The Ohio Treasurer’s office bought a record $61 million in Israel bonds April 3, which Ohio Treasurer Josh Mandel said is in response to the boycott, divestment and sanctions movement. The purchase is the largest single government purchase of Israel bonds in history and Ohio has the largest holding of Israel bonds by a single entity at $165 million.
“First and foremost, we are making this investment because it’s a good investment for the taxpayers of Ohio,” Mandel, a Beachwood resident, told the Cleveland Jewish News. “Second, we are making this investment in an effort to combat the bigotry of the BDS movement. Third, we are making this investment to stand with the only country in the Middle East that shares American values.”
The purchase was made possible by enacting Ohio House Bill 476, which passed in December 2016 and allowed the treasury to increase debt interests in foreign countries from 1 percent to 2 percent of the state’s portfolio, according to the treasurer’s office. Since Mandel took office in 2011, he has purchased more than $219 million in Israel bonds.
Every Ohio treasurer since 1993 has invested in Israel bonds, as have more than 80 state and municipal public employee pension and treasury funds, according to the treasurer’s office. Since 1993, the Ohio Treasury has bought $351 million in Israel bonds. The bonds are an attractive investment because they maintain a high credit rating, are dependable and yield a competitive interest rate, Mandel said.
Thomas Lockshin, executive director of Israel Bonds for Ohio and Kentucky, said that the investment is good for Ohio, regardless of any political motivation.
“Israel bonds has strong rates and a 65-year record of dependability since inception in 1951,” Lockshin said, adding that Israel has “never defaulted or missed a payment.”
Ike Yedid, chairman of Israel Bonds for Greater Cleveland, said that Ohio’s investment was wise and one for which he was grateful.
“We see that the safety of these investments is underlined by the fact that the state of Israel has paid every dollar of bond income and principal on time and in full,” Yedid said. “This record speaks for itself and we hope to see continued success in Ohio, the U.S.A. and other nations abroad.”
Mandel announced in December 2016 that he will run for the U.S. Senate seat held by Sen. Sherrod Brown, D-Cleveland, in 2018.
On April 3, Mandel also sent a letter addressed to Nihad Awad, executive director and co-founder of the Council on American Islamic Relations in Washington, D.C., which said CAIR allegedly supported BDS and the Israel bonds investment was to combat such divestment initiatives.
CAIR has opposed anti-BDS legislation in Ohio, in the form of House Bill 476, and in other states, saying on its website that such laws violate free speech rights of businesses and institutions that support BDS.
CAIR chapters in Cleveland and Columbus did not return telephone calls for comment.
Michael Siegal of Gates Mills, a member of the national board of directors of Israel Bonds, said it’s important to view the issues of fighting BDS and investing in Israel separately to some degree, although both are relevant.
“They are both important and probably, collectively, it’s very important, but each one kind of stands on its own,” Siegal said. “The investment itself has to be a responsible investment, which it is, and standing up to organizations that, you know, are supporting the destruction of the established state of a Jewish nation, I think that’s also critically important.”
The April 3 purchase will surpass Mandel’s previous record of $50 million invested in Israel bonds in April 2016. The treasurer’s office also bought $47.8 million in Israel bonds in 2014 and $42 million in 2013.
Siegal also noted the state’s record on investing in Israel bonds – which has grown since Mandel took office.
“The state of Ohio has always been well connected and well supportive of the relationship with the state of Israel,” Siegal said. “Obviously, since Josh Mandel has become treasurer of the state, they have every year continued to advance the investment in the state and to the extent that Josh can continue under the offices of the state, I think it’s fantastic.”
Jay Schottenstein, general chairman of Central Ohio State of Israel Bonds, said the purchase reinforces Ohio’s relationship with Israel.
“Israel bonds represent a sound and dependable investment for the state’s portfolio and (Mandel’s) new purchase reinforces the strong relationship between Ohio and Israel, a sister democracy with shared ideals and values,”Schottenstein said in an email.
Israel bonds, officially known as Development Corp. for Israel, was established in 1951 to underwrite securities issued by Israel’s Ministry of Finance. It ranks among Israel’s most valued economic and strategic resources, according to israelbonds.com.
JTA reported in February that a record $1.1 billion in bonds was purchased in 2016 in the U.S. and worldwide Israel Bonds has sold more than $40 billion since the corporation began.