A Palm Beach County judge dismissed a taxpayer lawsuit that challenged the county’s $1 billion investment in Israeli bonds.
Circuit Court Judge Glenn Kelley ruled that the three unidentified Palestinian-American county residents, who sued last October, lacked legal merits to bring a case against Palm Beach County Clerk and Comptroller Mike Caruso.
The residents claimed a psychological toll because the investments funded Israeli military action that ultimately killed and displaced their family members living in Gaza. Kelley expressed sympathy for residents with family members affected in either Israel or Gaza, but he ruled that was not sufficient grounds for a taxpayer suit.
“It is speculative to find a causal link between the investments at issue and the death of family members or loved ones in Gaza,” Kelley wrote in his July 22 opinion.
In a statement, Caruso said he agreed with the judge’s dismissal.
“As we’ve maintained from the start, the Clerk’s management of Palm Beach County’s investment portfolio is focused on three primary objectives: Protecting taxpayer money, providing for liquidity of funds and earning a market rate of return,” he wrote.
Attorneys for the litigants, Sunny Osment and David Pina, said the judicial branch failed to serve as a check on Caruso.
“We believe that Palm Beach County is using taxpayer dollars for corrupt purposes that do not benefit Palm Beach County constituents, in direct violation of the Florida Constitution,” they wrote in a statement.
They said they are “exploring an appeal” with their clients.
Once considered snooze-worthy, how public universities and state and local governments invest their funds are now fierce topics of debate, since Hamas first attacked Israel on Oct. 7, 2023. Approximately 1,200 Israelis were killed that day, most of whom were civilians. Israel’s wartime response has resulted in the killings of over 73,000 Palestinians, including civilians, journalists and humanitarian workers, according to Gaza's Health Ministry.
Joe Abruzzo, the current county manager, served as clerk when Israel was attacked three years ago. In the ensuing five months, Abruzzo boosted the county’s investment of Israeli bonds five times.
“The truth of the matter is there could be no greater time we could invest in the state of Israel,” Abruzzo announced at a Boca Raton synagogue on Oct. 31, 2023. “The treasury of Israel needs this money. We’re proud to make this investment, proud to stand with Israel.”
Despite that and other statements, Abruzzo and his successor, Caruso, both maintain the primary reason for the investments was the bonds’ favorable returns. Earlier this year, Caruso announced the investments reached $1 billion, boasting that it was "the most significant investment in Israel Bonds of any investor in the world."
'Political' investments?
The investments were risky, according to the Palestinian-American litigants, considering Israel’s bond ratings were downgraded during the period of Abruzzo’s investments. They also represent roughly 20% of the county’s total portfolio; the lawsuit notes the county’s investment policy requires portfolios to be diversified.
The residents alleged the clerk’s office violated taxpayer law and county investment policy by using their taxpayer funds when “the dominant and primary purpose of the investments was political,” according to the suit.
Kelley, however, took issue with that.
The clerk’s office used surplus county tax dollars, and not money allocated for operations, to invest in Israel, which makes the residents’ argument obsolete, according to Kelley.
“That distinction is not without significance here, where the County’s taxpayers were not levied in order to purchase Israel Bonds,” he wrote, “The County purchased Bonds with surplus taxes.”
