Palm Beach County – the largest county in the US state of Florida – is one of the largest investors in Israeli bonds, as Joseph Abruzzo, who oversees investments there, invests $700 million of tax money in Israeli debt instruments that support the continuation of the war on Gaza, according to what the British Financial Times reported. .
The boycott’s total investment portfolio amounts to $4.6 billion, and the Israeli bonds referred to are private foreign debt issues acquired by US state and local governments since the Al-Aqsa flood operation and the outbreak of the war on Gaza.
“I am happy to have these bonds in our investment portfolio,” the newspaper quoted Abruzzo as saying, noting “the great returns, security and benefit that accrues to the taxpayers of Palm Beach County” from the debt that has become an important but controversial part of Israel’s efforts to finance a longer-term war. .
Israel Bonds Corporation, the American guarantor of debt securities issued by Israel, says it has sold more than $3 billion in debt worldwide – three times the annual average – since the outbreak of the war on the Gaza Strip on October 7, 2023.
According to the British newspaper, local governments in the United States – including the states of Florida, Indiana and Ohio – have been enthusiastic buyers recently.
focal point
These bonds are sold directly to pro-Israel American investors, and have become an increasingly prominent part of the country’s external financing, a quarter of Israel’s foreign debt issuance, and help support a budget deficit that ballooned during the war to 7% of GDP in the year to April due to… Military spending.
But the bonds have also become a focal point for both Israel supporters and divestment activists, amid mounting tensions over US support for an ally whose conduct in the war has been harshly criticized.
Israel also sold conventional international bonds worth $8 billion last March, according to the Ministry of Finance, and received orders worth $38 billion in which “about 400 different investors from 36 countries participated.”
Meanwhile, Israel’s local currency loans amounted to NIS 12.25 billion ($3.3 billion) from bond sales scheduled for this May, but Israeli bonds expanded as a share of total debt issuance.
Abruzzo – who says he received “without exaggeration a standing ovation” at bond buying gatherings – stated that he was the first American investor to submit a request to buy Israeli bonds after the Al-Aqsa Flood operation.
Abruzzo has since broken the record for the most such bonds purchased in one day at about $135 million, and the board-imposed cap on his investments was recently raised to 15% of the portfolio.
This May, the US state of Ohio added $30 million in Israeli bonds to its holdings of more than $260 million, according to the newspaper.
The bonds – which are difficult to sell and designed to be held to maturity – were marketed for many years mostly to the global Jewish diaspora through Israel Bonds, a state-backed entity also known as the Israel Development Corporation.
The company has sold bonds worth more than $50 billion in debt since it was launched by David Ben-Gurion, Israel’s founding prime minister, in the 1950s.
Who buys Israeli bonds?
Israeli bonds are bought in the United States by those politically supportive of it, and the demand is for higher yields than US Treasury bonds, with risks they see as low.
Investments in Palm Beach, Miami-Dade, Broward and other Florida counties were made possible by the passage of a 2008 state law that added Israeli bonds to US Treasuries, debt backed by federal agencies, money market funds and other low-risk assets, and does not allow any other foreign government securities.
The newspaper quoted Justin Marlowe, director of the Center for Municipal Finance at the Harris School of Public Policy at the University of Chicago, as saying that while their weight in the Palm Beach portfolio is “unique,” Israeli bonds have also benefited from the steady shift between US states and counties to improve their investment returns.
Pro-divestment activists (from Israel) – including Jewish Voice for Peace, which has launched street protests against Israeli bonds – oppose any exposure to these debt instruments on the grounds that the money raised could be used to finance the war in Gaza.
The newspaper quoted Dani Noble, a campaign official at the Jewish Voice for Peace Organization, as saying, “It is terrifying that our countries, provinces, and other societal institutions invest directly without restrictions or conditions to ensure respect for human rights. Israeli bonds directly provide unrestricted and unaccountable financial support.” .
“The Loud Little Group”
In contrast, Israel Bonds said that “this small but vocal group of demonstrators cannot distract attention from the undeniable fact” of “unprecedented support” for Israeli debt since the beginning of the war, adding, “We look forward to building on this success in the coming months.” “And continue to make clear that boycott efforts are doomed to failure.”
Local activists recently announced they would file a lawsuit over Palm Beach’s bond holdings after protesting outside county offices.
“I think we’re going to see a lot more pressure on divestment,” Justin Marlow said. “I’ve been getting a lot of questions in recent weeks about how local government investment pools work, because there are a lot of people setting up lobbying campaigns.”
However, Abruzzo – a former Florida state senator – remains a strong supporter of Israel bonds, and the newspaper quoted him as saying that the protests over the bonds “will not have any impact on me or our office,” adding that he has no concerns about redeeming the bonds. .
He said, “The only way to harm us is the destruction of the nation of Israel, and this will not happen,” the newspaper quoted him as saying.
