Two ads from the conservative Crossroads organizations claim Democratic Senate candidates in Iowa and Michigan who oppose the Keystone XL pipeline are backed by an environmental activist who “stands to profit by blocking Keystone.” That’s based on outdated information on the activist’s former investments.
American Crossroads, a super PAC founded with the help of former George W. Bush adviser Karl Rove, and Crossroads GPS, its 501(c)(4) sister organization, launched the ads in September against Rep. Bruce Braley in Iowa and Rep. Gary Peters in Michigan, respectively. Both ads imply that the Democrats’ opposition to Keystone came for a price — the support of billionaire Tom Steyer, whose NextGen Climate Action group has opposed Braley’s and Peters’ GOP challengers through political advertising.
The Crossroads groups had spent about $16 million combined as of Sept. 23 on independent expenditures in midterm races, while NextGen had spent about $9 million.
The ads picture Steyer and call him only “a California billionaire.” He, and his group NextGen Climate Action, do oppose the Keystone XL pipeline, a proposed oil pipeline of more than 1,000 miles from Alberta, Canada, to Nebraska, for environmental reasons. (See our March 10 story “Pipeline Primer” for a breakdown of the competing claims about the pipeline’s impact on jobs and climate.)
The ads imply that Braley and Peters are doing what Steyer wants — oppose the pipeline project — because he’s spending millions to defeat their opponents. The ad against Braley says the congressman is “on the side of billionaire special interests, not Iowa workers.” The spot against Peters says he sided with Steyer on Keystone and “now, that billionaire is spending big bucks to help Peters’ campaign.”
It’s correct, as the Braley ad says, that the congressman voiced support for the pipeline in 2012 and has been opposed to it since at least May 2013, when he voted against authorizing the northern leg of the Keystone XL project. But in either case, there’s no evidence presented of such a quid pro quo. Braley says he’s opposed to the project because it threatens renewable energy jobs in Iowa and because there’s no guarantee the oil transported by the pipeline would stay in the United States. Peters, who also voted against the Keystone XL project in May 2013, has questioned the environmental effects, and proposed an amendment to require an investigation of the impact of pet coke, an oil byproduct that became an issue in Detroit when piles of it were stored along the river.
The ads claim Steyer has a financial motive for opposing the pipeline. “Peters sided with a California billionaire who could profit if the pipeline is blocked,” says one ad. “Now, a California billionaire who stands to profit by blocking Keystone is spending big to help Braley’s campaign,” says the other.
Would Steyer, a former hedge fund owner, profit if the pipeline were blocked? We contacted the spokesman for Crossroads to ask for support for the claim but didn’t receive a response. The groups aren’t the first, however, to question Steyer’s financial motives: Republican Sen. David Vitter did so in 2013. But the claim is now based on outdated information about the hedge fund’s investment in a company that owns an alternative pipeline.
Steyer gave up ownership of Farallon Capital Management at the end of 2012 to pursue a new career in environmental activism. (He has called the switch from billionaire businessman to activism his “Paul on the road to Damascus” moment.) Farallon invested in energy companies, among other sectors, including oil, gas and coal companies. It invested hundreds of millions in an oil and gas company called Nexen, and it invested in Kinder Morgan, an energy company that owns a pipeline that runs from Canadian tar sands to Pacific ports. A Washington Post profile of Steyer published in June said that the Kinder Morgan pipeline would be an alternative to Keystone if the latter project didn’t come to fruition, according to industry analysts.
According to the Post report, Steyer instructed Farallon to divest his personal holdings of money in tar sands and coal when he left the company. A year later, in 2013, he said such divestments should also include oil and natural gas. Steyer spokeswoman Heather Wong told the Post: “[S]ince directing Farallon to divest the coal and tar sands holdings, Tom expanded the divestment directive to include all of his fossil fuel energy holdings and as of this month he will be divested out of fossil fuels altogether.”
After he faced criticism for the Kinder Morgan investment, he pledged in 2013 to donate any profits he had received from it to a charity, namely wildfire victims in the United States. In June 2014, he announced he and his wife would put $2 million in a new Climate Disaster Relief Fund to help victims of extreme weather including wildfires. His spokeswoman told the Post that his profits from Kinder Morgan were valued at around $1.7 million.
The spokeswoman also said that Farallon was no longer invested in Kinder Morgan, which can be confirmed through the fund’s filings with the Securities and Exchange Commission.
So, in the not-too-distant past — 2012 — Steyer could have stood to profit if the Keystone pipeline project had been blocked. But since then, he has left the investment fund and pledged any profits from the rival-pipeline company to a newly created charity. More important, his old hedge fund no longer has any holdings in that pipeline company.
As for the groups behind these ads, American Crossroads has received funding from oil companies. We don’t know whether Crossroads GPS has received such financial backing, since it does not have to disclose its donors.
— Lori Robertson