Investments in Israel Bonds Breach International and Domestic Fiduciary Duty Obligations, Expose Taxpayers to Financial, Reputational and Legal Risks
(New York, N.Y., January 30, 2026) — New York State and New York City officials should immediately cease new purchases and divest any holdings of Israel Bonds because such investments breach their international and domestic legal obligations and expose citizens to unnecessary legal, financial and reputational harms, DAWN said today in a cease and desist letter to public officials. In a 26-page memo accompanying the letter, DAWN detailed the legal, ethical, and financial risks of investments in Israeli government sovereign debt instruments that fund Israeli security forces responsible for genocide, apartheid and illegal occupation.
"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," said Sarah Leah Whitson, DAWN's executive director. "For too long, our public officials have prioritized 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."
Although former City Comptroller Brad Lander divested the city's holding in Israel Bonds in 2024, citing these legal and financial risks, City Comptroller Mark Levine has promised to reinvest in the bonds. The New York State Common Retirement Fund (NYSCRF) is one of the top U.S. investors in Israel Bonds, with over $352 million invested in Israel Bonds as of March 2024. Candidate for State Comptroller Raj Goyle has pledged to divest state holdings in the Bonds, citing their legal and financial harms to taxpayers.
"A politically motivated, high-risk, illiquid, sovereign instrument tied to an unlawful situation cannot satisfy the duties of loyalty and prudence," said Michael Schaeffer Omer-Man, DAWN's Israel-Palestine Director. "To restore public trust and uphold the integrity of their stewardship of public funds, New York officials must end these politically motivated investments."
DAWN sent its letter and memo to New York Governor Kathy Hochul, Comptroller of the State of New York Thomas P. DiNapoli, New York Attorney General Letitia James, Comptroller of the City of New York Mark D Levine, and New York City Mayor Zohran Mamdani. The letter demands that they stop any new purchases, roll-overs, or subscriptions for Israel Bonds; adopt and publish a policy prohibiting further purchases of Israeli state securities until Israel ends its unlawful occupation, apartheid rule and ongoing genocide; and implement a prudent wind-down plan for any existing positions, consistent with liquidity constraints, legal obligations, and best execution. The letter warns that if they do not conform to the demands, DAWN is prepared to support litigation in appropriate forums.
"There's no complicated analysis needed here: New York is using taxpayer money to finance a military the entire world has watched commit war crimes and crimes against humanity for years," said Raed Jarrar, DAWN's advocacy director. "Brad Lander understood this and divested — Mark Levine's promise to reinvest is a promise to keep funding Israel's war machine with New Yorkers' money."
DAWN's communications outline how investments in Israel Bonds breach international legal obligations not to facilitate Israeli crimes in Palestine, including illegal occupation, genocide, apartheid, war crimes, and crimes against humanity. The Israeli government uses assets from the sale of Israel Bonds to finance the Israel Defense Forces and weapons used in contravention of the laws of war to terrorize Palestinians. Since October 8, 2023, Israel has killed over 71,000 Palestinians in Gaza and subjected the population to starvation and genocide, in indiscriminate and deliberate attacks on civilians and a siege on food, medicine, fuel, and other items essential for the survival of the population.
In its July 19, 2024 advisory opinion, the International Court of Justice (ICJ) concluded that Israel's continued presence in the Occupied Palestinian Territory is unlawful and emphasized that states, including their individual investors, have obligations to not support that illegal situation. In its September 19, 2024 resolution, the United Nations General Assembly (UNGA) adopted the ICJ's advisory opinion and called on states "not to render aid or assistance in maintaining the situation [of unlawful occupation]," and to "prevent trade or investment [with Israel] that would serve to maintain the situation." The UNGA resolution makes clear that these obligations extend to sub-national public authorities and state-controlled entities, including cities, states, pension systems, treasuries, and other custodians of public funds.
Such investments also breach the New York State and New York City fiduciary duties of public officials. Because New York's fiduciary framework binds public investment authorities to act solely for the financial benefit of members and beneficiaries and to exercise independent, reasoned judgment based on foreseeable financial and legal risks, continued investment in instruments that present quantifiable legal, financial, and reputational exposure (such as Israel Bonds) raises a credible risk of breach of fiduciary duty and attendant litigation liability.
Continued investment in Israel Bonds will subject taxpayers and public officials to legal and reputational harm. Israel Bonds are not passive market instruments but direct loans to the Israeli government used to fund its defense forces, weapons, and military operations, and explicitly marketed as expressions of political and financial support. As a result, they have become focal points for protests, boycotts, and organized divestment campaigns across the United States. State treasurers, pension trustees, and elected officials associated with these investments have faced sustained public pressure, media scrutiny, and reputational harm as Israel's conduct in OPT has been widely characterized by major human rights organizations as involving serious violations of international law. The reputational exposure is therefore not abstract but tangible, visible, and ongoing.
"Investments in Israeli state securities, including Israel Bonds, effectively allocate public funds to sustain criminal acts," said Alex Smith, a DAWN legal advisor. "New York officials continuing to make such investments in the face of overwhelming evidence of the war crimes and crimes against humanity they support may face personal civil and criminal liability for aiding and abetting those crimes."
International and domestic legal frameworks recognize that financial contributions to internationally wrongful acts may trigger secondary liability, even where the assisting party does not directly participate in military operations. Material support includes logistical, economic, political, or operational support, and is not limited to direct battlefield involvement. Israel Bonds investments therefore pose not only fiduciary and ethical risks, but also substantial legal exposure under U.S. aiding-and-abetting law.
Highlighting the legal and fiduciary risks of Israel Bonds investments, DAWN cited the pending lawsuit by Palm Beach County residents against the County Clerk and Comptroller, asserting that the county's investments in Israel Bonds violated fiduciary, constitutional, and statutory duties governing public funds. Their petition emphasizes that Florida's public fund trustees are bound by the "exclusive benefit" rule and must ensure that investments serve legitimate public and financial purposes, and not ideological or political agendas.
"This memo compiles an undeniable record of evidence demonstrating that investments in Israel Bonds by U.S. governments are a direct violation of public will, domestic law, and international law," said Lydia Ghuman, Executive Director of The Internationalist Law Center which filed the Palm Beach County lawsuit. "Investments in Israel Bonds are risky and are often not the most profitable source of investments available to localities, underscoring that the true motive for these investments is signaling allegiance to a foreign entity–all at the expense of the needs and trust of local constituents."
