Israel Junk Bonds
Florida’s Billion-Dollar Giveaway? How Junk Bonds for Israel Became a Taxpayer-Funded Gamble
By DFWSAS · October 2025
Imagine your local government taking your tax dollars and tossing them into a risky bet on a foreign country’s shaky economy—sounds like a wild pitch, right? Yet, that’s exactly what Florida, led by several county officials and Palm Beach County in particular, is doing with massive investments in Israeli bonds. These aren’t your grandma’s safe treasury notes; they’re increasingly “junk” status securities, and Florida jurisdictions are using public money to buy them in bulk. Here’s why this billion-dollar move looks less like investing and more like a high-stakes giveaway wrapped in politics and Palm Beach intrigue.
Florida’s Junk Bond Bonanza
Since the Israel–Hamas war began on October 7, 2023, U.S. state and local governments have poured large sums into Israeli government bonds. Florida alone has bought between roughly $1.25–$1.3 billion of these bonds — more than most states. The state treasury under Chief Financial Officer Jimmy Patronis holds several hundred million dollars and points to yields near 5% as a taxpayer win. But at the local level counties and municipalities have been the outliers, moving surplus cash (property taxes, fees, etc.) into Israeli debt.
Why it feels like a giveaway: Many of these securities were once highly rated but have faced downgrades and growing downside risk as war costs and a widening deficit strain Israel’s finances. When a bond’s rating slips toward “junk,” the investment becomes higher-risk — in plain terms, it’s like lending money to a friend who’s maxed out their credit cards. Critics argue Florida’s purchases read more like “take our cash, no questions asked.”
Palm Beach County: The $700 Million Sugar Daddy
Palm Beach County stands out. Clerk/Comptroller Joseph Abruzzo increased his holdings from roughly $40 million pre-war to a world-record position of about $700 million — roughly 15–16% of the county’s multi-billion dollar portfolio. Abruzzo has touted the interest income (an estimated tens of millions a year) as taxpayer benefit, while opponents call the concentration reckless.
Why it feels like a giveaway: Palm Beach’s bonds are often locked for 2–3 years. If Israel’s economic strain deepens or markets sour, Palm Beach could see sustained losses that would otherwise plug real local gaps — think the county’s budget shortfalls, housing needs, or other public services. Rather than diversifying conservative funds, the county concentrated them — and that concentration makes the move look politically motivated, not prudently financial.
The Law That Locked In the Purchases
When bond ratings weakened, typical public-fund rules that discourage chasing risky foreign securities should have prevented aggressive purchases. But in April 2025 the Florida Legislature passed (and Gov. Ron DeSantis signed) HB 669, effective July 1, 2025 — a law that prohibits local governments from imposing minimum bond-rating requirements in certain circumstances for Israeli bonds. The result: Israeli bonds gained a carve-out that lets public entities buy them even if they’re unrated or sub-investment grade.
Why it feels like a giveaway: The law effectively substitutes politics for prudence. Rather than shielding taxpayers from foreign credit risk, the statute instructs public funds to continue buying this one country’s debt — a scenario that critics say replaces fiduciary caution with political loyalty. Already, lawsuits have been filed challenging some of the purchases as a breach of fiduciary duty.
Palm Beach’s Epstein–Trump Shadow
The optics complicate the finance story. Palm Beach County is the same place tied to the Jeffrey Epstein trafficking investigation and high-society intrigue around Mar-a-Lago and Donald Trump. The county is now moving hundreds of millions into geopolitically charged bonds while naming local streets after national political figures and still sorting through scandals from the Epstein era.
Why it feels like a giveaway: In a county where elite scandals and political theater are part of the backdrop, critics see taxpayer money being funneled into international politics rather than local priorities — a move that, if it goes wrong, will leave residents to shoulder the consequences.
The Bottom Line
Florida’s Israeli bond spree — and Palm Beach County’s $700 million concentration in particular — looks less like disciplined public investing and more like a taxpayer-funded gift to a geopolitically charged cause. With warning signs from bond agencies, a state law that carved out exemptions, and a county that concentrated a huge share of its portfolio, the setup reads as a risky transfer of public capital to foreign debt in a time of war.
What do you think? Is Florida playing a savvy long game, or is this a reckless giveaway dressed up as an investment?
If you want a different version (shorter/snarier/more data and numbers, or less emphasis on the Epstein/Trump context), say the word and I’ll reformat it.
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