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By Andy Sullivan and Valerie Volcovici
WASHINGTON, May 8 (Reuters) - As Boston Red Sox fans streamed into Fenway Park last April for an early-season baseball game, a small plane circled above, towing a banner that read "Steve Lynch for Oil Evil Empire."
Downtown, truck-mounted video screens looped attack ads against the Democratic congressman, who was running for a Senate seat.
The man footing the bill for this sharp-edged campaign, San Francisco billionaire Tom Steyer, called Lynch "Dr. Evil" in a local TV interview because he did not oppose the proposed Keystone XL oil pipeline from Canada to the United States, which environmentalists say would worsen climate change.
When Lynch, a former steel worker, lost the Democratic primary to environmentalist Ed Markey, politicians across the United States were served notice: a deep-pocketed activist was willing to punish them if they did not tackle climate change.
Steyer's take-no-prisoners stance on Keystone, an issue that divides Democrats, and his willingness to spend millions of dollars to aggressively push his agenda, has raised questions about whether he might undercut the party's chance to retain control of the Senate in the Nov. 4 congressional elections.
But Reuters interviews with Democratic campaign officials paint a picture of a man who has evolved from bomb thrower to team player over the past year, even as he has rapidly become one of the most visible players in U.S. politics, a rare liberal with the resources and willingness to counter conservative megadonors like Charles and David Koch.
Despite high-profile threats against Democratic lawmakers who don't agree with him, Steyer is poised to work closely with the party's political allies on the shared goal of keeping the Senate in Democratic hands this year, the officials said.
While he may not help Democratic candidates who have close ties with the fossil-fuel industry, he is not going to try to hurt them either, they said.
It is unclear what prompted Steyer's evolution or whether the change is merely cosmetic. Those who have worked with him in the past say that while his passion is undimmed, he has gotten more strategic in his thinking over the past year.
"He started like a bull in a china shop, and then he got some wise counsel as to how the game is played," said one Democratic campaign strategist, who, like many of those interviewed, declined to be named because they work with him.
Even if Steyer is now more of a team player, he is still a flame-thrower when it comes to those he sees as his enemies, in particular the Koch brothers. In an open letter to lawmakers in April, he accused the Kochs of seeking to seize "complete control of Congress" by spending tens of millions of dollars on attack ads against Democratic lawmakers.
Steyer has in recent days stepped up his attacks on the Kochs, calling on them to "come out of hiding" and take part in a public debate with him on climate change, a challenge the billionaire brothers have declined.
"His comments show that he has joined forces with the individuals and groups who have been attacking us for the past four years because they disagree with our exercise of our First Amendment rights of free speech," Koch Industries spokesman Rob Tappan said.
CLIMATE CHANGE A PRIORITY
Steyer has revealed little about his plans to make climate change a central theme of the mid-term elections. But his organization, NextGen Climate, has started to talk with outside Democratic groups like House Majority PAC that coordinate television ads, phone banks and other election efforts, Democratic strategists said.
NextGen said it was also coordinating with other environmental groups like the League of Conservation Voters and the National Resources Defense Council.
Even as NextGen has called out oil-and-gas friendly Democrats like Mary Landrieu on its website, Steyer has raised money for a Democratic Senate group that is working to re-elect the Louisiana senator. He has been in touch with Vermont Gov. Peter Shumlin, who as head of the Democratic Governors Association is working to elect Democrats at the state level regardless of their stance on the Keystone pipeline.
"He's been very helpful to us," said Shumlin, who first met Steyer at summer camp in upstate New York. "He understands that Democratic governors are going to move the ball much more quickly on the areas that he cares about."
NextGen says Steyer's strategy has been consistent all along: support candidates who will make fighting climate change a priority and go after those who don't. Steyer "believes 2014 is a pivotal year when it comes to climate politics and is prepared to provide significant support in races where climate is on the ballot," spokeswoman Suzanne Henkels said.
With an anticipated budget of roughly $100 million, NextGen is one of the few outside groups that would have the scale to counter the network of Koch-backed conservative groups like Americans for Prosperity that collectively spent more than $400 million in the 2012 elections.
"The Republican and polluting industry denial machinery is immense," said Rhode Island Senator Sheldon Whitehouse, who set up a fundraiser at Steyer's house in February that raised $400,000 for Senate Democrats. "Having somebody to stand up against that gives courage and confidence to a lot of us - it's not going to be a one-sided media barrage by the polluters."
As his national profile has grown, Republicans have portrayed Steyer as a Democratic puppetmaster who has been able to bend the White House and the Senate to his will, contrasting popular support for the Keystone pipeline with Democrats' increasing resistance to it.
They accuse him of hypocrisy, saying he profited from oil and coal investments at his hedge fund, Farallon Capital Management, before he became a full-time activist in 2012. Steyer said in 2013 he was selling off those holdings.
Republicans and other conservative critics have also suggested that President Barack Obama's decision last month to delay approval of Keystone was influenced by the environmental agenda of the Democrats' deep-pocketed donor. The White House says the decision has been put off for legal reasons.
NEXTGEN EYES RACES
NextGen is expected to campaign against Florida Gov. Rick Scott, a climate-change skeptic, and back Iowa Democratic Senate candidate Bruce Braley. It will identify other races in the coming weeks, a NextGen spokeswoman said.
NextGen's policy of steering clear of races where both candidates are friendly to the oil and coal industries suggests they are unlikely to back Democratic Senate candidates in Alaska, Louisiana, Arkansas and Kentucky.
NextGen staffers recently visited Colorado in a sign they might get involved in Democratic Senator Mark Udall's tough re-election campaign. Udall has not taken a position on the Keystone pipeline, but his Republican opponent has said he does not believe human activity is behind climate change.
It's another sign, perhaps, that Steyer may be thinking tactically in the months to come.
"I don't think his underlying feelings have changed. But I think he realizes certain things are just not possible," said an academic who has worked with Steyer on his environmental efforts.
'SHARP TIP OF THE SPEAR'
Steyer's use of brass-knuckle tactics came from a frustration with the genteel approach of other environmental groups, which in the past have emphasized issue advocacy over attack ads and other tools of traditional campaigns, say those who have worked with him over the past several years.
"You can push policy and talking points all you like, but unless folks feel the sharp tip of the spear at their jugular, they simply aren't going to be moved," said California state Senator Kevin de Leon, who has worked with Steyer on environmental issues in the state.
Steyer raised money for Democratic presidential candidates in 2004 and 2008 and bankrolled a 2010 effort to defeat a California ballot initiative that would have gutted the state's cap-and-trade law, as well as a 2012 ballot initiative that closed a billion-dollar tax break for out-of-state companies and directed the savings toward renewable energy projects.
During that second campaign, Steyer called top officials at companies that benefited from the loophole and gave them an ultimatum to either defend it to the public or stand down, De Leon recounted. The measure passed with little opposition.
Steyer can already point to several electoral victories. After the Lynch campaign, NextGen spent $8 million last fall to help Democrat Terry McAuliffe win the governor's race in Virginia.
Much of that effort was spent attacking Republican candidate Ken Cuccinelli, who as state attorney general launched an investigation against a University of Virginia climate-change researcher. But NextGen didn't just hit Cuccinelli on climate: the group ran ads criticizing his record on birth control, gun control and ethics. That campaign will serve as a blueprint for this fall's efforts, NextGen staffers said. (Additional reporting by Rory Carroll in San Francisco, editing by Ross Colvin)
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