How Warren Buffett raised $60 million for Israel Bonds

Warren Buffett, right, clowns around with Danny Abramowitz of Washington at an Israel Bonds dinner in Omaha that raised $60 million. Photo by Stacie Kinney
Warren Buffett, right, clowns around with Danny Abramowitz of Washington at an Israel Bonds dinner in Omaha that raised $60 million.
Photo by Stacie Kinney

PITTSBURGH — Sometimes chutzpah pays off in a big way.

Just ask Harold Marcus, the man charged with heading the sale of Israel Bonds in Pennsylvania.
Israel has just scored $60 million in new bond sales because Marcus had the moxie to send a letter to investment guru and philanthropist Warren Buffett, thinking, “What do I have to lose?”

Marcus is now on a first-name basis with one of the richest men in the world, and the Jewish state can count the Oracle of Omaha among its most enthusiastic supporters.

Marcus took a chance on reaching out to Buffett in 2015, when one of Israel Bonds’ longtime investors — an insurance company that was acquired by Buffett’s Berkshire Hathaway four years ago — declined to reinvest as one of its sizable bonds was maturing.

Buffett, who has a net worth of $70.8 billion according to Forbes, is the CEO of Berkshire Hathaway, which in 2012 acquired GUARD Insurance, now known as Berkshire Hathaway GUARD Insurance Cos. Prior to the acquisition, GUARD had a history of investing in Israel Bonds “at the top level,” said Marcus, executive director of the Pennsylvania region for Israel Bonds.

But after Berkshire Hathaway GUARD declined to reinvest, Marcus wrote a letter to Buffett. Marcus introduced himself and provided a history of GUARD’s investment in Israel Bonds. He asked for an opportunity to present his case.

“A week later, there was a message on my phone,” Marcus said. “The message said, ‘This is Warren Buffett. I got your letter.’ It took me 10 minutes to get my jaw off the floor.”

When Marcus returned the call, Buffett was friendly and open to hearing more about why Israel was a good investment, Marcus said.

“Before I could even get, ‘Mr. Buff … ’ out of my mouth, he said, ‘Call me Warren.’”
In the 10-minute phone conversation, Buffett told Marcus that he previously had invested in Israel for its “brand power” and, after hearing a bit more about Israel Bonds, said he would have GUARD reinvest.

But the story doesn’t end there.

After more correspondence, and a “thank you” call from then-Israel Bonds President and CEO Izzy Tapoohi, Buffett agreed to meet with Marcus, Tapoohi and Stuart Garawitz, vice president for sales for Israel Bonds, in Omaha in April.

That meeting was “incredible,” Marcus said. “It was an hour-and-a-half meeting. Warren Buffett was so down-to-earth, so regular, so unaffected. When we got off the elevator, he came to greet us personally. He’s a mensch.”

At that meeting, Buffett agreed to participate in a dinner event in Omaha with some of Israel Bonds’ top donors from around the country on Nov. 6. The minimum commitment for attendees was $1 million each.

Washington-area donors included Danny Abramowitz, Norman Friedkin, Steve Ross and Rick Zitelman.

The evening opened with a video of Israeli Prime Minister Benjamin Netanyahu praising Buffett and thanking everyone for their support, and ended with an almost two-hour Q-and-A with Buffett. Most of the questions related to his finance and business decisions.

Toward the end of the event, held at the home of Henry Davis, chief executive of the Greater Omaha Packing Co., Israel Bonds had raised a record-breaking $50 million.

“But Warren Buffett said, ‘I want to make this evening very interesting, and make the record hard for the next guy to beat,’” Marcus recalled. “He said he would personally invest $5 million if the attendees would [cumulatively] invest another $5 million.”

The investors met the challenge.

“I’m still grinning ear to ear,” Marcus said. “This whole thing happened because I wrote a letter.”
Buffett, who made the Israeli company Iscar his first overseas acquisition, spoke warmly of the Jewish state, calling it “a remarkable country,” according to a press release from Israel Bonds. He stressed that “the United States and Israel have a common destiny,” saying, “If you are looking for brains, energy and dynamism in the Middle East, Israel is the only place you need to go.”

Buffett emphasized his confidence in the permanence of the state of Israel.

“You can tell prospective investors that I would have taken a perpetual bond if you had offered one,” he said. “I believe Israel is going to be around forever.”

The lesson Marcus said he learned is, “If you don’t ask, you don’t get.”

The experience was “unbelievable,” Tapoohi said. “Harold Marcus gets a lot of credit for this. To have the chutzpah to say, ‘Let’s approach Warren Buffet.’”

Tapoohi said that the fact that Buffett is supporting Israel Bonds would “definitely” influence other potential investors.

“Here is probably, in terms of investment, the guru of the United States, if not the world,” Tapoohi said. “The three of us managed to open his heart, and he genuinely believes in Israel.”

Toby Tabachnick is senior staff writer at The Jewish Chronicle in Pittsburgh.

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