Harvard — May 3, 2014 8:55 pm Harvard’s Scolopax Scandal & the Need for Responsible

[Disir]

On January 21, the former managing director of the Harvard-owned timber company Scolopax SRL was detained on charges of money laundering and corruption in Romania. According to Romanian prosecutors, Dragoș Lipan Secu and his wife accepted bribes including a Crysler Sebring, a vacation to the Canary Islands, and $1.3 million in exchange for purchasing forest land at an inflated price.

Although Scolopax SRL is entirely owned by Harvard Management Company, this corruption scheme, which took place between 2007 and 2009, was discovered by local whistleblowers. As students and workers of Harvard, we are embarrassed that Harvard does not have a system of accountability in place to ensure even the most rudimentary legal compliance at the companies it owns. Basic responsible ownership policies would help to prevent corruption and unethical behavior at Harvard’s 237 majority-owned companies. The unfortunate events at Scolopax highlight the urgent need to implement responsible ownership at Harvard.

We depend on Harvard’s endowment to fund financial aid, staff and faculty salaries, and the students’ extracurricular and academic lives—but our university should not profit off of injustice, environmental degradation, or cut-rate but inadequate governance. On January 23, we joined 50 students and alumni in emailing Harvard President Drew Faust to demand that Harvard be a more responsible owner of directly-held companies such as Scolopax. President Faust has not responded to these communications. Yet on the same day—coincidentally, according to Harvard spokesman Kevin Galvin—Scolopax issued an “urgent” letter announcing that it intended to sell 32,465 hectares of land in Romania.

As of 2011, Scolopax held approximately 35,000 hectares of Romanian forest and 2,000 of its farmland, which made Harvard the largest private owner of forests in the country. Why was Scolopax so urgently selling nearly all of its land? Galvin stated that “this transaction is part of a process that started in November of 2013, prior to the recent reports in the media.” But could it simply be a coincidence that the sale was announced in an “urgent” notice just two days after a corruption scandal broke? Did Harvard know that Lipan Secu had taken bribes when it initiated this sale?

...Harvard’s extensive ownership of forestry operations worldwide—unique among universities—began almost 20 years ago. Harvard Management Company, which manages our university’s endowment, started purchasing timberland in the United States in 1997. Under the leadership of Jane Mendillo and Andy Wilshire, HMC has dramatically expanded its investment in overseas timber in the past six years. Today, Harvard lists 237 companies that it owns fully, including Scolopax, on its IRS tax filings. Little public information is available about most of these enterprises.

Harvard?s Scolopax Scandal and the Need for Responsible Ownership - Harvard Political Review

Demand ethical ownership.