Dear Honorable Governor John Hickenlooper:
I have just learned, sadly, that you signed into law SB13-176, ostensibly to allow the Colorado State treasury to invest taxpayer money in Israeli bonds. This law will harm Colorado’s hard working citizens, including a half million state employees and retirees. About half our states now have similar laws resulting from a foreign lobby at work behind the scenes in our legislatures.
At the very time when astute investors are fleeing from risk bond investment, you have endorsed a scheme to sell Israel’s debt to taxpayers. This bill has the effect of encouraging investment in bonds that are rated only a little higher than “junk bonds.” For good reason, the State of Colorado is not allowed to issue debt; why would you legitimize the purchase of another country’s indebtedness, knowing that that country already owes some $34 billion abroad (according to its bond salesmen)?
The law you signed gives a foreign government an open door to siphon money out of the pockets of the people who live in the state of Colorado directly into the bonds of a country that uses that money to run a perpetual war machine. It forces Colorado citizens to support Israel’s warmongering and pay for its costs without their consent.
I don’t think this is what Coloradans want done with their pension plans and IRA’s. Those that do can make their own contributions to Israel, without forcing those of us who want our dollars used for peaceful purposes to participate.
Under the “Investment of State Money-Limitations” placed on the State Treasury by Colorado Article 36: 24-36-113, even with your blessing, the State Treasurer is breaking the present law if he invests one dollar in an Israeli issued bond. So why pass the bill?
The obvious agenda of Israel bond salesmen is to get local U.S. politicians to legitimize using the long term billions in state and city employee pension funds, as well as private investors not restricted by Article 36, who can be influenced by a law such as you just passed, to enable Israel to circumvent its own poor credit status,
Colorado is not the first state to be duped in this way; Israel’s history is well-known, but not well-publicized. I have written and sent to you and to legislators three papers in which I described Israel’s abysmal credit history and how unwise and unfair it would be to invest Colorado citizens’ money in either Shekel denominated or quasi-counterfeit Dollar denominated (“I-Dollar”) Israeli bonds. Why is Israel selling bonds payable in our currency, instead of their own? (1)
Israel’s own Shekel bonds bear the stench of two past “devaluations”, the banana republic way of defaulting on debts! Rating agencies, including Standard and Poor, do not rate foreign issued bonds, as the sponsors of this bill claimed. They rank currency issued by foreign governments based on the country’s history and the rater’s guess as to the likelihood that the currency will be “devalued.”
Standard and Poor rates the New Israeli Shekel (NIS) “A+” – and this sounds like a great grade, but AAA is the highest. A+ is five notches down from the highest S&P rating and three notches down from the lowest rating the Colorado State Treasure is allowed to buy!
Incidentally, Standard and Poor is currently being sued by the Justice Department for fraud to the tune of $5 billion, for selling high ratings to bad securities during the real estate bust of six years ago.
So why did the Colorado legislature pass, and why did you sign, this bill, if the treasurer is already forbidden to buy the bonds? Senator Mark Scheffel gave every answer but the truth, which is this: “The Israel Lobby told me to sponsor it.” Neither Senator Scheffel nor sponsoring Representatives Everett and Williams, nor any of those who supposedly represent us, admitted this. And the lobbies were by their side during the committee hearings.
What is the real risk in Israeli investment, especially in I-Dollar bonds? For comparison, Israel’s A+ rating is only three notches above Mexico, and it’s five notches below Norway. Israel and Mexico both have records of multiple devaluations that cost investors and bank account owners dearly. Israel’s bad credit history has even been referenced by the Israeli newspaper, Haaretz in Requiem of the Shekel. (2)
Israel is selling bonds repayable in dollars, but it cannot print dollars, so Israel must sell a new bond to pay off each old one that matures — a classic Ponzi scheme. When the outstanding amount exceeds the volume of new bonds sale, default will be Israel’s most advantageous course to take . And buyers have no legal way to collect against a foreign sovereign state. Israel can default at will and walk.
Every Ponzi scheme relies on a big lie to sell it. The Israeli bond sellers’ lobby and the House sponsors of this bill have repeatedly misled legislators by stating “Israel has never defaulted on an interest or principal payment.” But while Israel may have sent out checks when due, it is now on its third currency, the first two of which were devalued to worthless, the latest being the Old Shekel in 1985. This means that investors got checks, but the stamps on the envelopes were worth more than the checks inside..
SB13-176 is part of an international scheme to fund a militaristic foreign state. The fiscally irresponsible legislature shows the pressure from Israel’s lobbies, and seems unable to recognize a counterfeiting scheme. They, like you, failed to study this bill or listen to the recorded testimony given by myself and others; each of my papers was sent to your attention, but there was no response from you or your staff.
Among the first victims of this bill will be some 500,000 Colorado Public Employee Retirement Association members (PERA), which has already admitted to purchasing Israeli bonds with its retirement funds. Other victims will be the middle class folks who invest in managed IRA‘s, and a host of individuals who misguidedly buy I Dollar bonds because the legislature and the Governor have put their endorsement on them.
All are lured by a Madoff-like promise of double the interest paid by U.S., UK, or Canada bonds, all rated AAA.
This issue must not be allowed to go away, nor can it go away, for Israel has set up 25 sales offices in the United States to sell I-Dollar Bonds, and now boasts that some $48 billion are outstanding, plus about $50 billion in Shekel bonds issued onshore. How long before it will not be able to pay this ballooning debt?
It would take a little courage for you to reverse yourself on this bill, but in the long run politicians are forgiven for their mistakes. This is a moral issue, thou shall not help those who steal. Please call for a bill to repeal SB13-176.
Charles E. Carlson
(1) Carlson, background Stories:
“Exposing the Israeli Dollar Bond Scheme, Deliver Palestine from Occupation, April 19, 2013,” “A Small Country Big Trouble, Not Cyprus, Israel,” March 24, 2013,
“New Laws Allow States To Buy Israeli Issued, US Securities,” March 2, 2013,
(2) “Requiem For The Shekel,” Haaretz Israel, 2012.