New York pension fund may invest in Israel despite Gaza genocide, defying Mamdani

New York City’s pension funds could resume investing in Israeli government bonds, a move that would funnel public money directly into Israel’s treasury despite the ongoing genocide in Gaza and its apartheid system in the occupied West Bank.

The Financial Times reported on Saturday that the city is weighing whether to reinvest, even as Mayor Zohran Mamdani has publicly backed divestment from Israel over its conduct in Gaza.

“The Israel bonds have performed very well and they continue to be investment grade rated,” Mark Levine, New York City’s chief financial officer, told the FT. “My fiduciary responsibility is to make investment decisions based on that record of performance.”

Israeli government bonds function as direct loans to the state, providing steady interest payments to investors while channelling cash straight into government coffers.

Critics argue that such financing underwrites Israel’s system of apartheid, the expansion of illegal settlements, the forced displacement of Palestinians and the killing of civilians in Gaza and the occupied West Bank.

Any move to reinvest would sharpen tensions inside City Hall. One of Mamdani’s first acts after taking office on 1 January was to revoke an executive order issued by his predecessor, Eric Adams, that had barred city agencies from boycotting or divesting from Israel.

A long-time critic of Israel’s war on Palestinians, Mamdani said before taking office that New York “should not have a fund that is invested in the violation of international law”.

Levine, who is Jewish, has acknowledged personal ties to Israel but claimed that pension decisions should remain insulated from politics. “I’ve also been open about the fact that I have very deep personal ties to Israel through family and friends and language, and more,” he has said previously, while arguing that investment choices must rest on financial criteria.

Despite warnings from credit rating agencies, including Moody’s, that Israeli bonds are becoming an “increasingly risky investment”, Levine has reopened the push to buy them, reviving a debate over whether New York’s pension funds should bankroll a state accused of grave crimes under international law.

The debate follows a sharp break with past practice. For decades, New York routinely invested millions of dollars of pension money in Israeli debt, even as human rights groups condemned the policy. That changed in 2023, when the city allowed its Israel bond holdings to mature without reinvesting.

At the time, the then chief financial officer, Brad Lander, declined to buy new bonds, ending a half-century tradition of preferential treatment for Israel. When he took office in 2022, the pension funds held $39m in Israeli bonds, generating returns of around five percent.

Lander said the decision aligned with a broader policy of avoiding foreign sovereign debt, treating Israel like any other state rather than granting it political exemptions.