BUSINESS

`Good for You, Good for Israel'

How much interest should there be in State of Israel Bonds?

JAY LECHTMAN
and RON OSTROFF

Special to The Jewish News

I

represent the firm of
Abraham, Isaac and
Jacob," George Frankens-
tein says in his sales pitch
urging Jewish groups to buy
Israel Bonds. "It's the oldest
firm in the world.
"It's one of the very few
firms that is still a partner-
ship. And the Jewish people
are the partners. The reason
that Abraham, Isaac and
Jacob rate these bonds AAA
is that they have the full
faith and credit of the Jew-
ish people behind them."
Investing in the Jewish
State can be more than put-
ting a few coins in a pushke.
Promoting Israel through
direct investments can be
profitable. And State of
Israel Bonds are a secure
way to show support.
The bonds are, in the
words of its organization,
"good for you and good for
Israel."
For Israel, the bonds are a
vital source of foreign in-
vestment capital, with more
than $11 billion raised for
the Jewish state since the
program's founding in 1951.
Bond proceeds have large-
ly gone toward building
Israel's economic infrastruc-
ture, from roads and rail
lines to ports and power
• plants.
In 1990, the Development
Corporation For Israel (DCI),
the national Israel Bonds
organization, began selling
Infrastructure and Absorp-
tion bonds, to help fund
Soviet resettlement and
retraining. But now, with
the unprecedented influx of
Soviet Jews, all Israeli bond
proceeds are used to those
ends.
"After olim are brought to
Israel, the major problem
confronting Israel will be
jobs, jobs, jobs," said David
Hermelin, international
campaign chairman for
State of Israel bonds. "Israel
bonds can provide those
jobs."
The goal is to raise an ad-
ditional $45 billion to help

Jay Lechtman is a staff
reporter and Ron Ostroff is
editorial coordinator for the
Baltimore Jewish Times.

Artwork from Newsday by Anthony D'Adamo. Copyright. 1990, Newsday. Distributed by Los Angeles Times Syndicate.

pay for building an an-
ticipated 500,000 new hous-
ing units, and creating some
300,000 new jobs over the
next five years, according to
Israel Bond Organization
reports.
Previously, said Hershell
Wais, Israel Bond's ex-
ecutive director for Mich-
igan, money from bonds was
used for all aspects of the
country's economic devel-
opment from expansion of
the deep water port of Haifa
to high technology.
"Now everything has been
going for the creation of jobs
and housing for Soviets, E-
thiopians and all other im-
migrants," Mr. Wais said.
The bonds, or securities,
are, in effect, loans to the
Israeli government, which in
most cases pays the bond
holder for the privilege of us-
ing the money for a specified
amount of time. At the end
of that time, ranging from
five to 15 years, Israel
repays the original bond
amount, or principal.
"Israel bonds are more
than good, sound invest-
ments," Mr. Wais said. "It is

an investment in Israel, an
investment in the destiny of
the Jewish people."
But some warn in-
vestments should be made
with one's head rather than
one's heart.

Alan Kanter, a pension
and profit-sharing consul-
tant from Baltimore, said, "I

"It's a great
investment. You do
a mitzvah, you get
7.5 percent
interest and you
get your money
back."

George Frankenstein

am a supporter of State of
Israel bonds — I have them
in my own retirement port-
folio. But No. 1, they have to
be a good investment,
regardless of what one
feels."
Mr. Kanter said slightly
fewer than 10 percent of his
customers include Israel

bonds in their retirement
plans.
One local broker, David
Kaplan, vice president of the
private client group for the
Farmington Hills office of
Merrill Lynch, said several
of his clients have requested
bond purchases after going
to a fund-raiser.
"They never ask me if they
should invest in a bond. I
have never recommended
them," Mr. Kaplan said. "I
guarantee there are better
investments. I'd rather own
General Motors Acceptance
Corp. domestic than an
Israel bond. But that is not
why they buy them. They do
so because of their commit-
ment to Israel."
Mr. Frankenstein, chair-
man of the Israel Bonds
campaign in Northern
California, said he targets
individuals and businesses
for bond sales.
"I would tell a local bank
you should do it because it is
a good investment. And also
because 30 to 40 percent of
their clientele is Jewish," he
said.
The San Francisco-based

vice president of the securi-
ties firm of Donaldson,
Lufkin & Jenrette, said
other targets are companies
that have Jewish in-
volvement or Jewish leader-
ship, such as some major
high technology companies
in California's Silicon
Valley that have plants in
Israel.
"It's almost necessary that
they have some connection
or interest in Israel," Mr.
Frankenstein said. "We are
targeting Sam Friedman,
not John O'Shea. You do a
mitzvah, you get 7.5 percent
interest and you get your
money back."
But during the recession,
contributors to charities are
tighter with their dollars. So
Mr. Frankenstein goes after
what he calls "free dollars."
He urges Israel Bonds as
investments through the
millions upon millions of
dollars tied up in individual
retirement accounts (IRAs),
profit sharing plans and
pension plans.
"Those dollars are not
available for charitable giv-
ing," Mr. Frankenstein said.

THE DETROIT JEWISH NEWS

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