Billionaires get frustrated by Washington ineptitude just like everybody else. The difference is that they can afford to do something about it. Tom Steyer, who founded the San Francisco-based hedge fund Farallon Capital Management and retired last year with an estimated $1.4 billion fortune, is one such fed-up billionaire. Steyer’s particular grievance is the lack of government action to combat global warming. “If you look at the 2012 campaign, climate change was like incest—something you couldn’t talk about in polite company,” he says. “With the current Congress, the chance of any significant energy or climate legislation that would move the ball forward is somewhere around nil—possibly lower.”
So Steyer, 55, a major Democratic contributor, quit Farallon to devote his time and much of his money to changing this reality. In doing so, he’s joined an emerging class of billionaires—including this magazine’s owner, Michael Bloomberg and Facebook (FB) co-founder Mark Zuckerberg—who have forsaken the traditional approach of working through the political parties and instead jumped directly into the fray, putting their reputations and fortunes behind a cause.
Some environmental activists are thrilled. “In a country that’s dominated by billionaires gaming the political system for their narrow self-interest, it’s pretty neat to see a player who’s in it for the common good,” says author and environmentalist Bill McKibben. “He’s not a greedhead.” Many Democrats, McKibben among them, view Steyer as a liberal analogue of the conservative Koch brothers, the billionaire owners of Koch Industries, whose lavish support of free-market causes and political ruthlessness loom large in the liberal imagination.
Steyer’s financial commitment is unquestioned. In 2010 he and his wife, philanthropist Kat Taylor, signed the “Giving Pledge” begun by Warren Buffett and Bill and Melinda Gates to persuade wealthy people to devote the majority of their fortunes to good causes. That same year he spent $5 million successfully defending California’s greenhouse gas emissions law against a ballot measure, heavily financed by oil companies, to weaken it. He spent an additional $35 million last year on an initiative to close a tax loophole that benefited out-of-state corporations. Voters approved the measure, which will raise $1 billion a year in new revenue for the state, in November. “He has made a difference in California,” says Representative Henry Waxman, the Los Angeles Democrat.
His aptitude for hardball politics is less certain. On March 18, Steyer, a vocal opponent of the proposed Keystone XL pipeline that would pump tar sands oil from Canada to the Gulf Coast, clumsily inserted himself into the Massachusetts Democratic primary race between Representatives Edward Markey and Stephen Lynch for the state’s open Senate seat. Channeling John Wayne, Steyer penned a bullying letter demanding that Lynch renounce his support for the pipeline “by high noon” a few days later or face the wrath of all the opposition Steyer and his checkbook could muster. Lynch’s campaign dismissed the stunt as “billionaires issuing ultimatums.” The Boston Globe chastised Steyer for butting into a race in which both candidates had pledged to eschew PAC support. Markey probably doesn’t even need the support: Polls consistently give him a solid lead.
But after the searing defeat in Congress three years ago of legislation to cap carbon emissions, Steyer and many other Democrats preoccupied with climate change are convinced that only a smash-mouth, confrontational style of politics can save the planet. He subscribes to the analysis offered in a recent paper by Harvard sociologist Theda Skocpol that the loss derived from Democrats’ naive faith that their best chance at climate legislation was cooperating with polluters on a grand bargain negotiated by Washington power brokers. The strategy failed to account for Republicans’ radicalization and use of the filibuster. And because environmental groups had neglected to organize, no grassroots pressure materialized when the legislation stalled.
Steyer confidently presents himself as being in the vanguard of a hardheaded new approach. “The way politics works is by people winning and losing jobs—their own jobs,” he says. “Until people running for office believe it’s in their own interest, that it will make them popular with their constituents to stand up for good policy, it’s not going to be good politics.” For now, this approach entails rounding up a posse of environmental activists and making blustery threats to keep Democrats in line. Earlier this month, Steyer paid for an airplane to circle a Boston Red Sox game at Fenway Park trailing a banner that read, “Steve Lynch for Oil Evil Empire.”
Any real hope of climate legislation must eventually rest on the much tougher task of persuading some Republicans to go along. Steyer is vague about how he intends to accomplish this. An adviser suggests he is merely taking care not to tip off the oil companies, the Koch brothers, and other malign interests to his strategy.
Democrats pushing for action are generally supportive of this new billionaire in their midst, if ambivalent about Steyer’s methods. “I’m not happy about big money playing such an important role in political campaigns,” says Waxman. “But I want to see a pushback, and we can’t unilaterally disarm. I’m glad someone like Tom is willing to spend.”
Yet as Harvard’s Skocpol makes clear, money wasn’t the most important element missing from the last climate fight. National environmental groups were actually very well-funded. What was missing was any conviction among voters that global warming is an urgent concern. The next few years will reveal whether Steyer’s wealth and antics can help change this. When people inquire about his occupation, “I actually tell them ‘professional pain in the ass,’ ” Steyer says. “Before, I was only an amateur.”
The bottom line: Steyer retired from Farallon Capital Management to work full time to push for climate change laws—and stop the Keystone pipeline.
