Dear Union Leaders on the Comptroller’s Advisory Council for the Retirement System:

We, the undersigned, are writing to you as public sector union members and retirees regarding the New York State Common Retirement Fund (NYSCRF) investments in Israel Bonds. We are asking you, as a member of the Advisory Council for the Retirement System, to call on Comptroller Tom DiNapoli to stop investing the public pension fund in Israel Bonds. These investments do not prioritize pension security and performance; are fundamentally untransparent to pension members; and are immoral, providing unrestricted financial support to the Israeli military and government while they escalate a regional war.

The NYSCRF holds $367.5 million in bonds issued by the Israeli government, making New York State one of the biggest direct lenders to the State of Israel in the United States. In fact, the funds in Israel Bonds represent approximately 76% of the pension’s total exposure to foreign bonds.

Israel Bonds are fundamentally inferior to comparable fixed-rate investments, putting the pensions of New York public sector workers and retirees at risk. They are completely illiquid and can’t be sold on the secondary market. In the current rising rates environment, this can potentially cause us, as public workers and retirees, to miss out on higher returns that might be possible with other commensurate investments. Furthermore, this illiquidity jeopardizes our retirement by hamstringing stewards of the Fund, like Comptroller DiNapoli: because we’re stuck with many of these bonds for years, we’re “on the hook” regardless of whether Israel’s credit rating drops and the risk profile worsens (events that have recently occurred as a result of escalating regional war).

In addition, these bonds are alarmingly untransparent to us as pensionholders, since they are sold through private placements, behind closed doors, away from the oversight of open markets. The pricing of these bonds is not disclosed, which prevents pension members and the public from assessing the true performance of these investments. As far as we understand, the Comptroller and other financial managers of the Common Retirement Fund do not permit this lack of transparency for any other bonds in the portfolio.

But these investments are not just fiscally dubious: they are ethically questionable. The Comptroller’s unusually close relationship with the Development Corporation of Israel – the issuer of Israel Bonds in the US – raises questions about openness, accountability, and compliance with New York’s ethics laws. The Comptroller has taken trips to Israel that were orchestrated and paid for by a New York organization that receives institutional donations from Israel Bonds – a clear and potentially illegal conflict of interest. Comptroller DiNapoli continued to invest in these high-risk debt instruments even when Israel’s credit rating was downgraded and the country faced heightened legal and political risks. These are political investment decisions that prioritize the relationship with Israel over the needs of New York State workers and retirees.

Finally, we believe the NYSCRF should serve the long-term well-being of workers, retirees, and our communities – not subsidize military occupation, apartheid, and war. The retirement funds of New York State workers should not be loaned unconditionally to the Israeli government, which is responsible for indiscriminate bombing of civilians; forced starvation of children; and an apartheid system for the Palestinian people.

We appreciate your attention to this matter and hope for your support. We urge you to call on Comptroller DiNapoli to suspend new investments in Israel Bonds and cash in any sovereign Israel Bonds immediately.

Thank you for your consideration.

Sincerely,