After Swalwell’s Fall, Tom Steyer’s $120 Million Gamble Is Paying Off

Nearly half a billion dollars, two campaigns, and one Eric Swalwell implosion later, Tom Steyer suddenly appears closer than ever to winning elected office.

Sacramento elected officials and strategists initially rolled their eyes when the billionaire climate activist began ramping up for his run for California governor, recalling how he plowed some $340 million into a failed 2020 presidential bid that resembled a high-priced vanity project. But Steyer vaulted himself into the top tier of the wide-open race with a $120 million advertising blitz and a concerted courtship of the state’s progressive powers.

He is spending more on advertising than any other campaign in America so far this cycle, including Democrats’ all-in gerrymandering push in California. Weeks before the June primary, he has already nearly quadrupled the roughly $33 million spent by Gavin Newsom’s 2018 run for governor.

And with Swalwell’s exit in the face of sexual misconduct and assault allegations, Steyer — more than any other contender here — is picking up the pieces. On Tuesday, the heavy-hitting California Teachers Association, which had endorsed Swalwell, threw its support behind him. Even President Donald Trump has taken notice — likely to Steyer’s benefit.

“I’d been hoping Tom would break out of the pack for a long time, and I want to be part of that momentum,” said Rep. Jared Huffman, who endorsed Steyer on Sunday. “This pie is going to be carved up in a very different way now, and Tom has a tremendous opportunity to catapult himself to the front of this pack.”

Steyer’s spending allowed him to steadily climb out of the low single digits and into the upper echelon of a brimming Democratic field, along with Swalwell and former Rep. Katie Porter. Now, with Swalwell out, Steyer is dominating the airwaves, with a rotation of ads so heavy he is nearly omnipresent in California’s expensive media markets.

The endorsement from the Teachers Association was a major win for Steyer. And there may be more to come. Major labor groups like the CTA and SEIU had strongly considered endorsing Steyer before choosing Swalwell and subsequently retracting their support.

Steyer made a hard push to appeal to labor, vowing to advocate for priorities like a commercial property tax increase that has long eluded unions. He picked up groups representing nurses and school employees, but convincing union rank-and-file to support the billionaire was still a hard sell.

Now CTA’s endorsement could send a signal to the wider field. One political consultant who had worked on the governor’s race and was granted anonymity to speak candidly said the “billion-dollar question” was where Swalwell’s supporters would go — noting that if one contender picks up momentum, there could be a rush to get on board.

“All this territory that was claimed is up for grabs,” the consultant said. “If polls come out showing Steyer picks up what Swalwell left on the floor, there’s going to be a rush to him.”

The jockeying for Swalwell’s backers began almost immediately after the San Francisco Chronicle and CNN published stories on Friday detailing allegations of sexual assault and misconduct against him.

“You’re going to find this hard to believe, but there’s been a lot of incoming calls,” Steyer quipped to reporters this week.

A trickle on Friday turned into a cascade over the weekend as contenders made their case to the elected officials and groups that had just disavowed Swalwell. Porter reached out to former House colleagues. Steyer worked labor groups that had chosen Swalwell over him.

“Every campaign is doing their best effort to pull all the Swalwell people into their camps — they’re all doing their jobs,” said Assemblymember Tasha Boerner, who un-endorsed Swalwell and threw her support to Steyer.

The race for governor is crowded even with Swalwell gone, and the deluge of money hasn’t been enough to make Steyer the lone frontrunner. It is possible that he will simply spend his way to a ceiling.

“He can boost himself, he can do negative on Katie (Porter), he can do negative on (San Jose Mayor Matt) Mahan — he can do it all,” said Addisu Demissie, a Democratic consultant and veteran of statewide races. “But the flashing yellow light is: He spent $120 million to be tied with Eric Swalwell and now potentially tied with Katie Porter — will another $120 million fundamentally change that?”

Porter hammered that point in a memo, compiled before Swalwell suspended his campaign, that noted she was neck-and-neck with Steyer despite his overwhelming spending. The memo also noted polls showing Porter was the second choice for a plurality of Swalwell voters — a finding also contained in a POLITICO survey.

Meanwhile, supporters of Mahan, the tech-backed San Jose mayor who has trailed in the polls, have touted an upwelling of millions of dollars into his super PAC. The group argued in a memo this week that Mahan is “the fresh face voters are excited to meet” as his campaign trumpeted an internal poll putting him in third place. Other low-polling candidates also see a long-awaited breakout moment. 

And an anti-Steyer PAC — funded by real estate developers and energy utility interests alarmed by Steyer’s calls to lift commercial property tax limits and break up public utilities — has been running ads assailing Steyer for his past investments in private prisons. Spokesperson Amelia Matier said in a statement that “the stakes of this race remain the same” and “we’re not going to sit back and let a hedge fund billionaire buy the governor’s office.”

But the ad wars could yield unpredictable results, as in the 1998 governor’s race where two high-spending candidates essentially canceled each other out, handing the governorship to Gray Davis.

“There are more interests and individuals who are anti-somebody than pro-somebody,” Demissie said. “If you go anti-Steyer, who does that help, and do you like that person?”

Boerner’s circuitous path to backing Steyer is emblematic of an extraordinarily fluid race. He is the fifth candidate she’s endorsed, after her prior picks withdrew. She said in an interview that Steyer shared her vision of advancing an ambitious environmental agenda and taking on utilities, which Steyer has vowed to dismantle.

But underlying those policy considerations is a cold political calculus. Democrats had begun lining up behind Swalwell in part to avoid splitting the vote so many ways that two Republicans snuck into the top two spots in California’s open primary. Now some believe Steyer is the best person to prevent a catastrophe for the party.

“I’m interested not in just picking someone I can agree with 100 percent of the time, I’m looking for someone we can coalesce around to ensure we have a Democrat in Sacramento,” said Assemblymember Corey Jackson, who, like Boerner, switched allegiances.

Jackson said he believed Swalwell had been “creating a governing coalition” that folded in various factions of the Democratic Party. With Swalwell out, Jackson said, Steyer “is starting to do the same thing.”

“Obviously in the beginning he was trying to consolidate the progressives behind him,” Jackson said, “but now he’s started to realize he needs to reach out even more to have a coalition.”

Blake Jones contributed reporting.