For months, activists have been flooding county council meetings in Cuyahoga and Summit counties calling on the bodies to stop investments in foreign bonds. While both councils initially appeared open to the idea, each has since backed away from supporting it.
This stems from issues some people have with the way the Israeli government has treated Palestinians, which has come to a head since the Israel-Hamas War started in 2023. Activists say that by counties investing in Israel Bonds, they are supporting violence against Palestinians. The Boycott, Divestment and Sanctions movement – which has been calling on governments, companies and people to economically sanction Israel - started in the early 2000s, according to its website. Ohio passed a law against this movement in 2017.
Calls to cease foreign investments
Activists like Matthew Charlebois with the Akron unit of the Party for Socialism and Liberation, a group that believes in a socialist transformation of society, say they don’t want counties to divest or pull their money out of Israel bonds. They want counties to not make any investments in the future in any foreign bonds.
“We’re not being discriminatory against any one particular country," he said. "We want investments in locally, municipal bonds, and we don’t want investments in any foreign country.”
Initially, it looked like county councils might agree with what activists were saying. Cuyahoga County Council actually brought forth a resolution this summer to cease investments in Israel Bonds, and a Summit County council member said around the same time that they weren’t looking to invest in more Israel Bonds in the future.
But ultimately, that didn't happen in either county.
“Our position is that it contradicts the Ohio Revised Code," Mike Migden, the chief of staff at the Summit County Fiscal Office, said.
Since the Ohio Revised Code gives county fiscal offices the ability to invest in foreign bonds, they can’t make any promises that they won’t, he said. This stance is confusing to activists like Charlebois.
“They have no other choice but to continue invest in Israel with Summit County money?," he said. "Like I’m trying to understand – you’re legally obliged to keep putting money in a foreign country?”
What does the Ohio Revised Code say
It is true that state law gives county fiscal offices the power to invest in foreign bonds that meet certain criteria laid out by the state, but it’s up for debate whether fiscal offices can choose not to do that. It proved difficult to get an answer to this question. Requests for more information on this got bounced from the Ohio Treasurer’s office to the Ohio Auditor’s office to the Ohio Attorney General’s office.
Attorney General Dave Yost did previously weigh in on this matter, causing Cuyahoga County Council to withdraw its resolution on Israel Bonds.
"As you are undoubtedly aware, the State of Ohio has expressly prohibited government actors from boycotting, directly or indirectly, any jurisdiction with whom the this state can enjoy open trade," he wrote. "This includes the Nation of Israel."
But Terry Lodge, a Toledo-based attorney, disagrees and wrote an opposing legal analysis to Yost’s.
“So the law isn’t aimed at circumstances where a local government is exercising discretion deciding what it’s investment policy should be," he said.
Although Yost doesn’t threaten legal action in the letter, that’s certainly the concern county’s have if they were to go ahead and pass legislation that opposes Yost’s viewpoint, Lodge said.
Investments in Israel bonds
Activists have also questioned if Israel bonds are even a good investment for the counties to make.
"It was a viable yield. The interest rate was positive," Midgen said. "We determined it was a good investment for our investment income purposes and that it was a, at that time, a sound investment."
But emails requested by Ideastream Public Media show Meeder Investment Management, an investment company, telling Summit County's fiscal office in November, after the Israel-Hamas War had started, that they are not recommending further investment in Israel Bonds. Jim McCourt, director of advisory services at the firm, referenced credit rating companies stating a planned judicial overhaul in Israel could weaken its credit profile.
"While no credit action has occurred yet, we are hesitant to buy illiquid securities in the face of a potential credit downgrade," he wrote.
A pros and cons list from the county's fiscal office shows that the ongoing Israel-Hamas War was on the mind as well. "Would demonstrate continuing support for our Jewish citizens" is listed as a pro of further investing in Israel bonds. "If the war goes on indefinitely, the rating agencies could reduce their ratings" and "We need to be prepared for political attention that could be paid to our investment" are listed as cons.
"I find it very odd that they're acting now like this is the first time - or they're kind of surprised with the level of attention it's getting," Charlebois said.
The war did end up influencing the ratings of Israel bonds by credit rating agencies but not before Summit County further invested $2 million.
"I believe Moody's [Ratings] downgraded the bonds on Feb. 19, and Standard and Poors [Global Rating] downgraded the bonds on April 19," Midgen said. "But at the time on Feb. 1, the bonds were not downgraded by either of those agencies."
Moody's downgraded Israel Bonds due to the ongoing war with Hamas, while S&P cited the risk of military escalation with Iran.
"Call his bluff"
The issue could be cleared up by the Ohiolegislature, both Migden and Lodge said, but there’s not going to be an appetite to reverse on this legislation. The only path forward is for one of these local governments to test Yost, Lodge said.
“The problem is is that until someone in a local government calls his bluff and goes ahead and makes this decision and let’s see if the AG’s office actually files suit, you’re not going to have any legalistic kind of resolution," he said.
Lodge is confident that if this does end up in the courts, they would rule in favor of local governments making this decision, Lodge said.
