During a contentious race last year for the role of New York City comptroller, one issue routinely arose: whether the city would reinvest portions of its $325 billion pension system in Israeli bonds.
On the campaign trail, Mark Levine, an ardent supporter of Israel, vowed to buy bonds from Israel after his predecessor opted in 2023 not to renew them. Mr. Levine continued his pledge after he won the race and took over the office this year, defending the investments as recently as April, while Israel remained mired in international conflict.
Now, in his 10th month in office, Mr. Levine is backing off his campaign promise.
In a recent interview in his Lower Manhattan office, Mr. Levine, a Democrat, said he and his investment team had decided not to purchase bonds from the state of Israel. He insisted he made the decision entirely on financial grounds, while acknowledging the fraught nature of his walking away from any stance of public support of Israel.
“I always said this would be based on financial considerations only, not politics — that’s still my position,” Mr. Levine said, describing an “ongoing” analysis his office is conducting. “But as of now, we feel that because of some technical challenges, and because of financial considerations, that this is not an investment that we can make right now.”
He said he struggled with the decision personally: He is Jewish, speaks Hebrew, has spent a considerable amount of time in Israel and has friends and relatives there. Mr. Levine remains one of the few staunchly pro-Israel Democrats in New York City, in contrast to the mayor, Zohran Mamdani, who has fiercely criticized Israel.
“I feel a real closeness to the country, and I’m also heartbroken at the state of politics in the country right now,” Mr. Levine said, criticizing the government of Benjamin Netanyahu, the prime minister who is up for re-election this month.
Mr. Levine readily discussed his support for Israel during the campaign for comptroller last year, and resisted calls to continue disinvestment from the bonds, a policy that began under his predecessor, Brad Lander. At the time, the pension system invested roughly $40 million in Israeli bonds.
Israeli bonds have historically been viewed as a sturdy and reliable investment. But they have been downgraded by several ratings agencies over the course of the wars in Gaza, which began in 2023, and Iran, which started in February.
Fitch Ratings, for instance, lowered its outlook from “stable” to “negative” in April of 2024 and hasn’t upgraded it since, according to information provided by Mr. Levine’s office.
S&P Global and Moody’s both downgraded the bonds during the war. Each has reversed its outlook from “negative” back to “stable,” but the technical ratings remain below what they were in early 2023, before the Israel-Hamas war in Gaza.
The investments have a varied rate of return, hovering over 5 percent for two- and three-year bonds, which lags the recent performance of the pension system.
Mr. Levine’s office does invest in some bonds that provide a rate of return below that of the Israel bonds, but his team said that when accounting for instability in the region, and the office’s preference for shorter-term bonds, it made sense not to reinvest.
The city’s pension system is controlled by five distinct boards that are tied to municipal unions, including teachers, police officers and firefighters. The comptroller has unilateral discretion over roughly $1.3 billion, and it was from this pot of money that Mr. Levine’s predecessors invested in Israel bonds. The pension system has over $285 million invested in Israeli companies, Mr. Levine said.
Instability in the region had already taken root when Mr. Levine began promising to reinvest in Israeli bonds.
Asked why he made that campaign pledge, given the war abroad, he acknowledged he did not have a full understanding of the financial picture and said he wanted to reject calls to support the Boycott, Divestment, Sanctions movement that targets Israeli goods.
“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.”
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