Maryland Pension Fund Increases Investments in Israeli Bonds

Maryland’s public pension fund has raised its investments in Israeli bonds to $74 million this year.

On a chilly but bright October morning, Grace Smith, 42, a middle school teacher from Baltimore County, attended the annual Statewide Teachers Union Convention in Ocean City, Maryland. Alongside two colleagues and armed with a folder of zines, their goal was to inform fellow educators about Maryland’s pension investments in Israel while distributing the pamphlets.

Smith estimated that they spoke to dozens of teachers and handed out over 200 zines. The feedback was largely positive. “Everyone I encountered was pleased to learn about it,” she mentioned, adding, “They didn’t know and were outraged.”

The campaign, part of a wider initiative aimed at halting U.S. support for what many view as the ethnic cleansing of Palestine, included materials highlighting how Israel finances actions in Gaza and the ongoing expansion into the occupied West Bank through the bonds sold there. Despite credit downgrades and a shift in investment sentiments, the Maryland State Retirement System (MSRPS) holds more than $70 million in these bonds, information that emerged through Freedom of Information Act requests.

The message is straightforward: “Invest Maryland’s money in Maryland’s future, not in genocide.” This holding, a mere fraction of Maryland’s $70 billion portfolio, represents a symbolic target of a campaign aimed at the 420,000 members in the pension system, including teachers and state employees.

Smith became involved in the campaign through weekly discussions in Baltimore. As an educator, she’s particularly concerned about reports of U.S.-backed Israeli actions resulting in the deaths of Palestinian children. “It’s disturbing to think my retirement is tied to their suffering,” she reflected, stating, “Pension funds shouldn’t profit from investments tied to genocide.”

America’s Investment Choices Diverge from Global Trends

In the last two years, the U.S. has provided Israel with over $21 billion in military aid, yet public opinion appears to be shifting. Recent polling shows that half of U.S. voters, including three-quarters of Democrats, now believe Israel is committing genocide in Gaza. Although the campaign acknowledges divestment won’t be easy, they view it as a vital way to pressure politicians and ensure accountability.

“Federal policies remain unchanged,” said Lauren Loeffler, 31, one of the campaign organizers. “However, state officials can change the narrative around these investments.” In the past two years, Israel has increasingly relied on international bonds to support its military efforts, raking in around $5 billion from U.S. investors, primarily from state and local governments.

According to a Public Information Act request, the Maryland pension fund secretly purchasing $10 million in Israeli bonds between mid-2024, bringing total holdings to $74 million, even as larger international funds were divesting out of concern for human rights.

“Witnessing genocide funded by tax dollars can leave people feeling powerless,” Loeffler said. “I realized it wasn’t just federal; it was also about state and local issues that’s within my capability to address.”

The campaign consists of about 40 core members led by Baltimore and Washington, D.C. chapters, including Jewish Voice for Peace (JVP), the largest anti-Zionist Jewish organization in America. Their discussions with state officials were publicly acknowledged after multiple closed-door meetings yielded no results.

Maryland has significant economic ties to Israel. In 2017, the state even prohibited companies from receiving state contracts if they boycotted Israel. Proponents of the divestment have faced accusations of anti-Semitism, which the campaign vigorously contests.

Loeffler, raised Jewish in Maryland, states her faith drives her opposition to violence “in the name of Jewish safety.” She reasoned that “there’s no freedom or safety for Jews committing violence against others.” While her stance has led to some family tensions, it has only strengthened her resolve that “action is essential to correct moral failings.”

This movement among young Jewish activists aligns with shifting perspectives. Polls indicate that four in ten American Jews now view Israel’s actions as genocidal, with 61% believing war crimes are currently being committed.

Maryland’s Approach Contrasts with Global Trends

Earlier this year, a Norwegian foundation and Denmark divested from Israeli investments due to human rights concerns, coinciding with increased Israeli military actions in Gaza. On November 4th, voters in Massachusetts cities like Somerville and Portland approved measures calling for similar divestment. In contrast, Maryland is heading in the opposite direction. Just last year, major credit agencies downgraded Israeli bonds while Maryland continued to invest, offering returns that are notably high yet risky.

“The elevated interest rates indicate the risk involved,” Loeffler said. “Even if it might appear attractive financially, it’s still tied to genocide.”

Rebecca Reilly, a 29-year-old University of Maryland employee, has been actively involved in the campaign since August. She described the initiative as an effective alternative to mere protests. “My previous activism mainly revolved around street demonstrations,” she shared. “Here, I’ve discovered impactful ways to make change.”

She noted varying reactions from those she spoke with; some individuals embraced the historical context while others shied away from the harsh realities due to preconceptions about Israel and Judaism. “It’s vital to distinguish between the religious identity of Judaism and the actions of the Israeli government,” she emphasized.

For Reilly, divestment signifies an ethical obligation. “It’s about saying, ‘This is our money, and we have a responsibility to cease funding human rights violations.'”

Officials Claim No Responsibility

Activists reported being in discussions for months with officials, including the acting chief investment officer of MSRPS, who stated that investment decisions are bound by state law and focus on members’ financial benefits. A representative for the comptroller echoed this sentiment, underscoring that any policy reform would require legislative action.

Campaigners maintain that while they’re drafting proposed legislation, the urgency related to genocide requires swifter action. “Officials have shifted responsibility by saying it’s just about finances,” Loeffler explained. “However, each of us has a responsibility to strive for justice.”

Interestingly, Maryland has acknowledged moral duties in other contexts, requiring pension funds to regularly evaluate climate risks and create advisory committees aimed at addressing environmental implications in recent years. Activists contend this sets a precedent showing that systemic harm can, and should, be considered in investment decisions.

They also point out that the MSRPS has to adhere to United Nations principles for responsible investing, which mandates consideration of human rights. A UN panel recently attributed acts of genocide to Israel regarding Gaza, which makes the lack of action on these investments all the more pressing.

When activists suggested that the same principles applied to Israel, they were informed that future purchases would remain at fund managers’ discretion. “They claimed that changing the approach would attract negative attention,” Loeffler remarked. “But by continuing to invest, they are making a political statement.”

Lessons from the Fight Against Apartheid

In 1984, Maryland was among the first states to divest from apartheid South Africa, ultimately assisting in the collapse of that regime. Many South Africans draw parallels between their liberation struggle and that of Palestinians under Israeli occupation. A recent case at the International Court of Justice underscored these connections, framing their actions as a logical continuation of the anti-apartheid movement.

For Loeffler, these connections are deeply personal, rooted in her experiences studying in Cape Town, where she confronted the remnants of apartheid daily. “The stark reminders of apartheid were inescapable,” she recounted. As the conflict intensified in Gaza during 2014, she began to synthesize these struggles, reflecting that many of these truths had eluded her education. Her participation in the JVP’s Baltimore chapter and her role within the Break the Ties movement emerged from this evolving perspective.

Break the Bonds is part of a wider reevaluation regarding how public funds can perpetuate violence and environmental harm. Across the globe, pension funds once heavily invested in fossil fuels and oppressive regimes are facing scrutiny over their complicity in destruction.

“Just as institutions came to terms with their obligations not to profit from apartheid or climate devastation, we must do the same here,” Loeffler asserted. “We bear a moral obligation to stop investments that enable genocide.”

Ultimately, both in Maryland and on a global scale, the core question remains: what should investments support, and what should they avoid?