Ark. Rejects Boycotts, Backs Bond Purchases

Arkansas Gov. Asa Hutchinson signed two bills strengthening his state’s economic ties with Israel on Aug. 14. The first allows Arkansas to invest in Israel Bonds; the second prohibits state and local governments from contracting with or investing in companies that boycott Israel.

Brad Young, the executive director of the Atlanta Israel Bonds office, and Art Katz, the Temple Emanu-El co-president who chairs the Atlanta Advisory Council, attended the signing ceremony, as did Israel’s ambassador to the United States, Ron Dermer.

“Those are two very strong messages that, one, we ought to be open to invest in Israel as need be, and we should not have any restrictions on those investments,” Hutchinson said about the bills.

The legislation enables Arkansas to be the 27th state investing in Israel Bonds. Georgia, which has purchased the bonds for more than a decade, holds $10 million worth.

Arkansas State Treasurer Dennis Milligan, whom Dermer welcomed at a reception hosted by local Jewish leadership, said he would like to allocate 1 percent of the state’s portfolio to Israel Bonds, which could mean a $30 million purchase.

Such a state investment in Israel would have seemed like a fantasy when Israeli Prime Minister David Ben-Gurion met with American Jewish leaders in September 1950 to discuss “a new approach to the scope of cooperation between the Jews of the United States and the people of Israel.”

Ben-Gurion proposed bond investments in Israel instead of donations, but those bonds weren’t expected to appeal to institutional, non-Jewish investors.

Not only has Israel overcome every challenge imaginable, however; it also has one of the world’s strongest, most resilient economies. After the global recession in 2008-09, Israel’s economy was among the first to emerge from the financial crisis.

Standard & Poor’s issued an opinion Aug. 4 revising its outlook for Israel from “stable” to “positive.”

“Israel’s fiscal performance has exceeded our expectations, reflecting the strength of the underlying economy,” S&P said, adding, “The positive outlook on Israel reflects our opinion that, despite existing spending pressures, there is a potential for stronger than anticipated fiscal performance over the next two years.”

Berkshire Hathaway Chairman Warren Buffett, upon making a personal $5 million investment in Israel Bonds, said: “You can tell prospective investors that I would have taken a perpetual bond if you had offered one. I believe Israel is going to be around forever.”

State treasurers, who are entrusted with the highest levels of fiduciary responsibility, have praised the value of investing in Israel Bonds.

Ohio Treasurer Josh Mandel has added more than $219 million in Israel Bonds to the state’s portfolio since 2011. After making a $61 million bond investment in April, he said: “This purchase was consistent with our strategy of making sound investments that prioritize Ohioans’ hard-earned dollars. Over many treasurer administrations, both Democratic and Republican, state treasurers have invested in Israel Bonds, and we are proud to carry on this tradition because it is in the best interests of the taxpayers of Ohio.”

Beyond the investment value of the bonds, the Israel factor is also important.

Illinois Treasurer Michael Frerichs, who has acquired $25 million in Israel Bonds and plans to purchase more for the state, cited “the special relationship with the Jewish democracy in the Middle East.”

Frerichs, who has been to Israel twice, most recently in 2016, said he “saw projects such as water and public transportation” that made him confident that “investing in Israel is a great investment.”

James S. Galfund is the national director of marketing and communications for the Development Corporation for Israel/Israel Bonds.

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