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Opinion: Morning Examiner

A look behind the curtain hiding Tom Steyer's fortune

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Beltway Confidential,Opinion,Mark Tapscott,Morning Examiner,2014 Elections,Coal,Australia,Oil,Natural Gas,Indonesia,Tom Steyer

Silicon Valley billionaire Tom Steyer has generated lots of adoring coverage in the mainstream media with his promise to spend $100 million to elect Democrats who oppose the Keystone XL pipeline.

Fighting Keystone, which would carry millions of barrels of Canadian tar sands oil south to U.S. refineries, is just one part of Steyer's activism on behalf of "green" energy and against fossil fuels, including coal and natural gas.

Outside of the mainstream media, however, independent journalists and bloggers are doing deep-dive research into how Steyer made his own fortune running the Farallon Capital Management hedge fund.

Fortune built on Asian coal

It turns out that much of Steyer's wealth is the fruit of immensely profitable investments in development of Indonesian and Australian coal.

Indonesian interests produce half of the coal burned in Chinese power plants. Farallon was involved in a hedge-fund consortium in 2008 that invested heavily in Adaro Energy, one of Indonesia's biggest coal producers.

Farallon is also heavily involved in financing PT Bumi Resources, another huge Indonesian coal mining operation. Bumi is also the focus of a growing scandal involving some unusual financial accounting practices.

Adaro is also a major investment player in a controversial coal mining operation in Borneo that Greenpeace claims has caused significant environmental problems.

Then there's Australia

Farallon has invested heavily in fossil fuel production in the land Down Under. Unlike its Indonesian investments, though, Farallon is profiting from coal and oil and gas operations.

Meo Australia Ltd is an oil and natural gas company that is conducting off-shore drilling in Australia and Indonesia. Farallon put $10 million towards the latter project.

Most controversial, however, is Farallon's involvement in Whitehaven Coal's Maule Creek open pit mining project. Whitehaven is the second-biggest Aussie coal company.

The Maule Creek project has drawn bitter opposition from Australian environmentalists who claim it will inflict irreparable damage on, among much else, the habitat of Koala bears.

Divestment now and forever?

Last year, Steyer announced that he would get rid of all fossil fuel investments in his portfolio by the end of 2013.

But, as Powerline noted last month, "by their nature, hedge funds are shadowy organizations and Farallon is no exception. Farallon staff do not talk to the press.

"Their website provides virtually no information and, because it is a private fund, Farallon is not required to report details of its investments." Would anybody know if Steyer took on a new position with his old firm?

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Author:

Mark Tapscott

Executive Editor
The Washington Examiner