UPDATE: New York City’s pension funds are considering a controversial move to reinvest in Israeli government bonds, a decision that could direct public money to Israel’s treasury even amid the humanitarian crisis in Gaza. This potential reinvestment comes despite recent calls from Mayor Mamdani for divestment over Israel’s actions in Gaza, raising tensions within City Hall.
The Financial Times reported on October 7, 2023, that financial officials are weighing the benefits of investing in Israeli bonds, which have historically yielded strong returns. Mark Levine, New York City’s chief financial officer, stated, “The Israel bonds have performed very well and they continue to be investment grade rated.” Levine emphasized his duty to make decisions based on performance, not political factors.
Critics, however, argue that financing Israel’s government indirectly supports its controversial policies, including the expansion of illegal settlements and military actions in Gaza. This investment would directly conflict with Mamdani’s stance, who revoked an executive order from his predecessor, Eric Adams, aimed at preventing city agencies from boycotting Israel.
“New York should not have a fund that is invested in the violation of international law,” Mamdani stated earlier this year.
Despite warnings from credit agencies, including Moody’s, that Israeli bonds are becoming increasingly risky, Levine has reignited the debate over whether New York’s pension funds should invest in a state facing accusations of severe human rights violations. Historically, New York invested millions in Israeli bonds, but this practice shifted in 2023 when the city opted to allow its existing holdings to mature without reinvesting.
When Levine’s predecessor, Brad Lander, took office, the pension funds held $39 million in Israeli bonds, which generated returns of approximately five percent. Lander’s decision to cease new investments was part of a broader strategy to treat Israel like any other nation, avoiding preferential treatment.
This new consideration for reinvestment comes at a time of heightened scrutiny over Israel’s actions in Gaza, where civilian casualties have surged. The potential for public funds to support these actions has ignited passionate debates about the ethical implications of such investments. The City Council is expected to discuss this matter imminently, as both proponents and opponents of reinvestment prepare to voice their positions.
As this story develops, the implications for New York City’s pension funds and their ethical responsibilities remain at the forefront of public discourse. The upcoming discussions in City Hall could determine the future of these investments and set a significant precedent for how financial decisions are made in relation to international human rights.
Stay tuned for more updates on this developing situation.
