Tom Steyer: An Inconvenient Billionaire
Credit: Photograph by Art Streiber

Since stepping down from his firm, Farallon Capital Management, at the end of 2012, Steyer has hired a cutthroat political consultant and financed attack ads and armies of door knockers in Massachusetts and Virginia to defeat two candidates who supported the pipeline, all through a nonprofit political organ called NextGen Climate Action Committee. They weren't exactly long-shot races, but Steyer managed to put himself on the map with around $10 million and a sizable dose of chutzpah. In Massachusetts, he demanded the target candidate renounce his support for the pipeline by "high noon."

Bill McKibben, the environmentalist writer and activist whose 2012 article in Rolling Stone galvanized Steyer's political will to fight climate change, says Steyer has "made it very clear to the political class that you don't get to screw the planet and get away with it scot-free. There's a price to be paid there."

The unmitigated flow of money into politics isn't everybody's idea of a high-minded solution. But Steyer takes a zero-sum view: If moneyed oil interests are paralyzing our political will to confront climate change, then moneyed antagonists are required to counter them from the left. As he hikes down the trail – "Good morning!" he says to every passing hiker – he spends a fair amount of time contrasting himself to his analogues on the right, especially the Koch brothers, the plutocrats famous for backing pro-business candidates with their group Americans for Prosperity. Steyer says coal-industry baron David Koch is "taking the most incredible risk that I've ever seen someone take, of going down in history as just an evil – just a famously evil – person!"

Measured political rhetoric is not Steyer's style. But when we finally arrive at the plunging cliffside, with a stunning view of San Francisco Bay and the Golden Gate Bridge under a vaulted sky, the moneyman goes uncharacteristically silent. Standing near the edge, he turns to me and grins, his arms lifted in triumph, and presents the breathtaking horizon like it's the last slide in his personal PowerPoint presentation.

"Yes!" he declares.

After the hike, we climb back into his wife's Toyota hybrid and Steyer plays some Rod Stewart on the radio and idly recites Rud­yard Kipling: "On the road to Mandalay / Where the flyin'-fishes play / And the dawn comes up like thunder / outer China 'crost the bay –

"Good grief!" he says. "They're blocking my street."

Steyer is taking us on a detour to show off a new house he and his wife, Kat Taylor, just bought near China Beach, a multimillion-dollar fixer-upper that looks out over a cliff to the glittering waters of San Francisco Bay. "Do the words water amenity mean anything to you?" he says, jovially.

Back in the neighborhood of Pacific Heights, at his old brownstone, Steyer shows me the oil paintings adorning his walls ("These are all living California artists," he whispers) and proceeds to the kitchen for some organic tea. "Smell that lemon," he says, holding up a Meyer, freshly plucked from his garden. "Sometimes I just squeeze them on my hands."

On the walls are pictures of his four grown kids as towheaded children – "boy, boy, girl, boy," Steyer recites – and his many beloved dogs, living and dead, all of whom have coffee mugs made in their likeness. His wife, an activist and lawyer who has five tattoos and the toothsome charm of Sally Field, drops in for some casual gossip about a financier who Steyer says has a "questionable business model." The house has the homey, lived-in feel of a guy who used to be a mere millionaire. Or maybe just a billionaire with limited pretensions.

Not that he's laid-back. Steyer's idea of a Christmas vacation was taking his wife and kids on a five-day hike to the peak of Kilimanjaro two years ago, where they gobbled acetazolamide pills to avoid altitude sickness. (Steyer saw the trip as a convenient diversion: His oldest son was doing nonprofit work in Tanzania at the time.)

Though he has choice words for David Koch, they're both part of the billionaire boys' club, and Steyer is an apologist for the winner-take-all world of capitalism. When I bring up the controversial role of Goldman Sachs in the 2008 financial crisis, when then treasury secretary Hank Paulson, a former Goldman CEO and a pal of Steyer's, appeared to favor his old firm during the multibillion-dollar bailout, inspiring the 99 percent backlash, Steyer admits that his former employer "got deferential access and deferential outcomes, and that anybody who doesn't get that is a fucking idiot."

It's a surprising populist outburst coming from a former Goldman Sachs man. But in the same breath, Steyer says Paulson did a good job and, all things considered, everything worked out pretty well for the U.S. economy. And anyway, "that's the power of finance in the world," he says, shrugging. "You're fighting city hall."

Steyer is himself part of the city hall machinery. When it comes to climate change, however, he's the power willing to speak truth to the other power. "People are scared to tell the truth," he says, lowering his voice to a serious whisper. "And you want to know something? They're not stupid. Because you get punished for it."

Are you afraid? I ask.

"I'm too stupid," he says.

Steyer, of course, is far from stupid. Intensely analytical and feverishly focused, he is an overachiever both by disposition and by upbringing, spending most of his life wired into America's most elite institutions. He came from a well-off family in New York City, the youngest of three sons, his father a corporate litigator at Sullivan & Cromwell, the white-shoe law firm that has represented Goldman Sachs for decades. (The firm also represented Exxon, and among colleagues the elder Steyer was known as "Mr. Oil.") Growing up on the Upper East Side, the Steyers had a housekeeper and a nanny, and they summered in Nantucket, but Tom's mother, a progressive and principled woman whose tough-love mothering included washing his mouth out with soap when he swore, was a socially minded educator who at one point taught felons to read in a Brooklyn detention center. "I once asked my mother, 'Who are we? Who is our family?' " recalls Steyer. " 'Well,' she said, 'we've never been rich or powerful, but we've always been well-educated and we've participated in our community.' "

Steyer went to a distinguished Manhattan boys' school called Buckley that in the 1960s taught boxing in gym class. "The whole key to a fight is throwing the first punch," observes Steyer.

When he graduated with honors from Buckley, his older brother Jim recalls the headmaster encouraging the class to "hitch your wagon to a Steyer!"

At Exeter, Steyer continued his competitive march: first in his class, chairman of the student council, lettering in three varsity sports. He went to Yale, where his father had been editor in chief of the Law Journal, and became captain of the soccer team while earning degrees in economics and political science. On the soccer field, he was a sweeper, tasked with knocking down opponents. "I think I played soccer every single day, 365 days a year," Steyer recalls.

His interest in investing came early. After spending a summer working on a cattle ranch in Nevada, he came home and bought stocks of agricultural equipment manufacturers, observing that they made the lion's share of the profits in ranching. "That is not a normal reaction to two months on a horse," he confesses.

After graduating from Yale, he spent two years working as an analyst at Morgan Stanley, slogging through 90-hour weeks. To blow off steam, he played pickup soccer matches in Central Park with some particularly aggressive players. During one game he was kneed from behind by an opponent, severely injuring his right leg. He still walks with a slight hobble.

Steyer got into both Harvard and Stanford business schools, but was convinced by his brother Jim that there was a better life to be had out West. It was a fortuitous decision: During his second year, he met fellow overachiever Taylor, a Harvard grad and a former track champ who was simultaneously getting law and business degrees from Stanford. It was a match made in Ivy League heaven.

While at Stanford, Steyer says, he saw a listing for a job at Goldman Sachs, working under rising star Robert Rubin, the future secretary of treasury in the Clinton administration. Steyer was qualified for the job, though it could not have hurt that his father was a litigator at Goldman's preferred law firm. When Steyer told Rubin he wanted to spend the summer working in politics before he started at Goldman, Rubin helped him get a job with Walter Mondale's presidential campaign in 1983.

It wasn't the civics-class version of politics Steyer had naively dreamed about. When he set up a successful fundraiser for Mondale in Seattle, his boss stole the credit and wouldn't allow Steyer to attend. "It was a little shocking to me that it's kind of a tough, cutthroat business," he says. "I never thought of it as a business."

At Goldman Sachs, Steyer was part of a small, elite division conducting, among other things, risk arbitrage, betting on the new wave of corporate mergers and acquisitions. The alumni of Steyer's group would become Wall Street titans, a powerful network whose investment models foreshadowed the rise of hedge funds, financial deregulation, and the monster profits of the next corporate age – including, to be sure, the collapse of the economy in 2008. But after only two years, Steyer decided to leave Goldman and strike out on his own. Taylor, a native Californian and an avid equestrian, yearned for the wide-open spaces of the West, where there was no shortage of opportunity for a Goldman Sachs man adept at the hottest investing strategies.

He named his firm Farallon, after a shark-infested shoal on the California coast, and it quickly earned a reputation for take-no-prisoners investing, raking in millions, and eventually billions. Steyer picked through the books of flagging or collapsed companies, made sophisticated bets on them, and often conducted ruthless campaigns, legal and corporate, to force their value up and reap a massive return.

As he approached 40, however, Steyer had what he has described as a revelation. He became more involved in the local Episcopalian church, the religion of his mother (his father was a non-practicing Jew), and sought celestial perspective from his myopic financial concerns. "I think I was on this very straightforward escalator – grammar school, high school, college, get a job on Wall Street, kind of everything leads to the next thing," he says. "But at what point do you get to step back and say, 'I'd like to take a broader view of my time on this planet?' "

His oldest brother, Hume, a lawyer in New York, says Steyer worried that his wealth and success had put him in a room full of mirrors in which he looked pretty damned good – but maybe a little too good. "Tom got a pretty healthy dose of ass licking, and he was frightened by it," Hume says. "And he tried to cast around for a new way to think about things that would put him in his proper place."

Steyer was a very wealthy man who wanted a legacy other than his bank account. "I really don't want the highlight of my life to be my success as an investor," he says. "Genuinely. My idea of death would be that person who is still telling you about that goal he scored in 1974."

For a second, there is a comic beat. Wait, I ask, did Tom Steyer score a goal in 1974?

"Yes, I did," he says.