Published On: Fri, Aug 22nd, 2014

Leftist Magazine: California Now Israel’s Biggest Source of Support, Both in Politics and Capital Investments

Israeli Prime Minister Netanyahu Meets With California Gov. Jerry Brown In San Francisco

In 2012, U.S. investors held a $19.7 billion stake in Israel’s economy, reports CounterPunch, a radical-leftist magazine founded by the late Alexander Cockburn.

In addition, in 2012, Corporations registered in the Cayman Islands, where thousands of American investors keep their offshore funds, owned another $8.6 billion of Israel’s economy.

And, according to the Organization for Economic Cooperation and Development (OECD) Israel received $1.846 billion in direct investment from U.S. investors in 2012, the most recent year for which statistics are available.

The amount of support of for Israel’s economy originating from Silicon Valley’s private equity firms is especially large, according to CounterPunch.

The California-Israel Chamber of Commerce, in Sunnyvale, is funded by Silicon Valley investors, corporations and law firms including Intel, Paypal, Silicon Valley Bank, and Morrison Foerster, and executives from these companies sit on the Chamber’s board of directors. Israel’s General Consul in San Francisco, Andy David, is a board member, as is the president of Silicon Valley Bank.

In 2001, during the Second Intifada, Sequoia Capital Partners, a private equity company headquartered in Menlo Park, raised $150 million to invest in Israeli technology companies, according to CounterPunch.

Last year, the same Sequoia raised its fifth Israel-dedicated fund, to the tune of $215 million. Since 1999, Sequoia Capital has invested better than $789 million in Israel’s software and electronics industries.

Sequoia Capital’s investors in California include the J. Paul Getty Trust, and the Gordon and Betty Moore Foundation.

Accel Venture Partners, another Silicon Valley private equity, also started investing in Israeli startups in 2001. By 2007, Accel invested more than $200 million in 20 Israeli companies. Last March, Accel successfully raised $475 million for a fund supporting Israeli tech companies.

Billions flow from California’s Bay Area into Israel to support chip manufacturers, Internet startups, and telecommunications companies, CounterPunch sums its report.

Many Silicon Valley venture capital firms have set up offices in Israel. California investors like the town of Herzliya Pituach best, just north of Tel Aviv. It is one of the wealthiest Israeli towns, home to many of the country’s financial elite. Bessemer Venture Partners’ Israel office stands close to the local Marina, and beachfront homes. Sequoia Venture Partners has an office in nearby Ramat Yam, in a high-riser overlooking the Mediterranean Sea.

In March 2014 California Governor Jerry Brown signed a memorandum of understanding with Israeli Prime Minister Benjamin Netanyahu, to promote economic links between California and Israel. On the same trip, Netanyahu visited Apple’s Cupertino headquarters where he was ushered into the executive board room for a chat with the company’s leaders. He also toured Stanford University.

California assembly member Bob Blumenfield, now a Los Angeles city council member, had been pushing for the agreement.

Blumenfield recently got LA Mayor Eric Garcetti, to make a public statement in support of Israel. Mayor Garcetti called Israel “our strongest ally in a tumultuous region.”

“We stand with Israel against a Hamas regime that terrorizes Israelis from the skies and now, from beneath the ground, ” Blumenfield told a supportive public.

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