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SACRAMENTO — The big-money backers and Democratic heavyweights who tried to crown Rep. Eric Swalwell as California’s next governor before his scandal-plagued exit from the political arena are now scrambling to find a new favorite among the candidates they either spurned or actively tried to undercut.

Swalwell (D-Dublin) announced Monday he would resign his seat in Congress. He faced potential expulsion and an ongoing criminal investigation after reports were made public Friday alleging he sexually assaulted a young female staff member and engaged in inappropriate behavior with three other women, including sending them nude photographs. Swalwell denied the allegations and, in his announcement Sunday that he was dropping out of the governor’s race, vowed to fight to clear his name.

The immediate beneficiaries of Swalwell’s fall are likely former Orange County Rep. Katie Porter and billionaire financier Tom Steyer. Both were challenging Swalwell to be the top Democrat in the race even though each has faced attacks from within the party on various issues.

This new round of chaos only feeds the anxiety that has enveloped the California Democratic Party for months, stirred by fears that the lack of a singular party front-runner might lead to two Republicans winding up on the November ballot. Swalwell’s exit from the race also may revive candidates who have been languishing in the midsection of recent opinion polls — former U.S. Health and Human Services Secretary Xavier Becerra, former Los Angeles Mayor Antonio Villaraigosa and San José Mayor Matt Mahan — adding to the uncertainty.

“What happens now depends on what campaigns do to take advantage of this,” said Andrew Acosta, a Democratic political consultant who is not involved in any of the campaigns. The other candidates, he said, “can use this as an opportunity to make their case.”

They wasted no time.

Porter’s campaign on Sunday circulated internal polling showing that nearly half of Swalwell’s supporters listed her as their second choice. Steyer announced endorsements from lawmakers including Northern California Rep. Jared Huffman, who was among the first House Democrats to call on Swalwell to resign from Congress.

Others quickly used Swalwell’s departure as a fundraising tool.

“This changes the race,” Mahan’s fundraiser Stephanie Daily Smith wrote in an email blast to supporters on Sunday, adding that Swalwell “had been gaining real traction in the Bay Area media market and now that vote share is up for grabs.”

Former state Controller Betty Yee told her email list on Monday that “we can forget the polls” that showed Swalwell as a front-runner, suggesting he led because of an “obsession with who looks the part.”

“I’m not flashy, and I don’t ‘look the part’ of what the talking heads think wins,” she said.

Swalwell’s campaign had been gathering momentum over the last month. A poll released in mid-March by UC Berkeley’s Institute of Governmental Studies and co-sponsored by The Times showed that Swalwell and Porter were both supported by 13% of likely voters, with Steyer not too far behind. The top Republicans in the race, former Fox News commentator Steve Hilton and Riverside County Sheriff Chad Bianco, led with 17% and 16% support, respectively.

Elected officials, labor unions and other groups that had endorsed Swalwell abandoned him en masse after the allegations against him were publicized. But it’s unclear which candidate those influential voices will lend their support to next.

While many Democrats see Steyer and Porter as the next-most viable candidates, they each have their own baggage. Steyer has faced criticism on the campaign trail over his former hedge fund’s investments in a private prison company that is now housing people detained by federal immigration authorities, while Porter’s campaign is still haunted by embarrassing videos in which she berated a staffer and belittled a television reporter.

Primary election ballots will begin hitting California voters’ mailboxes in just a few weeks, and Swalwell’s campaign had been gaining steam and financial support that may now be up for grabs by other candidates.

Powerful organizations including the California Medical Assn. and SEIU California have poured millions into independent expenditure committees supporting Swalwell. But as the scandal unfolded, their leaders called emergency meetings to withdraw their support and pulled the plug on ads supporting him. Neither has indicated whether they would re-endorse in the race.

Over the weekend, Democratic members of the Legislative Women’s Caucus hastily organized calls with Porter and Yee — the only women left in the field of top candidates — according to two people familiar with the conversations. Though several of the lawmakers had not planned on backing either candidate, they’re reconsidering, driven by anger at Swalwell and frustration that other qualified women, Lt. Gov. Eleni Kounalakis and former state Senate President Pro Tem Toni Atkins, previously dropped out of the race.

“Epstein files keep coming, Cesar Chavez rocked California and now this,” one lawmaker on the calls said. “If we cannot elect a woman to the state’s highest office in 2026, what is wrong with us?”

Swalwell reported raising more than $7.4 million in direct donations through April 9, according to a Times analysis of campaign finance data. About 60% of the contributions were from California donors.

Stephen Cloobeck, another Swalwell benefactor and longtime Democratic donor, said he is changing his party registration and is considering endorsing Hilton for governor.

“Don’t be surprised,” Cloobeck said in an interview on Monday.

“We agree on probably 90% of the issues,” he said, adding that he had met Hilton about a half-dozen times and appreciated his campaign message. “We are friends. I’m for unity. I come from old-school unity. I don’t cast aspersions.”

A protege of the late Sen. Harry Reid (D-Nev.), Cloobeck entered the gubernatorial contest but dropped out once Swalwell, with whom he had a long-term friendship, jumped into the contest. Cloobeck endorsed the congressman and put about $1 million into an independent expenditure committee backing him. Swalwell stayed at Cloobeck’s Beverly Hills mansion after the news of the allegations against him broke — until Cloobeck kicked him out.

Cloobeck said he knows all of the seven prominent Democrats who remain in the governor’s race and has long said he isn’t impressed by any of them. He said he wished the California Legislature would amend the state Constitution so he could file to reenter the race.

Donna Bojarsky, a longtime Democratic political insider in Los Angeles, attended Swalwell fundraisers this year thrown by Hollywood business leaders.

“People are horrified,” Bojarsky said. She said there have been rumors about sexual indiscretions, but nobody suggested allegations of sexual assault.

Swalwell has close ties to the industry and was set to be an executive producer on a film about the nation’s gun crisis before pulling his name over a labor dispute. He also maintains a real estate investment firm and media company geared toward producing television, film and online content.

Actors Sean Penn, Robert De Niro and Jon Hamm are among several Hollywood figures who donated to Swalwell’s campaign for governor.

Bojarsky hopes the silver lining of the scandal is that there “might be more of a race” as people scrutinize the field of candidates.

“People are paying attention,” she said.

Billionaire hedge fund founder turned environmental warrior Tom Steyer, a leading Democratic candidate for California governor, is facing mounting questions about how he earned his wealth — notably investments in private prisons that are now being used to house undocumented immigrants facing deportation.

Some of the most vicious political attacks come from his Democratic rivals and Sacramento special interest groups as the June 2 primary election fast approaches, but Steyer has been dogged for years about his past, controversial business ventures and how they help fund his unbridled campaign spending.

Steyer, 68, faced that ire during a town hall event in San Diego last week.

“Tom, you’re not going to come to San Diego and ignore this detention center,” Holly Taylor, a 37-year-old Democrat screamed at Steyer, holding signs with QR codes to help detainees at an Otay Mesa private prison that Steyer’s hedge fund backed. “It’s a concentration camp. They’re drinking water out of a toilet.”

Taylor, a crime scene cleaner from Pacific Beach, is among scores of people who gather weekly at the facility to raise money for detained immigrants to provide them some comfort amid the Trump administration’s Immigration and Customs Enforcement raids.

In 1986, Steyer, co-founded Farallon Capital, which had shares valued at $89.1 million in the Corrections Corp. of America in 2005, according to the Securities and Exchange Commission. That company, now known as CoreCivic, operates private prisons around the nation that are housing people picked up by federal immigration agents, including the one in Otay Mesa.

It is not the first time Steyer has faced criticism about the connection with private detention facilities. At the California Democratic Party convention in February, protesters dressed in orange prison jumpsuits sought to draw attention to the controversy.

His Democratic rivals have also seized upon the issue to question the billionaire’s progressive credentials.

“Before he was a progressive, he made millions off of companies that operate ICE detention centers, that operate private prisons that incarcerated young children,” state Supt. of Public Instruction Tony Thurmond said during a recent interview with a political influencer known as Mrs. Frazzled.

“His entire campaign is built on the backs of kids in cages,” Rep. Eric Swalwell, (D-Dublin) wrote Tuesday in a post on X.

People protest outside of a lunch held by California gubernatorial candidate Tom Steyer at the 2026 California Democratic Party State Convention in San Francisco on Feb. 21.

(Jeff Chiu / Associated Press)

Several years earlier, Yale University’s graduate teachers union called upon the school — Steyer’s alma mater — to divest from Farallon because of concerns about how the private prison company treated detainees, notably minorities.

Steyer has repeatedly expressed remorse about his former firm’s ties with the detention company. In 2012, he sold his stake in Farallon, which was named in reference to islands off the coast of San Francisco and was once one of the largest hedge funds in the world.

“I deeply regret that Farallon made that investment, and I personally ordered the investment in CCA to be sold because it did not accord with my values then or now,” Steyer told The Times in 2019 after he launched a short-lived presidential campaign.

Asked to comment about the latest iteration of the controversy, Steyer’s campaign pointed to comments he made in March at a town hall in San Francisco about how among the hundreds of thousands of companies his hedge fund invested in, the private prison company changed the course of his life.

“It was a mistake, and I sold it over 20 years ago, thinking, not that it won’t be profitable, it’s just a mistake. I don’t want to be in that business. But let me say this, it wasn’t just a mistake,” Steyer said. “It was also a big wake-up call that I was in the wrong place, that I was in a business that was taking me to places I absolutely didn’t want to go. And there’s a reason I walked away from that business and walked away from a ton of money, because I felt like that is not the life I want.”

He added that he and his wife, Kat Taylor, have spent the past two decades pushing for rehabilitative justice — treatment instead of mass incarceration except for violent felons.

“Am I a perfect person? No, have I made mistakes? Yes,” Steyer said. “But for those of you who like to read the Bible, there is a moment on the road to Damascus when someone makes a change, and I have made a big change, and I did it a long time ago, and I’ve been pushing very, very hard the other way.”

Farallon also invested in fossil fuel projects, including an Australian coal mine that denuded thousands of acres of koala habitat and generated an enormous amount of carbon emissions.

Steyer, who has a net worth of $2.4 billion according to Forbes, has painted himself as a reformed billionaire who walked away from Farallon because of angst about how he earned his fortune. He has spent hundreds of millions of dollars supporting Democratic causes, notably efforts to fight climate change.

“The truth is that is not where I think there is value, and that is not what I’m seeking in my life,” he said at a Sacramento town hall in March when retired state employee Gina Coates asked how, as a woman of color, she could believe his promises given his privilege as a wealthy white man.

“In terms of trusting me, let me say this, I left my business 14 years ago, and anybody who cared about money would not have done it,” Steyer said.

Steyer later said at the town hall that he left Farallon because he realized that he didn’t want to remain on that path.

“I want to have a meaningful life,” he said. “I want to stand with the people of this state and have actual prosperity. Twelve trillionaires and 40 million people who can’t make rent is not success.”

But Steyer and his wife continue to receive significant income from the hedge fund, including millions of dollars in investments, holdings and various complicated transactions in 2024, according to a statement of economic interest and tax returns he was required to file with the California Secretary of State’s office because of his gubernatorial run.

A Steyer campaign spokesman said Steyer created guardrails to ensure that he does not profit off companies he morally disagrees with.

“Tom has put in place an investment policy to ensure that he does not directly invest in fossil fuels, payday lending, or private prisons,” spokesman Anthony York said. “To the extent he inadvertently incurs exposure to those industries through third-party managers or liquid legacy investments, Tom will donate all profits to charity.”

After leaving Farallon, Steyer became one of the nation’s top Democratic donors. And he has used his wealth to fund his political ambitions. Steyer contributed nearly $342 million of his own money to his short-lived 2020 presidential campaign, according to the Federal Election Commission.

In the 2026 governor’s race, Steyer has donated nearly $112 million to his campaign as of Thursday, according to the California secretary of state’s office. He has been an ubiquitous presence on the airwaves, including local news programs and campaign ads that aired during the “Puppy Bowl” on the Animal Planet channel on Super Bowl Sunday. In the past month, Steyer has aired more than 5,000 ads, according to iSpot, which tracks television commercials.

California, home to 23.1 million registered voters, is home to some of the nation’s most expensive media markets. And candidates, particularly those who are not well known, need to spend heavily on television advertising if they hope to have a successful campaign.

But money is no guarantee of success. Billionaire Meg Whitman, the former eBay chief and formerly a longtime Republican donor, spent $144 million of her money on her 2010 gubernatorial bid. That set a record for a candidate’s contribution in a state race at the time, but Whitman lost to Jerry Brown by nearly 13 percentage points.

In 1998, Democratic multimillionaire Al Checchi who had been the co-chair of Northwest Airlines spent $40 million of his wealth on an unsuccessful run for governor, also a record at the time.

Steyer is one of the top three Democrats in the sprawling field to replace termed-out Gov. Gavin Newsom. And his liberal positions are drawing the ire of powerful forces in Sacramento. On Tuesday , the state’s Realtors donated $5 million to an independent expenditure committee opposing Steyer’s bid.

Taylor, who confronted Steyer at the San Diego town hall, said she had not planned to be so vocal. But as the event unfolded, she decided she had to speak, not only to Steyer but to the attendees. She and her compatriots gather every Sunday outside the Otay Mesa facility to raise money to help detainees buy food in the prison commissary and call their families.

“My main issue is that he has gotten financial gain off of these people suffering,” she said.

A proposed gubernatorial forum hastily cobbled together in the hours after USC canceled its Tuesday debate fell apart because the candidates of color who were excluded from the previously planned event were unable to show up in person at KNBC-TV’s studio in Universal City, according to multiple sources.

Facing mounting pressure that its debate selection criteria excluded every candidate of color, the university canceled its debate late Monday. On Tuesday morning, billionaire Tom Steyer — a Democrat — proposed holding an alternative face-off, with KNBC moderating. But the candidates who had not been invited to the USC debate had already made other commitments.

“A lot of this came out of nowhere — there’s a debate and you’re not invited, followed by there’s no debate, and then maybe we should all hang out and have a conversation,” said Kyle Layman, a strategist advising former U.S. Health and Human Services Secretary Xavier Becerra.

USC officials declined to comment on Tuesday’s developments — as did KABC-TV, one of the broadcast partners of the canceled debate. KNBC did not respond to a request for comment, but someone involved with planning a potential debate there said pulling together such an event in just a few hours was impossible, and also unfair to the candidates who had made other plans after initially being excluded from the USC debate.

“We looked into the possibility of doing something. It just wasn’t possible because of the last-minute logistics. It was not feasible,” said the person, who asked for anonymity to speak candidly. “We couldn’t get everybody here.”

The fact that the candidates excluded from the USC debate couldn’t find a way to participate in Tuesday evening’s alternative forum irritated some people involved in the planning, however. Becerra, state Supt. of Public Instruction Tony Thurmond, former Los Angeles Mayor Antonio Villaraigosa and former state Controller Betty Yee had loudly protested not being invited to the USC event.

“This is like probably one of the last opportunities they have to be with other leading contenders of the race, so why not take this opportunity?” said someone who took part in conversations about the proposed last-minute debate, who asked for anonymity to speak openly. “If the whole thing is about bringing your message to the voters, making sure voters have as much information as possible, talking about the issues that matter, wouldn’t you want to take every opportunity to do that?

“If you’re going to talk a big game about taking your message to voters, the importance of debates, why not do it?” this person said.

Becerra, Thurmond, Villaraigosa and Yee have reportedly formed an informal pact not to participate in any debate that does not include all of them, which Yee referenced in a Tuesday afternoon news conference.

“The idea that none of the candidates of color are going to be joining a debate is just inappropriate for a state like California,” Yee said. “We also need to have a commitment from all of the debate sponsors that they will include all of us going forward.”

Yee and Thurmond were not invited to the next major televised debate, which will take place April 1 at Fresno State University. Becerra and Villaraigosa had previously confirmed their attendance, according to a news release from the Western Growers Assn., one of the event’s sponsors.

And all four candidates of color, along with San José Mayor Matt Mahan, were not invited to a debate on April 22 in San Francisco that will be hosted by KRON-TV and broadcast on Nexstar Media Group stations throughout California.

“We don’t need gatekeepers,” Mahan said in a statement Tuesday evening. “I’m calling on my fellow candidates to work together to organize our own debates — so we can take our ideas for a better California to every corner of California. Let’s let the voters truly decide.”

The scrapped USC debate was going to be hosted by the institution’s Dornsife Center for the Political Future and co-sponsored by KABC and Univision. Six candidates had been invited to participate: Democrats Rep. Eric Swalwell (D-Dublin), former Orange County Rep. Katie Porter, Mahan and Steyer; along with the leading Republicans, conservative commentator Steve Hilton and Riverside County Sheriff Chad Bianco.

Candidates and elected officials called the criteria used to determine participation in the debate biased because it included Mahan, a white candidate who is polling near the bottom of the pack but is supported by notable names in the USC community. Hours after the debate was canceled, Steyer’s campaign sought to create an alternate event that would include all of the candidates.

“We were trying to do the right thing upon learning that the debate was canceled at USC,” said a member of Steyer’s campaign who asked for anonymity to speak candidly. “Tom immediately was like, ‘We can do something alternative.’ People want to hear from the gubernatorial candidates. It was on the table. It was offered.

“NBC couldn’t get all the candidates here, but we tried,” this person said. “Given the short amount of time we were trying to put this together, it ultimately could not happen because not all the candidates could get to the studio.”

Thurmond, who was in Sacramento and Richmond on Tuesday, joined a political influencer on YouTube Tuesday evening, while Yee attended previously scheduled events with the East Area Progressive Democrats and a women’s group in the L.A. area. Villaraigosa had lined up other interviews at his Wilshire campaign office, Becerra was traveling, and Porter was scheduled to host a livestream on her Instagram account Tuesday evening.