The advocacy group Democracy for the Arab World Now (Dawn) has warned New York State and City officials that it is prepared to pursue legal action to block further purchases of Israel Bonds. In a statement shared with Middle East Eye, Dawn said such investments could place public officials in breach of fiduciary duties and international legal obligations. The group noted that New York State and New York City have previously invested in Israeli government bonds, with the New York State Common Retirement Fund holding more than $352 million in Israeli debt as of March 2024. Israel Bonds are affiliated with Israel’s finance ministry and are sold in the United States to retail and institutional investors.

The issue has gained renewed attention after New York City Comptroller Mark Levine said in January that the city may resume purchasing Israel Bonds, despite the city having divested from them in 2024. Mayor Zohran Mamdani has publicly supported divestment from Israel in relation to the war on Ga-za and revoked an executive order issued by former mayor Eric Adams that had restricted city agencies from boycotting or divesting from Israel. Dawn said it sent letters to Governor Kathy Hochul, Attorney General Letitia James, the mayor, and city and state comptrollers calling for a halt to new purchases, rollovers, or subscriptions of Israel Bonds and requesting the publication of a policy prohibiting further investment.

Dawn argued that Israeli government bonds function as direct loans to the state and warned that continued investment could expose taxpayers to legal, financial, and reputational risks. The group cited findings by the United Nations that described Israel’s war on Ga-za as a genocide and noted that Israeli Prime Minister Benjamin Netanyahu is subject to an arrest warrant from the International Criminal Court. Moody’s credit agency has also warned that Israeli bonds are becoming an increasingly risky investment. Officials from the New York City mayor’s office and the comptroller’s office did not respond to requests for comment by the time of publication.