In a rare legal move, Harvard-trained independent lawyer David Pina has filed a lawsuit on behalf of three anonymous US citizens of Palestinian origin, demanding that an elected official in a Florida county face a jury trial over his “highly unusual” $700 million investment in Israeli bonds.
With a population of 1.5 million, Palm Beach County in southern Florida is the single-largest global buyer of debt issued by Israel Bonds—a corporation that raises funds worldwide for the Israeli government, which has been borrowing extensively to finance its $67 billion war in Gaza since last October.
Pina asserts in the lawsuit that Joseph Abruzzo, the elected comptroller of Palm Beach County, violated public trust and multiple Florida state statutes by investing $700 million of the county’s $4.6 billion portfolio in Israel Bonds.
He explains that the plaintiffs remain anonymous to protect their lives and livelihoods.
“There’s no parallel, nothing to compare our situation to, in the United States. We’re suing the world’s biggest investor in Israel Bonds. And they make a big deal out of that,” Pina tells TRT World.
“He’s not investing money for some cowboy-Donald-Trump-billionaire who just wants to make a big-risk, big-return type of thing. This is money for the people, this is money for a government. Florida has several statutes that actually control the type of investment that we can have with our money,” Pina says.
US investors have increasingly invested in Israel Bonds since the onset of the Gaza war, which has resulted in nearly 37,000 Palestinian deaths, mostly women and children.
One-quarter of all foreign debt Israel raised in 2023 was through Israel Bonds.
“This is trying to take away $700 million from the Israeli military. There’s no parallel to the level of danger that our plaintiffs would face if they came out with their names,” Pina says.
The corporation’s marketing appeals to Zionist sentiments: “Israel is at war. We stand with Israel. Make a statement, Invest in Israel Bonds,” its website declares in bold letters.
Since October, the corporation has sold $3 billion in bonds, about three times its annual average.
Analysts attribute the high borrowing levels to Israel’s increased military spending, which has widened its fiscal deficit to seven percent of GDP, exceeding the 6.6 percent target.
Unlike other dollar-denominated debt instruments that can be sold at any time, Israel Bonds aren’t traded in a secondary market and must be held to maturity—a feature suitable for Jewish retail clientele.
Family elders in Jewish households in the US commonly buy long-term Israel Bonds as gifts for Bar and Bat Mitzvah ceremonies.
However, the war hysteria has led at least 35 US states and many municipalities to invest more than $1.7 billion in Israel Bonds since October, which Pina argues are neither safe nor lucrative.
Investments by US state and local governments are unusual, as large investors typically view held-to-maturity bonds unfavorably due to the lack of a secondary market, which locks funds into low-yield bonds for years.
Legitimacy in question
A Financial Times report cites three reasons why states and municipalities in the US are investing in Israel Bonds: permissibility under state and county laws, perceived low risk with returns higher than US treasuries, and solidarity with Israel in its war on Gaza.
Pina rejects these criteria, stating that investing municipal funds in support of a country at war is a political, non-financial decision that violates Florida statutes.
Buying $700 million in Israel Bonds while the Gaza war continues poses an “economic threat” to Palm Beach County’s taxpayers, he says.
Although US laws allow local governments to invest in certain international avenues like Israel Bonds, the permissibility is contingent on financial factors alone.
Florida law explicitly prohibits its municipalities from investing public money for social or political reasons.
Despite this, Abruzzo, a non-Jewish Democratic overseer of Palm Beach County investments, has repeatedly expressed public support for Israel, describing it as America’s “greatest ally” that needs “our full support”.
“I am proud to show solidarity with the people of Israel and make Palm Beach County the first county in the nation to increase its investment in Israel Bonds following their declaration of war against Hamas,” Abruzzo was quoted as saying after the start of the Gaza war last year.
