Illinois Treasurer Frerichs Defends $100 Million Israel Bond Investment Amid Senate Scrutiny Over Foreign Bonds

State Treasurer Defends Foreign Bond Holdings During Contentious Budget Hearing

SPRINGFIELD — Illinois State Treasurer Michael Frerichs stood before lawmakers Wednesday and defended the state's $100 million investment in Israeli government bonds during a tense Senate Appropriations Committee hearing.

Sen. Rachel Ventura, D-Joliet, who chairs the Human Rights Committee, pressed Frerichs on whether Illinois state funds invested in Israeli bonds could be linked to international conflicts with human rights concerns.

My job is not to engage in foreign policy. My job is to maximize returns, Frerichs said during the hearing, emphasizing his role as a fiduciary rather than a policy maker.

Frerichs explained that current Illinois investments in foreign bonds have been standard practice for the past 20 years. He noted that state statute allows for the Treasury to invest up to three quarters of 1% of the state portfolio into foreign bonds.

We invest in Israel bonds, $100 million, Frerichs said, adding that any investments made by the state must meet criteria set in state law.

The hearing took place as lawmakers faced an end-of-week deadline to advance bills out of the chamber. While revenue collections exceeded expectations for the current budget year, other matters brought up during testimony turned contentious.

Record Unclaimed Property Returns Offset Foreign Investment Debate

Amid the foreign investment debate, Frerichs also highlighted his office's record achievements in returning unclaimed property to Illinois residents.

Our office made a record $2.5 billion in investment earnings for state and local governments in fiscal year 2025, Frerichs said.

He further discussed broader efforts to bring value to the state, including more than $2.4 billion in unclaimed property returned to Illinois residents since 2015.

The Treasurer's office also announced it has returned over $2.5 billion in missing money through the state's I-Cash program since he took office in 2015. The program safeguards forgotten bank accounts, uncashed checks, unpaid life insurance claims, and more.

A recent highlight was the return of $440,000 from the estate of Joseph and Emilia Maldonado to St. Jude Children's Research Hospital. The return of these funds helped push the total past $2.5 billion in unclaimed property.

Frerichs also reformed life insurance payouts, resulting in over $500 million being paid directly to beneficiaries after audits found companies withholding death benefits. The Enhanced Money Match program has automatically returned more than $130 million to 870,000 people since 2018.

State Employee Healthcare Costs Under Scrutiny

Lawmakers also raised concerns about rising healthcare costs for state employees, which are expected to rise up to 9% next year. Sen. Chapin Rose, R-Mahomet, questioned whether the state is adequately evaluating the effectiveness of its spending.

It's breaking the bank… it's starting to become a significant issue, Rose said.

Officials acknowledged the complexity of measuring cost savings tied to improved health outcomes. They said current efforts are focused on improving care and managing long-term risk.

Hiring Improvements Reported

Officials from Central Management Services pointed to improvements in state operations, including a growing workforce and faster hiring timelines.

Illinois now employs nearly 57,000 workers — the highest level since 2007 — while vacancy rates and hiring delays have declined in recent years.

We have reduced the average time to hire from 269 days to approximately 93 days today, Director Raven DeVaughn told lawmakers, describing a significant improvement in addressing longstanding staffing challenges.

Budget Process Moves Toward May Deadline

The main task for lawmakers and the governor remains passing a new budget before adjourning the spring session at the end of May. Behind-the-scenes budget negotiations are taking place involving the General Assembly and the governor's office.

Many agreements are already in place. There are also revenue enhancements proposed — including items like a social media tax and sales tax changes — that are expected to impact future revenue growth.

Both the governor's budget office and the Commission on Government Forecasting and Accountability will release more revenue estimates prior to lawmakers wrapping up their work.

Uncertainty over energy costs, foreign conflicts, tariffs and the overall economy will be taken into account. But for those waiting to see how they'll fare in the new budget, the final plan likely won't be released until shortly before it comes up for a vote next month.