,” Steyer said. “It was also a huge wake-up call that I was in the wrong place and working at a job that was taking me to places I definitely didn’t want to go. And there’s a reason why I left that job and walked away from a ton of money because I felt like that wasn’t the life I wanted.”

He added that he and his wife, Kat Taylor, have spent the last two decades pushing for rehabilitative justice rather than mass incarceration for all but violent criminals.

“Am I a perfect person? No, have I made mistakes? Yes,” Steyer said. “But for those who love to read the Bible, there is a moment on the road to Damascus when someone makes a change and I made a big change, I did it a long time ago and I tried very, very hard in the other direction.”

Farallon has also invested in fossil fuel projects, including an Australian coal mine that has destroyed thousands of acres of koala habitat and produced massive amounts of carbon emissions.

Steyer, whose net worth is $2.4 billion according to Forbes, has portrayed himself as a reformed billionaire who distanced himself from Farallon out of concern about how he earned his fortune. He has spent hundreds of millions of dollars supporting Democratic causes, particularly efforts to combat climate change.

“The truth is, that’s not where I think the value is, and that’s not what I’m looking for in my life,” retired government worker Gina Coates said at a town hall in Sacramento in March, when asked how she, as a woman of color, could believe his promises given her privilege as a wealthy white man.

“In terms of trusting me, I quit my job 14 years ago and no one who cared about money would have done that,” Steyer said.

Steyer later said at city hall that he left Farallon because he realized he didn’t want to stay down that road.

“I want to live a meaningful life,” he said. “I want to stand by the people of this state and have real prosperity. 12 trillionaires and 40 million people who cannot pay rent is not success.”

But Steyer and his wife continue to receive significant income from the hedge fund, including millions of dollars in 2024 from investments, holdings and various complex transactions; economic interest and tax returns that Steyer had to submit to the California Secretary of State due to his position as governor.

A Steyer campaign spokesman said Steyer has created guardrails to ensure he does not profit from companies with which he morally disagrees.

“Tom has implemented an investment policy to ensure he does not invest directly in fossil fuels, payday loans or private prisons,” spokesman Anthony York said. “Should Tom inadvertently gain exposure to these sectors through third-party managers or liquid legacy investments, Tom will donate all profits to charity.”

After leaving Farallon, Steyer became one of the nation’s largest Democratic donors. And he used his wealth to finance his political ambitions. Steyer contributed nearly $342 million of his own money to the short-lived 2020 presidential campaign, according to the Federal Election Commission.

Steyer donated nearly $112 million to his campaign in the 2026 governor’s race as of Thursday, the California secretary of state’s office said. Super Bowl Sunday was omnipresent on the airwaves, including local news programs and campaign ads airing during the “Puppy Bowl” on Animal Planet. Steyer has aired more than 5,000 ads in the past month, according to iSpot, which tracks television advertising.

California, home to 23.1 million registered voters, is home to some of the nation’s most expensive media markets. And candidates, especially obscure ones, need to spend heavily on television advertising if they hope to run a successful campaign.

But money is no guarantee of success. Billionaire Meg Whitman, the former eBay chief and former longtime Republican donor, spent $144 million of her money on the gubernatorial bid in 2010. This set a record for a candidate’s contribution to a state race at the time, but Whitman lost to Jerry Brown by nearly 13 percentage points.

In 1998, Democratic multimillionaire Al Checchi, co-chairman of Northwest Airlines, spent $40 million of his fortune on an unsuccessful run for governor; This was a record for that time.

Steyer is one of the top three Democrats in the expanded field to replace outgoing Gov. Gavin Newsom. And his liberal positions are drawing the ire of powerful forces in Sacramento. On Tuesday, the state’s Realtors donated $5 million to an independent spending committee opposing Steyer’s proposal.

Taylor, who met Steyer at San Diego city hall, said he didn’t plan to speak so loudly. But as the event progressed, he decided he needed to talk not only to Steyer but also to the attendees. He and his fellow citizens gather outside the Otay Mesa facility every Sunday to raise money to help detainees buy food from the prison commissary and call their families.

“My real problem is that he is making financial gains from these suffering people,” he said.