McCormick’s Hedge Fund Background: A Double-Edged Sword in PA Senate Race

HARRISBURG, Pa. — David McCormick has established a formidable presence on Wall Street before transitioning into a U.S. Senate candidate. Having served as the CEO of the largest hedge fund globally, McCormick was known for his influential role, garnering interest for speaking engagements and board positions. His wealth and extensive connections positioned him as an appealing candidate for the Republican Party, seen as someone who could attract campaign contributions as well as self-fund his campaign.

However, McCormick’s tenure in the financial sector has recently come under fire, especially during his previous Senate campaign in 2022 and now against incumbent Senator Bob Casey. Opponents have exploited his Wall Street background, particularly focusing on investments made by Bridgewater Associates during his leadership. Casey has frequently highlighted McCormick’s investments in Chinese companies linked to military and surveillance entities, arguing that while he fought for worker rights, McCormick profited from investments in China.

“He not only invested in Chinese companies, he invested in companies that built the Chinese military,” Casey stated to a union audience in Harrisburg, reinforcing his narrative that McCormick’s financial interests conflict with his political rhetoric.

As tensions have escalated between China and the United States, McCormick feels the heat of these accusations. Despite facing scrutiny, he points out that Bridgewater’s investments in China were relatively modest, equating to just 2% of the firm’s assets, and claims that investment in China is seen as an essential part of catering to client needs amid economic growth.

His campaign reflects a stark contrast to this past. While at Bridgewater in 2019, McCormick characterized the U.S.-China relationship as the defining issue of our time. Yet now, he emphasizes a transformed view, labeling China as an existential threat, and advocates for the development of a comprehensive strategy that would enable the U.S. to outpace China in technological and economic matters.

Despite invoking his financial expertise with China, he primarily discusses his experiences outside of Wall Street during his campaign. McCormick shares his background in sports and military service, including his education at the U.S. Military Academy at West Point, where he served with distinction during the Gulf War, earning a Bronze Star.

His time at Bridgewater is less frequently discussed, as he tends to downplay his role at the hedge fund by simply referring to it as a “financial firm” or an “investment firm.” He is nevertheless associated with extensive financial backing from Wall Street, having received significant support in both of his Senate campaigns from political action committees aligned with finance professionals.

Before leading Bridgewater, McCormick had a noteworthy career, including a Ph.D. from Princeton and notable roles in the Bush administration, positioning him as a skilled negotiator with China over sensitive technological export controls.

Under his leadership, Bridgewater became recognized as a formidable investor in China, particularly during times when China was opening up to foreign investments. The company reportedly manages investments exceeding $1.4 billion in Chinese assets, making it one of the largest foreign entities investing in China, thus complicating McCormick’s narrative as he campaigns against the perceived influence of China.

In previous Republican primaries, McCormick’s connections to China have been a sore spot. Attack ads have resonated with voters, with opponents claiming he is too closely linked to a country perceived as an adversary. Former President Donald Trump pointedly criticized him for managing wealth that benefitted “communist China,” contributing to McCormick’s narrow defeat in the 2022 primary.

As this election cycle unfolds, McCormick finds himself again targeted by Casey’s campaign ads that highlight his financial past, stating, “Dave McCormick sold us out to make a fortune.”

McCormick has attempted to turn the tables by suggesting that Casey, too, has had connections to China through investments in mutual funds and underlining policies that he believes increase American reliance on Chinese technologies.

Both candidates are competing to portray themselves as the more formidable opponent to China, drawing sharp contrasts between McCormick’s past as a hedge fund executive and his current political stance. He has committed to ending U.S. investments in technologies critical to national security affiliated with China’s military, while critics suggest his current political façade differs from his business persona.

“McCormick has changed his tune because he’s a political type,” remarked Derek Scissors of the American Enterprise Institute, pointing out that McCormick’s previous business interests would have continued to advocate for collaboration with China instead of confrontation.

Source: AP