Voters this week approved his Proposition 39, which closes a tax loophole that was championed by Republicans to benefit out-of-state corporations. It will send an additional $1 billion a year to the state. In 2010, he helped defend the state's greenhouse gas emissions law by funding the successful opposition to a ballot initiative that was being pushed primarily by out-of-state business interests.
Steyer, a Democrat from San Francisco and the founder of Farallon Capital Management, says he is shifting away from his investment activities and toward public policy, specifically clean energy and government reform.
While his fortune can make him a political rainmaker, Steyer has been coy about whether he has plans to run for office.
"I honestly haven't thought about it seriously," Steyer told The Associated Press in an interview Wednesday. "The times that I have gotten involved, which I did in Prop. 39 and 23, were times when I really felt there was something wrong and for some reason nobody else was doing it.
"My interest is in participating in improving things, and I'm open to a lot of ideas, but I have no intention of doing that. I would only do it if I thought there was something really wrong that I could actually make a difference."
The shift away from the hedge fund he started in 1986 has been evident. In September, he spoke at the Democratic National Convention about the importance of clean energy to the national economy. During the campaign season, he appeared in ads supporting Proposition 39, asking voters to "help start a California comeback." And this week, he attended the California Democratic Party's election night celebration in Sacramento.
According to campaign finance figures, the Yes on Prop. 39 campaign was funded almost entirely by more than $32 million from Steyer, who said the initiative was an issue about tax fairness. Proposition 39 closes a provision that allows multistate corporations to choose between two tax formulas. Supporters said the optional tax formula was encouraging corporations to move jobs out of state.
While there was no formal opposition campaign, some business and anti-tax groups argued that it would make California less business friendly.
Steyer crafted Proposition 39 so the money would be split between the state general fund and energy efficiency programs for the first five years. Democratic leaders endorsed the measure after they failed to get the loophole closed through the Legislature.
"Tom is the kind of guy you really want in politics because even with his wealth and his willingness to use it, he's not a 'my way or the highway' guy," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "He's a relationship guy. I think he's developed a very good reputation around here."
Art Pulaski, executive-secretary treasurer of the California Labor Federation, which represents more than 2 million members, said Steyer differs from many other wealthy Californians who have forayed into politics. Pulaski described the businessman as a big thinker who is concerned about solving problems.
"For most of these folks, it's about ego," Pulaski said. "For Tom, I think he's a driven person, so he really is different. Not that I think he's never going to run for governor or anything like that, but who knows?"
Steyer, 55, graduated from Yale and received his MBA from Stanford. He founded Farallon in 1986, and the hedge fund how has $20 billion in assets. He recently announced that he plans to step down as co-senior managing member and leave his other investment activities at the end of the year.
Forbes has estimated his worth to be $1.3 billion.
He has given millions to his alma maters to aid research into sustainable energy. He co-founded Advanced Energy Economy, a nonprofit that promotes innovation within the alternative energy industry.
Steyer and his wife, Kat Taylor, have four children. Among their projects is OneCalifornia Bank, an Oakland community development bank they founded.
The couple also joined a group of wealthy Americans that includes Warren Buffett, Bill Gates and Michael Bloomberg in the "Giving Pledge" to donate a majority of their wealth to charity.
Steyer says he's not sure what he'll do next. He remains committed to shaping the nation's energy policy through innovation, not extraction. He says there are immense economic and environmental opportunities in the face of climate change.
"We have the absolute capability of meeting this challenge, and surmounting it and profiting magnificently from it," he said. "But we have to first acknowledge it and set our minds to it."