Billionaire California gubernatorial candidate and climate activist Tom Steyer is facing renewed scrutiny over his lingering connection to a hedge fund that has backed coal projects.

Steyer has long maintained that he left the investment world to focus on climate change, telling voters he “walked away” from his hedge fund to fight global warming.

While he did step down as CEO of San Francisco hedge fund Farallon Capital in 2012, financial records show he never fully cut ties to the firm he founded — even as it expanded lending to the coal industry in recent years, the New York Times reported.

Farallon, one of the largest hedge funds in the US, has increasingly financed coal projects, especially as major banks pulled back under pressure from environmental activists. The firm has helped fund coal operations in countries like Australia, including loans to coal producers and infrastructure tied to mining.

“Farallon Capital has bailed out coal mining companies in Australia and enabled the continuation and expansion of coal mining,” climate advocate Will Van De Pol told the Times. “Anyone closely connected to Farallon and its investment decision-making that claims commitment to climate action needs to be heavily scrutinized for the negative climate impacts of Farallon’s decisions.”

Steyer’s campaign said he has taken steps to remove himself from investments related to the industry.

“He remains a passive investor,” his campaign told the Times. “Employees at Farallon screen out any fossil-fuel-related holdings from his portfolio, and he no longer earns a share of the profits from the fund.”

Financial disclosures show he has maintained significant investments in Farallon over the years.

During his failed 2020 presidential run, those holdings were valued at at least $110 million. More recent filings show that Steyer’s stake has dropped to about $34.7 million.

The complexity of Steyer’s wealth makes it difficult to fully track where his money is invested. His fortune, estimated at $2.4 billion, is spread across hedge funds, private equity and other ventures.

Steyer’s supporters argue that the candidate has shifted his focus and resources toward clean energy.

“There’s a distinction between Farallon and Tom Steyer’s investment. His money has been scrutinized time and time again,” said Matt Abularach-Macias, political director of California Environmental Voters.

He added that Steyer had “atoned for his past investments and put his money where his mouth is, into clean energy and climate action.”

Steyer has indeed poured money into green initiatives, co-founding a clean energy investment firm and funding climate advocacy groups. His campaign says he has policies in place to avoid direct fossil fuel investments and will donate any unintended profits from such exposure to charity.

Questions have also surfaced about his overseas financial ties.

At a recent campaign event, Steyer said: “I don’t have any money in the Cayman Islands… I have no money overseas.”

But tax filings reviewed by the Times show investments connected to Cayman-based funds and other foreign holdings, including a British bank account. His campaign clarified that he does not personally hold accounts in those locations but invests in funds based there — a common structure in global finance — and emphasized that he pays US taxes on all income.

The issues arise as Steyer gains ground in the governor’s race following recent shakeups among Democratic candidates. His massive personal spending on the campaign — more than $130 million so far — has helped make him a leading contender.

The sudden downfall of Eric Swalwell, once a leading contender, is welcome news for the billionaire, who has surged in the polls.