Republican David McCormick has frequently touted his decades of business experience on the campaign trail, saying in one recent ad that Pennsylvanians need a Senator who is “a Pittsburgh job creator that can go and fight for the Commonwealth of Pennsylvania.”
Although perhaps best known as the former head of Bridgewater Associates, one of the world’s largest hedge funds, McCormick previously led FreeMarkets, a Pittsburgh-based software company. And McCormick says that during his time in leadership at FreeMarkets from 1999-2004, he brought jobs to Pennsylvania.
But voters – and even a top McCormick ally – may have a false impression about the number of local jobs the company created on his watch.
On a recent campaign stop in Wilkes-Barre, “McCormick said he created 1,000 jobs in Pittsburgh with a start-up company he took public,” reported a story by the Wilkes-Barre Times Leader. It’s not a new claim: Texas Republican U.S. Sen. Ted Cruz, who recently endorsed McCormick, credited him on Fox News for having “created over 1,000 jobs in Pennsylvania.”
And on his campaign website, under a section titled “Creating Jobs in Pittsburgh”, McCormick says FreeMarkets “created over 1,000 jobs” – a statement that might well give the impression that the jobs were in fact created in Pittsburgh.
But according to documents the company filed with the U.S. Security and Exchange Commission, FreeMarkets’ entire North America workforce was just 702 employees in 2003, the year before it merged with Ariba. (FreeMarkets also employed people in Europe, Asia, Australia and South America.)
When asked about the discrepancy, a spokesperson for McCormick’s campaign said FreeMarkets “as a whole created over 1000 jobs as the website says” and that “in Pittsburgh, FreeMarkets created 600 jobs when Dave was there.”
In the hours after this story was published, the campaign corrected McCormick's website to say that 1,000 jobs were not created in Pittsburgh.
According to stock filings, McCormick held several different roles in leadership at FreeMarkets beginning in 1999, until the Ariba merger. SEC filings show that the company did grow by nearly 600 employees while McCormick worked there, though the records don’t specify where those employees were based.
During McCormick’s tenure at FreeMarkets, the company struggled to meet its own expectations for job creation within the state.
In 2001, McCormick was featured in Gov. Tom Ridge’s budget address. In an exchange that took place during the speech, McCormick told Ridge that FreeMarkets had created 500 jobs in Southwestern Pennsylvania, and pledged to expand further.
“FreeMarkets has made a commitment to create 1,000 jobs for Western Pennsylvania over the next three years,” he said.
That same year, FreeMarkets received a $500,000 grant from the Pennsylvania Department of Community and Economic Development, according to Chad Newton, the department’s deputy communications manager. A spokesperson for FreeMarkets told the Pittsburgh Business Times that the company had received the grant to create 1,000 jobs.
But company filings show that pledge was never realized, and according to the department, in 2007 the company returned half of the grant.
The department does not have specifics on why the funds were returned, but Newton wrote in an email that clawbacks like this generally “occur when a company does not meet their commitment to create or retain a specific amount of jobs or invest a promised amount.”
It’s hard to confirm how many jobs FreeMarkets created with the grant money, but SEC filings show the company’s employment numbers actually dropped slightly between the time it received the funding and the Ariba merger. In 2001, the company had 1,000 employees: By 2003, there were 967 employees worldwide.
McCormick’s campaign did not respond to questions about the grant funding and why those jobs weren’t created.
McCormick is one of several Republicans who hopes to replace retiring U.S. Sen. Pat Toomey in Pennsylvania’s open U.S. Senate race this year.
