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Tom Steyer's bets on private prisons and coal mining could spell trouble in 2020

Michael Finnegan and Seema Mehta, Los Angeles Times on

Published in Business News

A key liability is Farallon's 2005 investment of $34 million in Corrections Corp. of America, which runs migrant detention centers on the U.S.-Mexico border for U.S. Immigration and Customs Enforcement. Many of the roughly two dozen Democrats in the presidential race have denounced profits from incarceration as immoral.

"I deeply regret that Farallon made that investment, and I personally ordered the investment in CCA to be sold because it did not accord with my values then or now," Steyer said.

More troublesome for Steyer's public image is the fund's history of investing in fossil fuel projects, including a giant coal mine in Australia that generates vast quantities of carbon emissions.

The owners overcame protests by environmentalists and won permission to clear 3,700 acres of forest that served as a koala habitat and mine 12 million tons of coal per year. Steyer's critics have long seen his past personal stake in coal mining as hypocritical.

"If you're running as a liberal, idealistic candidate, as Tom Steyer is, it's a serious problem when the story you're trying to tell uses words like private prisons and coal," said Jessica Levinson, a Loyola Law School professor. "It just goes directly against the rainbows and sunshine and clean air and better tomorrow narrative he's trying to paint."

Steyer said he left Farallon in part because of its holdings in fossil fuels. "I wish I'd made the move away from fossil fuels sooner," he said.

 

Steyer, 62, muscled his way onto the public stage by becoming one of the Democratic Party's top donors over the last decade. He put $74 million into the 2018 midterm election. He has carefully crafted his political profile around his spending to promote liberal causes, most visibly the fight against global warming and the drive to impeach Trump.

Some of Steyer's record has yielded bad publicity over the years as he weighed runs for elected office in California. But his entry into the presidential race on Tuesday and his vow to spend $100 million of his own money on his campaign will draw fresh scrutiny to the means he used to amass what Forbes estimates to be his net worth of $1.6 billion.

Steyer, who grew up on Manhattan's East Side, started his career on Wall Street in the late 1970s at Morgan Stanley and worked later on mergers and acquisitions at Goldman Sachs. In 1986, he opened Farallon, which grew from $9 million to $36 billion on his watch, according to Steyer.

Some Democrats say Steyer has atoned for his sins. RL Miller, chairwoman of the state Democratic Party's environmental caucus, was perplexed by his candidacy and said his money would be better spent advancing other Democrats.

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