Israel Bonds divide Pennsylvania treasurer race
Banking on BondsCandidates opinions diverge on buying Israel bonds

Israel Bonds divide Pennsylvania treasurer race

“We’ve been invested in these bonds since the ’90s,” she said. “They pay above-market returns and they’ve never defaulted.”

State of Israel Savings Bond. (Photo by Reuben Strayer, courtesy of
State of Israel Savings Bond. (Photo by Reuben Strayer, courtesy of

Pennsylvania State Treasurer Stacy Garrity believes Israel Bonds make a good investment.

Following Hamas’ Oct. 7 terrorist attack against Israel, Garrity, a Republican, ordered an increase of $20 million in the state’s investment in Israel Bonds.

(Photo provided by Stacy Garrity)

And while she believes that it’s important to stand with Israel, Garrity said the investments are simply good for Pennsylvania.

“We’ve been invested in these bonds since the ’90s,” she said. “They pay above-market returns and they’ve never defaulted.”

Erin McClelland, Garrity’s opponent in the November general election, has a different view.

McClelland, a Democrat and former employee at the Allegheny County Department of Human Services, said that she doesn’t believe the state should put money in foreign bonds, especially if it means taking sides in an overseas conflict.

“We’ve never seen the treasurer take sides in foreign conflicts before,” she said. “That’s a relatively new construct we’re seeing that is becoming very prevalent in the Republican Party.”

(Photo provided by Erin McClelland)

Citizens interested in taxpayer dollars being invested in foreign conflicts, she said, should do so through the proper avenue — a U.S. congressperson or senator.

McClelland said Israel’s war in Gaza, and Moody Investor Services’ decision earlier this year to downgrade the Jewish state’s credit rating from A1 to A2, are reasons not to invest in the Jewish state.

Furthermore, she said that when dealing with terrorist organizations, there should be a concern about municipalities becoming a target.

“We’ve seen an increase in those attacks since October,” she said. “We saw the Aliquippa Water Authority get hacked by Iran because they use an Israeli-made software system.”

Garrity’s focus, McClelland said, should be on protecting municipalities and using the resources of the cybersecurity program in the treasury to ensure the state’s schools, water authorities and emergency response infrastructure are safe and secure.

Pennsylvania’s treasurer disagrees.

Garrity said she “unequivocally” stands with Israel.

She explained that she can’t simply invest the state’s money in anything she wants, and there is the “prudent investor standard,” which is a legal guideline for trustees of investment portfolios that requires a fiduciary to act in the best interest of the trust’s beneficiaries and outlines standards for legally controlling investment portfolios.

“Also, we have an investment policy statement which says, basically, what percentage of your portfolio can be invested in fixed income, what percentage can be in equities and so on,” Garrity said. “We are well within what our investment policy statement says for those targets.”
McClelland is not alone in disagreeing with Garrity.

In February, pro-Palestinian activists protested the treasurer’s investment in Israel Bonds at the state capitol, leading to dozens of people being arrested.

A second protest took place in March, this one a “die-in,” where people laid in front of the Pennsylvania Treasury Department’s office building.

“I said the only die-in that took place occurred on Oct. 7,” Garrity said, “so quite honestly, they could come and protest every day. It wouldn’t bother me.”

Despite the protests, Garrity has said most of what she’s heard has been positive.

“I would say 99% of Pennsylvanians have applauded me for it,” she said. “They want to be on the right side of history and fully support being invested in these bonds.”

Garrity doesn’t simply believe in investing in Israel Bonds; she also doesn’t agree with divesting from Israel, nor does she support the BDS movement.

“In fact,” she said, “Pennsylvania has Act 163 from 2016 and it prohibits state agencies or affiliates from contracting with companies engaged in BDS activities against Israel.”

McClelland’s position is more nuanced, saying divesting from Israel Bonds would be difficult because they aren’t tradable.

“Once you have them, you’re kind of stuck with them,” she said, “unless you have a partner that wants to buy them and you’re probably going to sell them for a loss, and I couldn’t do that to taxpayers.”

Pushed on whether she supports BDS, McClelland said she’d rather not politicize the Treasury Department’s Office and, instead, would prefer to use the money to invest wisely for the people of Pennsylvania.

And while she said the issue has turned the treasurer’s race — which doesn’t typically garner much attention — into a hot campaign, she would prefer to stick to the functions of the job.

“We’re talking about running a treasury of $163 billion,” she said.

For her part, Garrity thinks Israel Bonds are a good investment, war or not, and is certain there is only one party to blame for the war between Israel and Hamas.

“Israel is our greatest ally in the Middle East,” she said. “When I talk with folks about this, I say, ‘Let me put it simply: If Hamas stopped fighting today, there would be no more war. If Israel stopped fighting, there would be no more Israel.” PJC

David Rullo can be reached at

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