Despite ongoing allegations of mass atrocities in Gaza and the continuation of a discriminatory system in the occupied West Bank, New York City may once again move toward investing its pension funds in Israeli government bonds. Such a decision would effectively channel public tax money directly into Israel’s state treasury.

According to a report published last Saturday by the UK-based Financial Times, city officials in New York are reconsidering the option of resuming these investments. This comes even though the city’s current mayor, Zohran Mamdani, has publicly argued for withdrawing investments from Israel because of its actions in Gaza.

New York City’s Chief Financial Officer, Mark Levine, told the Financial Times that Israeli bonds have shown strong returns and maintain a high investment rating. He said his responsibility is to make decisions based on historical performance rather than political considerations.

Israeli government bonds function as direct loans to the state, providing investors with regular interest payments while giving the Israeli government immediate access to funds.

Critics argue that investing in these bonds amounts to financially supporting Israel’s policies, including systemic discrimination, illegal settlement expansion, the displacement of Palestinians, and the killing of civilians in Gaza and the West Bank.

The potential move has sparked renewed tension inside City Hall. One of Mayor Mamdani’s first actions after taking office on January 1 was to revoke an order issued by former mayor Eric Adams. That directive had barred city agencies from boycotting Israel or withdrawing investments linked to it.

Long before assuming office, Mamdani—an outspoken critic of Israel’s military actions—had stated that New York should not maintain funds invested in activities that violate international law.

Levine, who has acknowledged his Jewish identity and personal and family ties to Israel, insists that pension fund decisions should remain insulated from political influence and be guided solely by financial criteria.

This position persists despite warnings from credit-rating agencies such as Moody’s, which have cautioned that Israeli bonds now carry increasing levels of risk. Nevertheless, Levine has reportedly begun efforts to resume purchases.

As a result, a fresh debate has emerged over whether it is appropriate for New York’s pension funds to be invested in a state facing serious allegations of violations under international law.

The controversy marks a departure from long-standing practice. For nearly five decades, New York regularly invested hundreds of millions of dollars in Israeli bonds.

That pattern was interrupted in 2023, when then-CFO Brad Lander broke with tradition by declining to purchase new bonds and allowing existing ones to mature.

At the time, Lander said Israel should not receive special treatment and should instead be evaluated under the same standards applied to all other countries.