Why investments in a Chinese fentanyl company have become an issue in Pennsylvania’s Senate race

The epidemic of fentanyl overdoses, which killed about 4,000 Pennsylvanians last year, has become a major issue in the state’s closely watched U.S. Senate race, with both candidates accusing the other of playing a role in fueling the national opioid crisis.

Republican Dave McCormick has argued that U.S. Sen. Bob Casey (D., Pa.) and other Democrats in Washington are responsible for failing to stop the flow of drugs through the porous southern border.

Meanwhile, Casey’s campaign a week ago started airing ads accusing his GOP challenger, McCormick, of “profiting off people’s pain” when he was CEO of the Bridgewater Associates, a hedge fund that invested $1.7 million in the Chinese fentanyl manufacturer Yichang Humanwell during his tenure.

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Neither candidates’ arguments are straightforward. A vast majority of the fentanyl and other illegal drugs that enter the United States is smuggled through legal ports of entry, not carried by unauthorized immigrants, meaning many of the policies that McCormick has criticized Casey for opposing — such as building a wall on the southern border or cracking down on so-called sanctuary cities — would do little to address the opioid crisis.

Conversely, publicly available records show that Casey personally owns, through a mutual fund, a very small amount of stock in the same Chinese fentanyl producer he attacked McCormick for investing in while at Bridgewater. Casey’s investment is in a college savings fund, not an individual stock holding, that the senator doesn’t directly control. His stake in the company is vanishingly small, at no more than three cents as of June, according to calculations based on the fund’s financial reports.

It’s not difficult to see why both candidates are talking about the opioid crisis. Surveys show that the issue has become increasingly important to voters, and the topic allows both candidates to drive home narratives they are trying to build about each other as they vie for the Pennsylvania Senate seat: McCormick as a ruthless capitalist with ties to China, and Casey as weak on issues related to the United States-Mexico border.

“With his ad, Bob Casey has put his own hypocrisy and lies on display, and it’s proof of why Pennsylvanians are so tired of career politicians,” McCormick said in a statement Friday. “Casey has had 18 years to secure our border and prevent fentanyl from killing 100,000 Americans last year alone — under his weakness, this crisis has worsened beyond imagination.”

Casey owns between $15,000 and $50,000 of shares in the Massachusetts College Portfolio mutual fund, according to his Senate personal financial disclosure. That portfolio includes a small stake in an index fund that in turn has a small amount of shares — a fraction of 1% of its holdings ― in Humanwell, the same company McCormick’s firm invested in during his tenure as CEO.

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“David McCormick will say anything to try and cover up how he sold out Pennsylvanians for profit, but the facts are clear: He directly invested millions in Chinese fentanyl and profited off Pennsylvanians’ pain,” Casey spokesperson Maddy McDaniel in a statement. “David McCormick decided to invest in a Chinese fentanyl company and Bob Casey never did.”

Casey, a three-term incumbent, has maintained a lead over McCormick in polls throughout the race. In a New York Times/Siena College survey of registered voters released Saturday, 50% said they planned to vote for Casey, and 36% for McCormick.

McCormick is making his second run for office and is far less familiar to voters than Casey, whose father was governor.

McCormick narrowly lost the GOP primary in 2022 to Mehmet Oz, who secured former President Donald Trump’s endorsement but fell short to U.S. Sen. John Fetterman (D., Pa.) in November of that year. This time around, McCormick has Trump’s backing.

McCormick was CEO of Bridgewater from 2017 to 2022. In 2021, the firm invested $1.7 million in the Chinese company Yichang Humanwell, also known as Renfu Yiyao, the country’s leading producer of fentanyl.

Bridgewater, which is based in Connecticut and is the largest hedge fund in the world, has $124 billion in assets under management, according to Forbes.

Casey has leaned in hard on attacking McCormick over his firm’s investment in Humanwell, pointing in part to the company’s ties to the Chinese Communist Party.

The longtime incumbent has also emphasized his record on addressing the opioid crisis, such as supporting the FEND Off Fentanyl Act authored by Sen. Tim Scott (R., S.C.) that targets the international drug trade. In January, Casey introduced the Stop Fentanyl at the Border Act, which would add resources for U.S. Customs and Border Protection. The bill is in committee.

“So much of the fentanyl devastating Pennsylvania families and communities is being smuggled across our southern border,” Casey said when he unveiled the proposal. “This bill will help stop the flow of fentanyl into the U.S. and provide the hardworking law enforcement officers at the border with the resources, technology, and support they need to do their jobs.”

McCormick has called the flow of synthetic opiates into the United States “a national security threat,” and has been more critical of China on the campaign trail this year after being attacked for Bridgewater’s ties to the country during his failed 2022 Senate bid.

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It’s impossible to say exactly what role Humanwell has played in the United States’ opioid crisis. Although most fentanyl that enters the United States originates in China, it often first arrives in Mexico in the form of so-called precursors, chemicals that are then combined with heroin and turned into a deadly drug cocktail. It is then smuggled across the border, usually under the noses of customs agents through designated border crossings.

Humanwell is a manufacturer of legal fentanyl primarily intended for medical use in China, and the company says it does not export to the United States. But given the illicit nature of the trade, it’s difficult to assess whether the company or its products play a role in the international market.

McCormick responded to Casey’s ads attacking with him with an ad of his own that appears to hinge on that ambiguity by denying that he ever invested in an illegal fentanyl maker.

“Bob Casey is lying about me, and I won’t tolerate it,” McCormick says in the ad. “I never made any investments in the makers of illegal fentanyl. Ever. The fentanyl crisis is because weak politicians like Bob Casey left our border open.”