Will New York divest from Israel Bonds and its $294 billion pension portfolio?

A group of advocates is urging New York to divest its government pension programmes from Israel Bonds, arguing that they could be an investment risk and are likely politically motivated.

A political conflict over New York's Israel Bonds holdings developed following the recent November election of Zohran Mamdani, who has indicated that the city would divest from Israel Bonds in its $294 billion pension portfolio, contrary to the position of his predecessor, Eric Adams.

"It is almost subversive that they mask these political actions as financially sound decisions that affect the pension holders. And there's an actual risk here – not just of supporting something bad, but of putting people's futures at stake," Michael Schaeffer Omer-Man, Israel-Palestine director with Democracy for the Arab World Now (DAWN), told The New Arab.

"They have a fiduciary duty to prioritise the investments of their pension holders," he said.

He says that DAWN, along with several other groups, is prepared to support litigation if New York City and the state don't divest and comply with their demands for transparency, including requiring the person who sells Israel Bonds to register as a foreign agent.

He added that they intend to move forward with the same demands for other states.

The issue is at both the city and state levels. At the city level, the previous comptroller, Brad Lander, who ran for mayor against Mamdani and cross-endorsed him, had said that he wanted to divest from Israel Bonds. His successor, Mark Levine, has, however, expressed opposition to divestment. The state's comptroller, Thomas DiNapoli, has said he will continue the investments, though Raj Goyle, a leading candidate for that position for the 2026 race, has said he would divest.

In a statement to TNA, Goyle's campaign office confirmed that it would not accept Israeli bonds as investments in the New York state pension program.

"Our position has been clear: New York should not be investing in foreign bonds. The Comptroller's fiduciary duty is to protect New Yorkers' money — not gamble hundreds of millions of dollars on risky foreign bonds with mediocre returns for political optics, which is exactly what Tom DiNapoli has done," reads Goyle's statement.

"While Tom DiNapoli says it doesn't make sense to invest more in affordable housing in NY, for example, I will divest from foreign bonds and put New York first," he added, suggesting he would put local needs first, in contrast with the man he plans to compete against in the next election.

For his part, DiNapoli's office shared a statement with TNA explaining his support for Israel bonds in the state pension programme.

"Israel bonds comprise far less than 1% of the Fund's nearly $300 billion in assets and have provided a greater return than US Treasury bonds. The Fund's investment in these bonds dates back to 1991 and is not based on politics," reads the statement.

At the city level, the offices of Mayor Mamdani and Comptroller Levine did not respond to TNA's requests for comment.

One of the biggest pushes for Israel Bonds for New York's pension programme and those of other states came in October 2023, days after a Hamas-led attack on Israeli military bases and settlements within and around the Gaza envelope. The homepage of the Israel Bonds website boasts that since 7 October, they have surpassed $5.7 billion in global investments.

A press release from DiNapoli's office dated 13 October 2023 states that the New York State Common Retirement Fund has purchased an additional $20 million in Israel bonds offered by the Development Corporation for Israel, bringing the state pension’s holdings in these bonds to $267.8 million.

"New York state's pension fund buys Israel bonds because we have confidence in the spirit of innovation and tenacity of the Israeli people and in the strength of our investments there," the statement, attributed to DiNapoli, reads.  

"In addition to providing a steady return for our pension fund's members, Israel bonds help support one of our nation's strongest allies. I am heartened that so many other public funds have stepped forward to purchase bonds and support Israel, the only democratic government in the region, during these tragic and challenging days," the comptroller continued.

The statement noted that New York had joined Florida, Illinois, Ohio, Pennsylvania, Texas, and other public US funds in purchasing $150 million in Israeli bonds recently.

As of November 2025, the credit rating agency Standard and Poor's assigns Israel an A with a stable outlook, an improvement from the previous year, which had a negative outlook. As of January 2026, Moody's rating of Israel is Baa1 with a stable outlook.

Many countries' pensions include foreign bonds. However, DAWN and other advocates say that documented human rights violations by Israel would legally require governments not invest in their government's financial products, and that past credit downgrades related to conflict could put Americans' pensions at risk.

"Our city and state public officials should ensure that there are no further investments in Israel Bonds because such investments breach their international legal obligations not to aid and abet Israeli crimes and their fiduciary duties to taxpayers," reads a public statement by Sarah Leah Whitson, DAWN's executive director.

She says, "For too long, our public officials have prioritised politically expedient support for Israel, using taxpayer money to finance Israel's brutal war machine, ignoring the clear financial, ethical and legal harms to our citizens."