Feb. 13 (Bloomberg) -- Harvard University is selling forest land in Romania amid revelations that an agent it hired to help make the investment was arrested for taking bribes.
Scolopax, a company controlled by the university, has advertised 32,465 hectares (80,200 acres) of timberland for about 383 million lei ($116 million), according to an announcement published at a town hall in the eastern Romanian county of Vrancea. A copy of the announcement was obtained by Bloomberg News.
Kevin Galvin, a spokesman for Harvard, said the university is in the middle of a transaction that began before Romanian authorities arrested Dragos Lipan Secu in January. Lipan Secu, who represented Scolopax, was charged with taking more than $1 million in bribes to induce the university to buy forests at inflated prices.
“This transaction is part of a process that started in November of 2013,” Galvin said in an e-mail. “The transaction does not affect our commitment in Romania, but because of the ongoing transaction process, we are not in a position to comment any further on this matter.”
Harvard, the world’s wealthiest university with a $32.7 billion endowment, began making acquisitions through Scolopax in 2007, according to Romanian authorities. Ziarul Financiar, a daily newspaper based in Bucharest, reported in 2011 that the Ivy League school in Cambridge, Massachusetts, was the largest owner of forests in Romania after the state government, controlling 35,000 hectares through Scolopax, as well as 2,000 hectares of farmland.
Lipan Secu arranged with unnamed sellers to artificially boost prices that Scolopax paid for timberland between 2007 and 2009, anti-corruption prosecutors said in a statement Jan. 21. The agent collected bribes valued at 4.45 million lei, as well as a 2007 trip to the Canary Islands and a Chrysler Sebring car, prosecutors said.
He was also charged with money laundering, and his wife, Mariana, was arrested for complicity. The two were held in preventive custody in Bihor county and are facing more than 10 years in jail.
The pair were caught when two people who allegedly paid the bribes reported the Lipan Secus to authorities, prosecutors said last month. Under Romanian law, a person who reports a crime before it comes to the attention of prosecutors receives immunity, according to Livia Saplacan, a Bucharest-based spokeswoman for the Romanian Anti-Corruption Department. The sellers won’t be investigated, Saplacan has said.
Scolopax, based in Brasov, Romania, is owned by Harvard through an investment entity called Phemus Corp., according to the university’s tax filings. Neither Harvard nor prosecutors would say how much Scolopax may have overpaid for its forests. The publicly listed telephone number for Scolopax no longer works.
Prosecutors said Lipan Secu was managing director for Scolopax. The university has said he was a contractor rather than an employee and that his relationship with Harvard Management Co., which oversees the endowment, ended in December 2012.
The university has been increasing investments in natural resources in foreign countries, including timberlands that are farmed for paper and wood products. Jane Mendillo, president and chief executive officer of Harvard Management, began exploring timberland as an investment in the 1990s when she was a vice president. The endowment sold its U.S. tree farms in the past decade and began making similar purchases overseas, including in New Zealand and most recently in Brazil.
The timberland sales were earlier reported by the Harvard Crimson, citing documents provided by Rise, a Romanian collective of investigative journalists and activists.
Scolopax had assets of $126 million as of June 30, 2012, according to a tax filing by Phemus, which is incorporated as a nonprofit entity and based in Boston.