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US State Treasuries Are Investing Hundreds of Millions in Israel Via Bonds

US states, municipalities and public pension funds own at least $1.6 billion worth of Israel bonds combined.

Protesters gather outside the office of Pennsylvania Treasurer Stacy Garrity during the 'Divest From Genocide' rally in Harrisburg, Pennsylvania, on February 5, 2024.

As Israel continues its relentless bombing of Palestinians, raising the death toll in Gaza to over 27,000 people, state and local treasuries across the United States are investing hundreds of millions in the state of Israel by purchasing Israeli bonds. Israel Bonds, also known as the Development Corporation for Israel, raised a record-setting $2 billion in bond sales in 2023, with $1 billion raised since October 7th, as Israel bombed hospitals, destroyed essential infrastructure for water, medicine, fuel, and electricity, and used starvation of civilians as a weapon of war.

Activists and some elected officials in the U.S. have been calling for an end to monetary aid to the Israeli government and purchases from the weapons manufacturers enabling Israel’s assault on Gaza, but few have directed their attention to the U.S. investments being made in Israel through the purchase of Israel bonds.

This post explains how Israel Bonds work, highlights the institutional investors who have recently bought Israel bonds, and shares some history of the human rights activists who have been calling on institutions to divest from Israel bonds.

Israel Bonds Are a Type of Loan to the Israeli Government

Issuing bonds is a common way that countries, banks, and corporations raise money for themselves. Bonds are a type of loan that functions like an IOU. When an investor purchases a bond, they are lending money to a borrower that is eventually paid back in full when the bond reaches “maturity.” Bondholders receive interest payments over the course of the life of the bond. When an investor purchases bonds from Israel Bonds, they are loaning money to the Israeli government to use at its discretion.

In 1951, Israeli Prime Minister David Ben-Gurion launched Israel Bonds at Madison Square Garden with the goal of engaging Diaspora Jews to fund the State of Israel. Today, Israel Bond purchasers are encouraged to see their investment not just as a way to diversify their investment portfolio but also as a declaration of their commitment to Israel and Zionism. Israel Bonds also encourages investors to see Israel Bonds purchases as a “rejection of BDS advocates claims, proposals and objectives,” referring to the Boycott, Divestment, Sanctions (BDS) movement, launched in 2005 by Palestinian civil society groups which aims to “end international support for Israel’s oppression of Palestinians and pressure Israel to comply with international law.”

Israel Bonds, a U.S.-registered entity that operates like a brokerage firm connected to Israel’s finance ministry, serves as the U.S. underwriter for debt issued by the State of Israel, and has been selling bonds in the U.S. since 1951. In July 2023, CEO Dani Nahveh stated that Israel Bonds had achieved $49 billion in worldwide sales since they began selling bonds. U.S. investors in Israel Bonds include state and municipal pension funds, treasury funds, corporations, insurance companies, associations, unions, banks, financial institutions, universities, foundations, individuals, and synagogues. According to SEC filings submitted by the State of Israel, published on Israel Bonds’ website, as of December 31st 2022, Israel Bonds had $5.4 billion dollars in outstanding bonds and notes amounting to 12% of Israel’s external debt.

U.S. States, Municipalities, and Public Pension Funds Have Invested at Least $564 Million in Israel Bonds Since October 7th

Since October 7th, at least fourteen state governments, four municipal governments, and one public pension fund have invested or committed to investing in Israel bonds. Combined, these investors have recently purchased $564 million in bonds. They currently own at least $1.6 billion worth of bonds combined.

Florida has invested the most in Israel bonds. Since October 7th, Florida Chief Financial Officer Jimmy Patronis has invested $145 million in Israel bonds. Palm Beach County, Florida and Miami-Dade County, Florida have also invested an additional $135 million and $25 million in bonds, respectively.

The table below shows the recent Israel bond investors we were able to identify.

Investor (institution)Lead investor (person)Israel bond investment since Oct 7, 2023Total Israel bond holdingsSource Date
Alabama Treasurer’s OfficeGovernor Kay Ivey and State Treasurer Young Boozer$6 million$10 million10/20/2023
The New York State Common Retirement FundNew York State Comptroller Thomas P. DiNapoli$20 million$267.8 million10/13/2023
Illinois’ Treasurer’s OfficeIllinois State Treasurer Michael Frerichs$10 millionOver $100 million10/12/2023
Pennsylvania Treasury DepartmentPennsylvania Treasurer Stacy Garrity$20 million$56 million10/12/2023
Texas State TreasuryTexas Comptroller Glenn Hegar$65 million$140 million11/2/2023
Ohio TreasuryOhio Treasurer Robert Sprague$20 million$187.5 million10/11/2023
Arizona TreasuryArizona Treasurer Kimberly Yee$5 million$20 million11/17/2023
Georgia TreasuryGovernor Brian Kemp/State Treasurer Steve McCoy$10 million$25 million10/13/2023
Florida TreasuryFlorida Chief Financial Officer (CFO) Jimmy Patronis$145 million$200 million10/31/2023
Indiana TreasuryState Treasurer Daniel Elliott$35 million$100 million11/1/2023
Arkansas TreasuryState Treasurer Larry Walther$10 million$57 million10/28/2023
Louisiana TreasuryLouisiana Treasurer John Schroder$5 million$30 million10/12/2023
Oklahoma State Treasurer’s OfficeState Treasurer Todd Russ$15 million$62.5 million11/2/2023
Mississippi TreasuryState Treasurer David McRaeAt least $20 million10/13/2023
South Carolina State Treasurer’s OfficeState Treasurer Curtis Loftis$30 million11/7/2023
Miami-Dade CountyMayor Daniella Levine Cava$25 million$76 million10/17/2023
Palm Beach CountyPalm Beach County Comptroller Joseph Abruzzo$135 million$200 million10/31/2023
Broward County, Florida$5 million10/13/2023
Franklin County, Ohio Treasury OfficeFranklin County Treasurer Cheryl Brooks Sullivan$8 million$33 million12/19/2023
KeyBank$15 million$30 million11/13/2023
TX Lt. Governor Dan Patrick$3 million10/23/2023
Methodology note: We compiled information on institutional investors that bought Israel bonds after October 7th, based on press releases and news articles that are linked in the table above. It is likely that many more institutional investors than those that are listed here (including state treasuries, pension funds, unions, and universities) currently own Israel bonds. Sources for these investments can be found here.
Diagram showing various state and county treasuries contributing to Development Corporation for Israel / Israel Bonds

State Treasuries have been investing in Israel bonds for decades. In fact, according to human rights organization Democracy for the Arab World Now, in 2004 Israel Bonds successfully lobbied Indiana, Louisiana, New Jersey, and New Mexico to change laws to allow investments in bonds issued by foreign governments. Investors have made it clear that their investments in Israel bonds are not just a financial decision, but also a symbol of their state’s commitments to stand with Israel and its economy. For example, Mississippi State treasurer David McRae wrote about his decision to purchase additional Israel Bonds on his state’s treasury website, claiming that as Christians in the Middle East are under threat it “makes it more important than ever to protect The Holy Land, the shared birthplace of the Jewish and Christian faiths. One small way we are helping is by investing in Israel bonds.” Palm Beach County Comptroller Joseph Abruzzo, who announced the county’s new $135 million investment in October, stated that the investment was as much about showing support for “our strongest ally, the state of Israel,” as it was a financial decision.

State Treasurers Investing in Israel Bonds Have Ties to the Right-wing State Financial Officers Foundation

As was first reported in The Guardian, a majority of the State Treasurers who have recently invested in Israel bonds are members of the State Financial Officers Foundation (SFOF), a conservative organization with ties to the American Legislative Exchange Council (ALEC) and the Heritage Foundation. Republican financial officials from Pennsylvania, Texas, Alabama, Mississippi, Ohio, Arizona, Indiana, South Carolina, Florida, Georgia, Louisiana, and Oklahoma are all members of the State Financial Officers Foundation.

The SFOF has aggressively campaigned against environmental, social, governance (ESG) investment strategies at the state level. According to The New York Times, the SFOF has been “working to thwart climate action on state and federal levels, fighting regulations that would make clear the economic risks posed by a warming world, lobbying against climate-minded nominees to key federal posts and using the tax dollars they control to punish companies that want to reduce greenhouse gas emissions.” SFOF member and Florida State Treasurer Jimmy Patronis, who, according to The Guardian, has invested $145 million in Israel bonds in recent weeks “has regularly attacked ‘woke’ investments, accusing Farmers Insurance of ‘virtue signaling’ and claiming that Wall Street ‘wants to cozy up to the CCP [Chinese Communist Party] and [trans influencer] Dylan Mulvaney!”

The SFOF also has a history of opposing BDS (boycott, divestment, sanction) and has modeled anti-ESG legislation after anti-BDS laws, which bar state contractors from refusing to do business in Israel. Anti-BDS laws currently exist in 36 states and were first passed in 2015.

New York State Comptroller Thomas DiNapoli and Illinois State Treasurer Michael Frerichs are the only two Democrats that have announced investments in Israel bonds.

State Treasurers Are Joining Israel Bond’s Government Industry and Financial Services Leadership Group

Beyond committing millions from their own state coffers, some State Treasurers have also joined Israel Bonds’ new Government, Industry, and Financial Services Leadership Group to advise and encourage others to follow suit. The new group, established in December of 2023, aims to secure more government and corporate investment in Israel. Inaugural members of the group include Ohio State Treasurer Robert Sprague, Illinois State Treasurer Michael Frerichs, Pennsylvania State Treasurer Stacy Garrity, Oklahoma State Treasurer Todd Russ, and Palm Beach County Clerk and Comptroller Joseph Abruzzo. The group’s formation demonstrates another strategy for countering BDS. In the face of widespread public demands for divestment, Israel Bonds is not only securing enormous financial investments for the state of Israel but also deputizing public officials to help secure even more.

Notably, the establishment of this leadership group marks a new opportunity for many of these state and local officials to influence foreign affairs, an area of concern that is otherwise rarely relevant to their job roles.

Human Rights Advocates and Labor Movement Activists Have Called for Investigation Into and Divestment From Israel Bonds

Human rights and labor activists have criticized the Development Corporation for Israel and Israel bond investors for their role in financing Israel’s illegal settlements and apartheid policies.

In a recent Jacobin article, labor historian Jeff Schuhrke describes how, in 1970s Detroit, Arab autoworkers pressured their union to divest from Israel bonds. Schuhrke writes:

In the immediate aftermath [of the Six-Day War in 1967, during which Israel seized the West Bank and Gaza Strip (territories meant to comprise a future Palestinian state, per international law)]… young black and Arab autoworkers in Metro Detroit started voicing their support for the growing Palestinian liberation movement.

When Egypt and Syria launched the October War of 1973 to try to regain the territory they’d lost six years earlier, Detroit’s large community of Arab autoworkers was shocked to discover that their union, the UAW, held $785,000 in Israeli bonds. On October 13, around three thousand Arab protesters marched in Dearborn to the UAW Local 600 office, demanding the bonds be liquidated…In an advertisement published in the Detroit Free Press, the local American Arab Coordinating Committee questioned whether the UAW leadership was acting in members’ best interests by spending “over ¾ million dollars” on “non-economical, low-interest, foreign bonds.” The ad further noted that the UAW had an estimated fifteen thousand Arab members. “Purchase of Israeli bonds is regarded by these workers similarly as would a UAW investment in racist South Africa would be regarded by black workers,” it said…Although the convention’s resolutions committee ignored these proposals, by organizing among the rank-and-file over several months, the Arab Workers Caucus convinced multiple UAW locals to dispose of their own Israeli investments, resulting in the liquidation of $48,000 in bonds by 1975

The Minnesota Break the Bonds Campaign (MN BBC) has been calling on the Minnesota State Board of Investment to divest pension fund holdings in Israel bonds since 2006. In 2011, the coalition filed a lawsuit against the State Board of Investment, demanding that the state pull its investments in Israel and end its “financial complicity” in Israel’s human rights violations against Palestinians. Activists in Minnesota continue to put pressure on the State Board of Investments, with recent actions on the State Board in late 2023.

In July 2023, the human rights non-profit Democracy for the Arab World Now (DAWN) filed a letter with the Department of Justice asking the department to investigate Israel Bonds’ activities as a non-registered foreign agent. According to DAWN, Israel Bonds’ activities should require them to register as a foreign agent, as money raised through bond sales go into Israel’s general budget, which are used for illegal settlement activities in Occupied Palestine. DAWN cited a recent Jerusalem Post op-ed and former U.S. Senator James Abourezk’s 2015 testimony to the Minnesota Board of Investment, in which he noted that, “American money plunged into Israel Bond sales is fungible, meaning that the money is lumped into Israel’s General Fund, and then used for anything Israel wants, without restriction. That also means that the money sent to Israel is used for settlements [which were illegal under international law and also considered illegal by the U.S. government].”

Israel Bonds also faced criticism and backlash from Jewish-American groups in March 2023 when they invited Israel’s Finance Minister Bezalel Smotrich to their conference event in Washington, DC. Jewish-American groups demanded that Smotrich, who is the leader of Israel’s right-wing Religious Zionism party, be disinvited because of his extremist views. He has referred to himself as “a fascist homophobe” and also advocated extermination of Palestinian villages. Israel Bonds did not revoke the invitation even as groups like AIPAC and the American Jewish Committee chose not to meet with him because of his extremist views.

In the face of Israel’s assault on Gaza, activists, students, elected officials, and human rights organizations across the world are calling for an end to the United States’ complicity with the Israeli government. Organizers have rightfully called on the U.S. to stop funding the Israeli military and for divestment from big weapons producers and other corporations enabling and and profiting from this war. While lesser well known, Israel bonds are another important way that the United States provides financing to Israel, and could be included in these calls.

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