In a major victory for state employees, pensioners and activists for justice in Palestine who have pressured the SBI to divest from Israel Bonds for more than a decade, the SBI has partially conceded to that demand by divesting from almost all of its Israel Bond holdings.
Israel Bonds are a direct loan to an Israeli state with a history of ethnic cleansing, occupation, and apartheid. State employees have been very clear – they do not want their pensions used to support these violations of international law and human rights.
Abir Ismail, a Math teacher and member of the Minneapolis Federation of Teachers:
‘From Gaza to Jenin, from Hebron to Jerusalem, Palestinians live under constant occupation. Families are forcibly removed from their homes. Children are systematically deprived of food and water. Schools, hospitals, and neighborhoods are demolished. Our pensions are currently supporting the state responsible for this cruelty. As an educator I refuse to be complicit. Public money must reflect our values, our humanity, and our care for children everywhere.’
Reflecting a massive change in popular opinion, 76% of Democrats support a ban on extending credit to Israel through the purchase of Israel Bonds
Against this backdrop, a member of the MN BDS Community submitted a data practices request in early 2025 requiring the SBI to provide the history of its trades in Israel Bonds. Forced to do so, the SBI finally released all of its Israel Bond transactions dating back to 2009.
That history is revealing:
- At its peak in December of 2020, the SBI held at minimum $13.3 million of Israel bonds.
- Since then, the SBI has sold all the Israel Bonds except one for $470,000.
- In July 2025 a $10 million bond matured. The SBI chose not to reinvest.
- All other bonds purchased between 2021 and 2023 were sold at a loss totaling more than $830,000.
Community opposition — notably including public workers with pensions managed by the SBI — demanded divestment in private meetings, at public events, in testimony before the SBI, at large rallies and in civil disobedience.
In response to community demands that it divest from Israel Bonds, SBI members repeatedly defended their inaction by stating they could not do so because they must uphold their fiduciary responsibilities.
Yet, during this same period Moody’s rating service had downgraded the Israeli government’s credit worthiness twice, the second time to a level one grade above speculative investments. In addition, Moody’s characterized Israel’s future outlook as negative.
Speaking for the MN BDS Community, Karen Schraufnagel, a financial analyst by trade with a degree in economics, summed it up this way, ‘While the SBI was losing money on these investments, they continued to argue publicly that fiduciary responsibility required them to make and hold these investments. The revelation of substantial and repeated losses seems to indicate that buying and holding these bonds was never about fiduciary responsibility!’
Since the protests at the quarterly SBI meeting in August 2024, the SBI has rescheduled its required quarterly meetings multiple times and moved to a hybrid format that shielded members of the board from hearing testimony directly from pensioners and community members.
The testimonies they chose not to hear included urgent calls by the people whose savings the SBI manages and community members to end its complicity with Israel’s violations of international law and human rights. Some of those same people spoke at Monday’s press conference.
Lucia Smith, who receives a pension through Teachers Retirement Association:
“I don’t think I’ve ever met an educator pensioner who thinks it’s okay for Israel – or any other country – to isolate and persecute a people and to traumatize and kill children. People who work on a daily basis with young children and teenagers treasure those precious human lives. We don’t want our pension income tied to immoral activity.’
This unwillingness to meet in person with people advocating for divestment and to listen to their demands extended beyond the quarterly SBI meetings:
Sana Wazwaz, a member of American Muslims for Palestine, and a member of the Palestinian families delegation expressed her outrage:
’Governor Walz’ outright refusal to meet with Palestinian families in MN–while securing multiple meetings with Jewish constituents, signals blatant hypocrisy and cowardice. We ask that Walz makes his support for Palestinian human rights and divestment public, and that he takes steps to listen to his Palestinian constituents.”
Faced with both intense pressure from the community, and the reality that Israel bonds were a poor and risky investment, the SBI began, behind the scenes, steadily divesting from Israel Bonds. This was a huge victory for all those who have taken part in the divestment campaign and a source of hope for others in the broader divestment movement.
But Israel Bonds are just the start. According to one analysis of the SBI’s portfolio, it still holds about $5.6 billion of assets in companies identified by many, including the UN Special Rapporteur on the occupied Palestiniain territories, to be directly aiding and profiting from Israel’s genocide in Gaza.
Fresh from this Israel Bond divestment victory, grassroots organizers are gearing up for the next struggle:
Michael Yost, a member of the Minnesota Association of Professional Employees union (MAPE) captured the upcoming stage of this struggle, “I welcome the news that the SBI has sold many of its Israel bonds, but it’s not enough. The Board must adopt a comprehensive human rights standard for its investments, and get our pension dollars out of the business of war and genocide for good.”
Additional quotes from speakers:
Barry Kleider, a member of Jewish Voice for Peace – Twin Cities:
The people of Minnesota are telling the world we do not condone Israel’s genocidal conduct in Gaza. That we will not use collective execution or land theft to grow our retirement fund. That our money will not be used to drop bombs on sleeping children. And we will not earn dividends from mass starvation.
Sima Shakhsari, an associate professor in the department of Gender, Women, and Sexuality Studies at UMN said, ‘As a faculty member and a member of UMN Educators for Justice in Palestine, I am disgusted that our pensions are invested in the genocidal state of Israel. However, the activists who have succeeded in pushing the SBI to divest from Israeli bonds at the state level give us hope that we too can make the University of Minnesota divest from Israel.’
Chelsea Sondeland, speaking for the Anti-War Committee, ‘We at the Anti-War Committee feel victorious about this win but the fight is not over. We call on the Palestine solidarity movement to seize this moment, sharpen our demands and fight for complete divestment from apartheid Israel – just like Minnesota did with apartheid South Africa.’
