Tom Steyer, the billionaire hedge fund founder turned environmental crusader who is a leading Democratic candidate for governor of California, is facing growing questions about how he acquired his wealth — particularly investments in private prisons, which are now being used to hold undocumented immigrants facing deportation.
As the June 2 primary election approaches, some of his most dangerous political attacks come from his Democratic rivals and Sacramento special interest groups, but Steyer has been dogged for years by concerns about his past, controversial business ventures and how they help finance his rampant campaign spending.
Steyer, 68, faced anger during a town hall event in San Diego last week.
“Tom, you will not come to San Diego and ignore this detention center,” Holly Taylor, a 37-year-old Democrat, shouted at Steyer, holding signs with QR codes to help detainees at the Otay Mesa private prison, which was backed by Steyer’s hedge fund. “This is a concentration camp. They’re drinking water from toilets.”
Taylor, a Pacific Beach crime scene cleaner, is among hundreds of people who gather weekly at the facility to raise money to provide some comfort to detained immigrants amid the Trump administration’s Immigration and Customs Enforcement raids.
In 1986, Steyer co-founded Farallon Capital, which in 2005 owned $89.1 million worth of shares in Corrections Corp. of America, according to the Securities and Exchange Commission. That company, now known as CoreCivic, operates private prisons across the country that house people picked up by federal immigration agents, including the prison in Otay Mesa.
This is not the first time Steyer has faced criticism regarding 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 have also taken up the issue to question the billionaire’s progressive credentials.
“Before he was a progressive, he made millions out of companies that operate ICE detention centers, that operate private prisons that incarcerate young children,” said the state superintendent. Tony Thurmond of Public Instruction said during a recent interview With a political influencer named Mrs. Frazzled.
“His entire campaign is built on the backs of kids in cages,” Rep. Eric Swalwell (D-Dublin) wrote Tuesday. a post on x.
People protest outside a luncheon hosted by California gubernatorial candidate Tom Steyer at the 2026 California Democratic Party State Convention in San Francisco on February 21.
(Jeff Chiu/Associated Press)
Several years ago, Yale University’s Graduate Teachers Association called on the school – Steyer’s alma mater – to divest from Farallon because of concerns about how the private prison company treats detainees, particularly minorities.
Steyer has repeatedly expressed regret about his former firm’s relationship with the detention company. In 2012, he sold his stake in Farallon, named in reference to the islands off the coast of San Francisco and which was once one of the world’s largest hedge funds.
“I deeply regret that Farallon made that investment, and I personally ordered the sale of the investment in CCA because it was not consistent with my values then or now,” Steyer told The Times after launching a short-lived presidential campaign in 2019.
Asked to comment about the latest iteration of the controversy, Steyer’s campaign pointed to comments he made at a town hall in San Francisco in March about how among hundreds of thousands of companies his hedge fund has invested in, the private prison company changed the course of their lives.
“It was a mistake, and I sold it 20 years ago thinking it’s not that it wouldn’t be profitable, it’s just a mistake. I didn’t want to be in that business. But let me say this, it wasn’t just a mistake,” Steyer said. “It was also a big reminder that I was in the wrong place, that I was in a business that was taking me to places I didn’t want to go at all. And one of the reasons I walked away from that business and walked away from a lot of money was because I felt that was not the life I wanted.”
He said he and his wife, Kat Taylor, have emphasized rehabilitative justice — treatment rather than mass incarceration, except for violent offenders — over the past two decades.
Steyer said, “Am I a perfect person? No. Have I made mistakes? Yes.” “But for those of you who like to read the Bible, there comes a moment on the Road to Damascus when someone makes a change, and I’ve made a big change, and I did it a long time ago, and I’m working very, very hard the other way.”
Fairlawn also invested in fossil fuel projects, including an Australian coal mine that destroyed thousands of acres of koala habitat and generated huge amounts of carbon emissions.
Steyer, who has a net worth of $2.4 billion according to Forbes, has portrayed himself as a reformed billionaire who moved away from Fairlawn, angry at how he acquired his wealth. He has spent hundreds of millions of dollars in support of Democratic causes, particularly efforts to fight climate change.
“The truth is I think there’s no value there, and it’s not what I’m looking for in my life,” he said at a Sacramento town hall in March.
Steyer said, “In terms of trusting me, I should say this, I left my business 14 years ago, and anyone who cared about money would not have done that.”
Steyer later said at the town hall that he left Farallon because he realized he did not want to stay on that path.
“I want to live a meaningful life,” he said. “I want to stand with the people of this state and have real prosperity. Twelve trillionaires and 40 million people who can’t make rent is not success.”
But Steyer and his wife continued to receive significant income from the hedge fund, which included millions of dollars in investments, holdings and various complex transactions in 2024, according to a statement of economic interest and tax returns he was required to file with the California Secretary of State’s office because of his gubernatorial tenure.
A Steyer campaign spokesperson said Steyer created the guardrails to ensure he did not profit from companies with which he morally disagrees.
“Tom has created an investment policy to ensure that he does not invest directly in fossil fuels, payday loans or private prisons,” said spokesman Anthony York. “To the extent he unknowingly invests in those industries through third-party managers or liquidated legacy investments, Tom will donate all profits to charity.”
After leaving Farallon, Steyer became one of the nation’s top Democratic donors. And he has used his wealth to pursue his political ambitions. According to the Federal Election Commission, Steyer contributed approximately $342 million of his own money to his short-lived 2020 presidential campaign.
In the 2026 governor’s race, Steyer has donated nearly $112 million to his campaign as of Thursday, according to the California Secretary of State’s office. They have been a ubiquitous presence on the airwaves, including local news programs and campaign commercials that aired during the “Puppy Bowl” on the Animal Planet Channel on Super Bowl Sunday. According to iSpot, which tracks television commercials, Steyer has aired more than 5,000 commercials in the past month.
California, home to 23.1 million registered voters, is home to some of the most expensive media markets in the country. And candidates, especially those who are not well-known, need to spend heavily on television advertising if they hope to have a successful campaign.
But money is no guarantee of success. Billionaire Meg Whitman, the former eBay chief and formerly a longtime Republican donor, spent $144 million of her own money on her 2010 gubernatorial bid. This set a record for contributions by a candidate in a state race at the time, but Whitman lost to Jerry Brown by about 13 percentage points.
In 1998, Democratic multi-millionaire Al Chechi, co-chairman of Northwest Airlines, spent $40 million of his fortune on an unsuccessful run for governor, still a record at the time.
Steyer is one of the top three Democrats in the vast field to replace ousted Governor Gavin Newsom. And his liberal stances are drawing the ire of powerful forces in Sacramento. On Tuesday, the state’s Realtors donated $5 million to an independent expenditure committee opposing Steyer’s bid.
Taylor, who faced Steyer at a San Diego town hall, said he had not planned to be so vocal. But as the program unfolded, she decided she had to talk not only to Steyer, but to the attendees as well. She and her compatriots gather outside the Otay Mesa facility every Sunday to raise money to help detainees buy food at the prison commissary and call their families.
“My main issue is that they have benefited financially from the suffering of these people,” he said.
