Israel Bonds’ Bad Business Decision


Israel Bonds, also known as the Development Corporation for Israel, is the U.S. underwriter of debt securities issued by the state of Israel. The concept of Israel Bonds was inspired by Israel’s first prime minister, David Ben-Gurion, as part of an effort to engage Diaspora Jewry as partners in the building of the Jewish state through their investment in the fledgling state’s debt securities.

The enterprise has been very successful. Since its inception in 1951, Israel Bonds’ worldwide sales have exceeded $48 billion, and Israel Bonds have become a staple in many retirement and pension accounts of businesses and organizations throughout North America.

Given that background, one would expect Israel Bonds to be sensitive to Diaspora concerns regarding positions taken, comments expressed and actions pursued by Israel’s government and its leaders, as any alienation of Diaspora Jewry could be bad for business.

And one would expect heightened sensitivity to any embrace by Israel Bonds of an extremist or controversial personality within Israel’s government, like the new Finance Minister Bezalel Smotrich, whose pronouncements and activities have raised alarm with the Biden administration and alienated large segments of Diaspora Jewry. But those assumptions and expectations are incorrect. Israel Bonds has embraced Smotrich and has
invited him to speak at its national leadership conference in Washington, D.C., next week.

Smotrich is more than a firebrand. He is a lightning rod. He has been variously described as a misogynist, a homophobe, a racist, a bigot, a Jewish fundamentalist and a hate-mongering ideologue. The fact that he is Israel’s finance minister changes none of that. But his high-ranking cabinet position gives him a prominent perch from which to make public pronouncements. Thus, last Wednesday, following the killing of two Israelis in a terror attack in the Palestinian town of Huwara, which was followed by a mob of hundreds of revenge-seeking settlers who stormed the town, killing one person and injuring dozens in addition to destroying businesses and homes, Smotrich declared: “I think the village of Huwara needs to be wiped out. I think the state of Israel should do it.”

Smotrich’s screed was so alarming and profoundly offensive that the normally staid State Department spokesperson Ned Price called the remarks “irresponsible,” “repugnant” and “disgusting.” Price characterized Smotrich’s comments as “amount[ing] to incitement to violence,” and urged Prime Minister Benjamin Netanyahu and “senior Israeli officials to publicly and clearly reject and disavow these comments.”

None of that seems to faze Israel Bonds. In a release late last week that appears oblivious to the swirling controversy over Smotrich’s visit and the protests it has already attracted, and which will almost certainly mount, Israel Bonds doubled down on its decision, asserting that it is “a nonpartisan financial organization” and that Smotrich’s visit is part of the history of “Israel finance ministers from across the political spectrum [who] have attended our events.”

The White House recognizes Smotrich’s toxicity and has made clear that U.S. government officials will not be meeting with him during this visit. But Israel Bonds’ plans remain unchanged. The organization’s alignment with Smotrich is morally troubling and is alienating a substantial portion of Israel Bonds’ investor base. It is a bad business decision.


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