Bob Casey Said Dave McCormick’s Hedge Fund Delivered ‘Benefits’ to Pennsylvania’s Retirees and Economy. Now He’s Attacking It.

Casey oversaw state pension funds’ business with Bridgewater Associates

Democratic senator Bob Casey has criticized Republican challenger Dave McCormick over his past role at the hedge fund Bridgewater Associates. But Casey spoke highly of the investment firm’s offerings when he served as a top Pennsylvania official overseeing the commonwealth’s pension funds, which brought on Bridgewater to great benefit “both to retirees and to our economy as a whole,” according to Casey.

As Pennsylvania auditor general and then as state treasurer, Casey oversaw Pennsylvania’s teacher and public employee pension funds when they struck a lucrative deal with Bridgewater to oversee hundreds of millions of dollars in assets, according to state records.

Casey has said he audited the pension funds, operated by the Public School Employees Retirement System and Public and Pennsylvania State Employees’ Retirement System, as auditor general, a post he held from 1997 to 2005. And he served as trustee for the funds as treasurer from 2005 to 2007. The pensions hired Bridgewater in 2004 and expanded Bridgewater’s portfolio in 2005, records show.

Casey had no apparent problem with Bridgewater or any other investment managers at the time. He praised the portfolios Bridgewater and other hedge funds brought to the table, saying in 2008 that his experience with the funds gave him “an insight into the benefits of well-run defined benefit plans, both to retirees and to our economy as a whole.” The partnership with Bridgewater has been lucrative for Pennsylvania’s retired state employees: A spokesman for the Public School Employees Retirement System, known as PSERS, said in 2022 it has reaped $4 billion in profits from the Bridgewater investments since 2004.

Casey has since soured on Bridgewater, attacking McCormick for his past work for the hedge fund. McCormick joined Bridgewater as president in 2009 and rose to co-CEO of the firm in 2017. Casey and his Democratic allies have criticized the hedge fund over its investments in China, particularly Chinese defense and pharmaceutical firms.

“As a Wall Street CEO, he ran the No. 1 foreign hedge fund in China, pouring money into companies that build missiles and bombers for China’s military,” a recent Casey ad states, referring to hundreds of thousands of dollars of Bridgewater investments in a subsidiary of the Aviation Industry Corporation of China.

But Casey, whose campaign did not respond to a request for comment, has his own ties to both questionable Chinese companies and Bridgewater investments he’s attacked.

When Casey served as treasurer, the pension funds invested $31 million in China Mobile, a Chinese telecom giant that the U.S. government now deems a national security threat, the New York Post reported.

Casey also criticized McCormick over Bridgewater’s investments in Humanwell, a Chinese drug company that produces fentanyl for use in doctor-prescribed painkillers. Casey has claimed without evidence that the company is fueling America’s fentanyl crisis, which has hit Pennsylvania especially hard. Casey, however, holds a stake of his own in Humanwell, Fox News reported. And Casey held investments in a Chinese state-owned oil company that the Pennsylvania’s treasury department blacklisted for selling sanctioned oil to Iran, the Washington Free Beacon reported.

The Pennsylvania State Public Employees Retirement System hired Bridgewater Associates as an investment manager in 2004, a spokesman for the agency has said. The spokesman said Bridgewater ultimately oversaw five separate funds for the pensions.

In 2005, the pension expanded Bridgewater’s role, listing the firm as one of its “global macro managers,” according to state records.