<table cellspacing="0" cellpadding="0" border="0" ><tr><td valign="top" style="font: inherit;">I protested this a decade ago when I learned that Israel Bonds were in part how the IL Teachers' Retirement System TRS funded its pension system... and of course I got nowhere... Lotsa luck...<div> --Jenifer <br><br>--- On <b>Wed, 6/1/11, David Green <i><davegreen84@yahoo.com></i></b> wrote:<br><blockquote style="border-left: 2px solid rgb(16, 16, 255); margin-left: 5px; padding-left: 5px;"><br>From: David Green <davegreen84@yahoo.com><br>Subject: [Peace-discuss] Illinois purchase of Israel Bonds<br>To: "Peace Discuss" <peace-discuss@lists.chambana.net><br>Cc: "Angry Arab" <aabukhalil@csustan.edu>, "Phil Weiss" <weissphilip@yahoo.com><br>Date: Wednesday, June 1, 2011, 8:35 AM<br><br><div id="yiv496583469"><style type="text/css"><!--#yiv496583469 DIV {margin:0px;}--></style><div style="font-family:times new
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<h3 style="MARGIN:0px;FONT:100% Arial;">Posted by: "Clif Brown" <a rel="nofollow" ymailto="mailto:clif9710@earthlink.net?Subject= Re%3A%20the%20curious%20case%20of%20Illinois%27%20purchase%20of%20Israel%20Bonds" target="_blank" href="/mc/compose?to=clif9710@earthlink.net&Subject= Re%3A%20the%20curious%20case%20of%20Illinois%27%20purchase%20of%20Israel%20Bonds">clif9710@earthlink.net </a> <a rel="nofollow" target="_blank" href="http://profiles.yahoo.com/clif9710">clif9710 </a></h3>
<h4 style="MARGIN:0px 0px 20px;FONT:77% verdana;">Mon May 30, 2011 5:00 pm (PDT) </h4>
<div style="LINE-HEIGHT:122%;FONT-FAMILY:Georgia;FONT-SIZE:100%;" class="yiv496583469ygrp-content">When I read that a group in Minnesota was contesting the state purchase <br>of Israel bonds when foreign investments were specifically prohibited by <br>state law, I began to wonder about the situation in Illinois.<br><br>I checked with my state representative and after many weeks of no <br>response to my queries by email and voicemail, I went in person to the <br>rep's office and made a specific request for information that resulted <br>in the receipt of the PDF Illinois State Board of Investments, Annual <br>Report for 2010 <<a rel="nofollow" target="_blank" href="http://www.state.il.us/srs/PDFILES/ISBI2010.pdf">http://www.state. il.us/srs/ PDFILES/ISBI2010 .pdf</a>>, <br>easily obtainable on the Net.<br><br>Within this document there is precisely one mention of Israel and it is <br>from the listing of "Federal Agency and Other Governments" in the
<br>portfolio
of investments on page 32.<br><br>Now here is what makes this particular investment interesting<br><br>In the list of over 170 entries of which it is one...<br><br>1) it is large, at $12 million it is one of the 12 largest investments <br>in the list.<br>2) alone in the list, it is not top quality (AAA) as rated by Moody's <br>but A1 (anything A or above is OK per Illinois investment policy). It is <br>not rated by Standard and Poors<br>3) alone in the list, it has no entry for yield to maturity (maturity is <br>in February 2013)<br>4) alone in the list, it is issued by a foreign government, every other <br>member of the 170+ entry list is a US government or agency issue.<br><br>There are foreign investments by Illinois but they are in companies, not <br>government securities.<br><br>My questions to the Illinois State Treasurer:<br><br>*> why is Israel the only foreign country whose government issues are <br>chosen for purchase by Illinois? When only
one entry out of over 170 <br>instruments is not domestic, this cannot be for international <br>diversification. *<br><br>*> since the return from the Israel government investment is no better <br>than most other purchases in the category, how does it serve the <br>financial interest of Illinois to purchase it?<br>*<br>*> Illinois Treasurer Dan Rutherford has said "State of Israel bonds are <br>a secure investment with an outstanding track record; they produce a <br>strong rate of return and Israel has never defaulted on payments of <br>principal or interest," yet this is true of many countries. Why is <br>Israel's the only foreign government securities purchased?*<br><br>*> according to the Illinois State Treasurer's rules for investing <br><<a rel="nofollow" target="_blank" href="http://www.treasurer.il.gov/about-us/pdf/GRInvestmentPolicy20081224.pdf">http://www.treasure r.il.gov/ about-us/ pdf/GRInvestment Policy20081224. pdf</a>>,
<br>section 5(k) (page 5 of PDF) states: "Securities of a foreign government <br>that are guaranteed by the full faith and credit of that government as <br>to principal and interest and /rated A or higher by at least two of the <br>standard rating services.../ " In the Illinois State Investment Board <br>listing, the Israel bonds are rated only by Moody's, under the Standard <br>and Poor's column is "N/A". Where is the second rating required by the <br>investment policy?*<br><br>*> Most important of all - Israel violates international law in the <br>occupied territories and acts against United States policy as well. <br>Since there is no stipulation in the sale of Israel bonds as to how <br>Israel will use the money, Illinois money can go toward building illegal <br>settlements or subsidizing settlers in violation of the law. As a <br>law-abiding Illinois citizen I object to my state government investing <br>state funds that may be used without
restriction for illegal purposes.*<br><br>Is anyone still awake and reading?<br><br>It boils down to only Israel's bonds being purchased, bonds with a yield <br>(5%) that is average, not a standout as you would expect for an investor <br>stepping outside domestic investments to choose a particularly good buy <br>from a single foreign country. Since no other countries are represented <br>in Illinois' portfolio, it appears to be a special investment made for a <br>reason other than a good return to the people of Illinois. Since <br>increasing the number of bidders for government debt will act to drive <br>down the interest rate for that debt (meaning a cheaper loan for the <br>debtor), Illinois, when joining with other states in creating a market <br>for Israel bonds, drives down the cost for Israel. It would appear the <br>purchase is being made specifically to benefit Israel, not Illinois.<br><br>Finally, there is no stipulation by Israel on how the
money raised with <br>Israel bond sales will be spent. Israel may freely use the money from <br>Illinois to build settlements or subsidize settlers.<br><br>I will advise of the answers, if any, that I receive.<br><br>Clif Brown<br></div></div></div></div><br>-----Inline Attachment Follows-----<br><br><div class="plainMail">_______________________________________________<br>Peace-discuss mailing list<br><a ymailto="mailto:Peace-discuss@lists.chambana.net" href="/mc/compose?to=Peace-discuss@lists.chambana.net">Peace-discuss@lists.chambana.net</a><br><a href="http://lists.chambana.net/mailman/listinfo/peace-discuss" target="_blank">http://lists.chambana.net/mailman/listinfo/peace-discuss</a><br></div></blockquote></div></td></tr></table>