Levine Can Still Keep His Word on Israel Bonds

When Mark Levine launched his campaign for New York City comptroller in 2024, the Big Apple led the nation in antisemitic incidents, and more than half of its hate crimes targeted Jews. In his own party, fewer than one in five Democrats approved of Israel’s conduct of the war in Gaza. In that climate, Levine said he would not let politics drive investment decisions and rejected calls to divest from Israel. He also promised to buy Israel Bonds, which the city’s pension funds had held for nearly five decades.

New Yorkers put about as much faith in campaign promises as they do in the Mets or the Jets winning a championship. But many Jewish New Yorkers counted on this one, especially with Zohran Mamdani, an outspoken critic of Israel, on his way to City Hall.

Levine made the financial case, too. In a June 2025 primary debate, he said a globally diversified portfolio should include “investments in Israel and Israel Bonds,” which “have paid solid dividends for 75 years.”

Now ten months into his term, Levine has just told the New York Times he won’t invest in Israel Bonds after all. “I always said this would be based on financial considerations only, not politics,” he said. He cited “some technical challenges” and financial ones. In a statement the next day, he said he is still evaluating Israel Bonds, and he pointed to “a rules change on our short-term investment desk made by the previous comptroller.”

I spent four years in the comptroller’s office, which manages the city’s five pension funds, now worth $326 billion and the third-largest public pension system in the country. I agree with Levine that this decision should rest on financial considerations, not politics. Israel deserves no special treatment from New York’s pension funds, and no special penalty. Like any sovereign debt, Israel Bonds carry risks, and reasonable fiduciaries can weigh them differently. But the financial reasons he gave do not hold up, even by his own test.

“Perhaps a year and a half ago,” he said, “I would have expected that the ratings would have been improved by now and/or that the interest rate would have gone up.” The rate went up. When he made his pledge, a two-year Israel Bond paid 4.24 percent. This month, it pays more than 5 percent. Every downgrade came in 2024, before his promise, and S&P and Moody’s have since raised their outlooks from negative to stable. The ratings held steady, and the risks were known. If the financial case supported his commitment then, what has materially changed?

Fighting on multiple fronts carries real economic risks for Israel. But those risks are not new. Levine made his promise while the war in Gaza was raging and more than 50 hostages were still held there. He reaffirmed it as comptroller this April, after two rounds of fighting with Iran. Through three years of war, the premium Israel Bonds pay over publicly traded Treasuries has barely moved. In May, S&P reaffirmed Israel’s A rating and called the economy’s resilience to security shocks “remarkable.” 

Other fiduciaries agree. New York State’s pension fund held about $268 million in Israel Bonds after a purchase in October 2023. Former City Comptroller Scott Stringer called them “a very sound investment.”

That leaves the “technical challenges.” Levine says a rule his predecessor adopted for the city’s short-term investment desk now stands in the way. That desk manages a roughly $1.3 billion account over which the comptroller has unilateral discretion, and earlier comptrollers used it to buy Israel Bonds. If one comptroller can write a rule that blocks Israel Bonds, the next can rewrite it, as the New York Times’s Sally Goldenberg noted. And if the short-term desk is the wrong place for Israel Bonds, he can ask the five pension boards, where he sits as a trustee and serves as investment adviser, to consider them for the funds’ long-term bond portfolios. If the trustees say no, so be it.

Unsurprisingly, Mayor Mamdani, who has voiced support for the BDS movement, welcomed the decision: “We don’t purchase the bonds of any other sovereign nation. I don’t think that we should make an exception when it comes to Israel.” The comptroller’s own holdings data says otherwise. As of mid-2025, the city’s pension funds held government bonds from Italy, Mexico and Chile, some rated below Israel. They also held hundreds of millions of dollars in companies controlled by the governments of China, Saudi Arabia and Qatar.

Whatever Levine’s reasons, activists are treating the decision as a political win. Within hours, Jewish Voice for Peace’s New York chapter declared a “BDS WIN” and vowed not to rest “until New York City has fully divested from the Israeli economy.” 

Levine says the city’s funds are not engaging in BDS, and he points to more than $285 million in Israeli investments, mostly stocks. I take him at his word. But the activists see his decision as a first step toward broader divestment. 

The activists’ target list goes well beyond Israel. It includes 47 American companies, among them Alphabet, Amazon and Microsoft. Based on past market performance, my organization, JLens, estimates that excluding them could cost the city’s pension funds more than $37 billion over a decade. The teachers’ fund alone could lose about $15 billion. Under state law, the city would generally have to cover the shortfall, which may mean higher taxes or cuts to schools, police and other services.

Few officials are better placed than Levine to show that Israel will be judged like any other investment, no better and no worse. He says he is still evaluating Israel Bonds. Good. He made his promise on the financial merits. Nothing in the numbers suggests the analysis has changed. He can still keep his word.

Ari Hoffnung is managing director of JLens and a former New York City deputy comptroller. The views expressed are his own.