Progressive Tom Steyer’s tax returns show offshore earnings, private equity stakes
Democratic gubernatorial candidate Tom Steyer has made millions of dollars investing in offshore private equity funds connected to islands known for lax tax policies, according to tax returns posted Thursday.
The forms also show Steyer, a billionaire financier turned Democratic megadonor and environmentalist, has invested tens of millions in private equity funds despite railing against the industry on the campaign trail.
Many private equity and hedge funds are domiciled in places like Bermuda or the Cayman Islands, jurisdictions known for levying little or no taxes at the fund level. The setup is legal; Steyer paid U.S. taxes on his earnings.
But the investments may complicate Steyer’s campaign narrative as an anti-plutocrat progressive who aims to tax corporations and the rich to fund policies like single-payer health care.
“California is one of the wealthiest places in the world, but too much of that wealth is locked away in tax loopholes and corporate giveaways,” Steyer told an audience at a Sacramento earlier this month.
He put it more succinctly in a December X post: “Tax me more,” Steyer said.
A California Democratic Party poll released Tuesday found Steyer drew 10% support from likely voters, behind two Republicans — Fox News host Steve Hilton and Riverside County Sheriff Chad Bianco — and tied with Katie Porter, a former Democratic congressional representative, and Rep. Eric Swalwell, D-Dublin. The businessman and philanthropist has spent $86 million of his own funds on the governor’s race since he entered it in November.
All candidates for governor are required to submit the last five years of their tax returns under a 2019 law. The redacted returns were posted to the secretary of state’s website late Thursday.
Steyer’s 2021 to 2024 tax returns show he made at least $15 million from investments domiciled in Bermuda run by General Atlantic Partners, a private equity firm.
In a statement, Steyer campaign spokesperson Anthony York said those investments are commonly used when a U.S. investment firm pools money from international investors to make investments in companies located in other countries. He noted third-party fund managers, not Steyer, had made the decision on where to base the funds.
“They are often structured this way to avoid duplicative layers of taxation for all investors (those based in the U.S. and those abroad),” York said in an email. “For Tom, the income from these investments flows directly to him, and he then pays all U.S. taxes on those investments. “
Steyer is an investor in the private equity industry he criticizes
Steyer earned at least $67 million from U.S.-based private equity funds offered by Hellman & Friedman and Golden Gate Capital in 2021 alone.
Critics contend the industry plunders distressed companies, leading to downsizing and cost-cutting that hurts local communities, though other research has pushed back on that reputation.
Steyer has made the criticism himself, saying at a recent town hall that the industry “is basically turning everything into a bank.”
“They don’t own manufactured housing so they can provide housing,” he said. “They own manufactured housing so they can make money and squeeze money out of housing.”
Steyer faced questions about his offshore investments before.
In January, POLITICO reported his investment firm, Galvanize Climate Solutions, had around $1 million managed in a fund based in the Cayman Islands. Steyer told the outlet the funds existed to provide a vehicle for foreign investors rather than to dodge taxes.
In a 2020 interview, The New York Times’ editorial board asked him about a letter his former firm, Farallon Capital, sent investors in 2000 telling them it planned to use an offshore entity as a tax shelter for their earnings.
“Farallon did tax planning for its clients according to the laws of the United States of America,” Steyer said. “Do I agree with those laws? No. You can take a look at my taxes and see what I do. Do I think that’s the way it should be? No.”
