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Bonds Launches an Emergency Drive Because of Uncertainty over Loans

March 11, 1992
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State of Israel Bonds launched a $100 million emergency bond sales drive in response to uncertainty over whether Israel will be able to secure U.S. loan guarantees for $10 billion.

The money would be used to help compensate Israel for the higher interest it would have to pay if the United States does not underwrite the loans needed to absorb an estimated 1 million new immigrants over the next five years.

Michael Siegal, Israel Bonds’ national cam paign chairman, said at a news conference Monday that without the United States co-signing Israel’s loan, it would cost the Jewish state an extra 2 percent, or $200 million, over five years.

“Bonds will do it,” Siegal pledged, meaning it would raise the money to cover the difference. “We have the capacity. There will be no problem in appealing to the marketplace to raise the money,” he said.

Siegal cited Israeli Housing Minister Ariel Sharon, who said last week that Israel should pursue alternatives rather than capitulate to the Bush administration’s demand that Israel freeze the construction of new settlements in the West Bank in return for the loan guarantees.

“We are that other alternative,” Siegal declared.


Joel Tauber, soon to be installed as the United Jewish Appeal’s national chairman, said last week that there was “no way” his organization could make up for a loss of the American loan guarantees.

“No way is it possible to replace the $10 billion,” he said. “It’s just not there.”

But Siegal has faith in the emergency sales effort. He pointed out that $200 million in bonds have already been sold this year and that the goal is to sell $1.5 billion by Dec. 31.

Last year, $990 million worth of Israeli bonds were sold.

Siegal said he is optimistic the $1.5 billion goal will be achieved because Israeli bonds are financially attractive. The most popular denomination, $25,000, now pays a rate of return of 7.5 percent.

The interest is paid biannually and the bonds bought by retirement funds can be redeemed after three years.

Siegal said there are $4 billion in retirement funds invested each year in the United States and that Israeli bonds’ rate of return makes it a very attractive investment.


Another reason the bonds are expected to sell well is that the money raised will be used to resettle immigrants from the former Soviet Union and Ethiopia.

Israel Bonds President Meir Rosenne said all the money invested in Israeli bonds is used to build housing and infrastructure for the immigrants and to find them jobs.

“Since 1951, Israel Bonds has raised more than $12 billion for the economic infrastructure of Israel and paid back close to $7 billion,” said Rosenne, former Israeli ambassador to the United States. “The need for bonds is now more important because of the large influx of immigrants.

“We want to make sure Jews don’t go into the garbage looking for food and asking for handouts.”

Rosenne added that 40 percent of the 350,000 immigrants who have arrived since 1989 are not working in the profession for which they were trained in the former Soviet Union.

Elie Wiesel, the Nobel laureate and author who was an early advocate on behalf of Soviet Jewry, told reporters that “nothing can be more important for anybody but to save human life. To save Russian Jews is a priority. The fact that some of them are hungry shames me.

“I literally feel ashamed that Russian Jews in Israel should need handouts. They act like beggars, and if they are beggars it’s our fault. What is happening to our people, to humankind, all those men and women who usually respond to those who are hungry? When human rights and human dignity are at stake, money shouldn’t matter.”

Asked why this week was chosen for the emergency drive, Siegal said that a spark was needed to bring the American community out of the lethargy generated by the “negative press regarding the loan guarantees and the peace process.”

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