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Harvard fund evades justice in land-grabbing case over Cerrado farm

  • In September, the court in Brazil’s Bahia state ruled that a company in which Harvard University’s endowment fund was invested had illegally acquired the land for a large farm in the Cerrado grasslands.
  • The Gleba Campo Largo farm, spanning 140,000 hectares (346,000 acres), has for years been the focus of violent land disputes.
  • The farm’s registered owner is Caracol Agropecuária Ltda., a company that the Harvard Management Company is believed to have poured an estimated $59 million into over the course of about a decade.
  • The Harvard Management Company fully divested from Caracol in June 2019, avoiding Bahia’s State Justice recent condemnation.

On Sept. 8, a court ruling shook up an old land conflict in Cotegipe, in the Brazilian Cerrado grasslands. That was when the 3rd Civil Chamber of the Bahia state Court of Justice ruled that Caracol Agropecuária Ltda., a major landowner, had illegally appropriated an area larger than the city of Rio de Janeiro.

For years, attorneys and the state government have pointed out that Caracol’s Gleba Campo Largo farm was the result of “countless irregular and illegal procedures.” In December 2018, the case ground to a halt after another court decision rejected the charges and even dismissed the case. By unanimously overturning that decision this past September, the state court immediately froze the farm’s assets, including its 140,000 hectares (346,000 acres) of land. But justice hasn’t been served to everyone, and certainly not to the key funder behind Caracol: Harvard Management Company, the investment fund run by the top U.S. university, funded Caracol for many years.

Caracol Agropecuária Ltda. was created in August 2007 and is worth more than 19 million reais ($3.4 million), a the figure that may include the land grabbed in Cotegipe. Blue Marble Holdings, one of Harvard’s asset managers, was responsible for transferring money to Caracol for almost a decade. In 2016 alone, it deposited more than $2.4 million, according to U.S. tax records. The NGO GRAIN estimates that Blue Marble allocated more than 330 million reais ($59 million) to Caracol in total.

Official suspicions about Gleba Campo Largo have abounded since 2013, when the Bahia Agrarian Development Department entered the case. The state agency produced a report that revealed signs of land grabbing. But the evidence was not enough to convince Leandro Santos, a judge from Cotegipe, who rejected the charges and dismissed the case in December 2018.

The preliminary court win raised a red flag for Harvard. With the case not moving forward in western Bahia, the university cut its ties to Caracol Agropecuária, completely divesting as of June 2019.

According to Brazil’s Federal Revenue Service, Caracol remains active and is managed by Alexandre Delmondes in partnership with two U.S.-based firms, Bromelia LLC. and Guara LLC. The office of the Massachusetts Secretary of the Commonwealth reports that both companies had the same address as of June 2019: 600 Atlantic Avenue, Boston. That’s also where the Harvard fund’s commercial headquarters is located.

It was also in June 2019 that both Bromelia and Guara were shut down in the United States. At the same time, Caracol dismissed the farm’s managers in Cotegipe. The farm’s former management company, Granflor Agroflorestal, confirmed to Mongabay that the partnership was cancelled.

The Harvard Management Company says it “is not invested in Caracol and has not been during any of the times in question.”

Map of Harvard investments in Brazil. Image by AidEnvironment.

The recent court decision appears to mark the lowest point in Harvard’s agricultural investments in Brazil. Mongabay has reported on how the university’s investment fund injected millions of dollars into conflict zones in the Cerrado. The farm in Cotegipe follows a similar pattern.

In 2008, when Caracol began buying land in western Bahia, ranchers and gunmen came together to intimidate the resident campesinos and landless rural workers away from the area. More than 200 campesino families occupied part of the land. According to investigative reporting outlet Agência Pública, at least four murders have been linked to the dispute.

The campsinos allege that Caracol used the farm only for speculation. The report produced by the Bahia state government echoed the claim, saying that only “through Caracol Agropecuária Ltda., sales [of land in Cotegipe] reached significant figures, indicating the most cynical real estate speculation.” Prices of bare land — native Cerrado grassland — in neighboring municipalities suggest that this is a growing trend in western Bahia.

Banner image of a sign demarcating the Gleba Campo Largo farm in the Cerrado, by Alicia Prager.

This story was first reported by Mongabay’s Brazil team and published here on our Brazil site on Oct. 7, 2020.

Correction: Due to a translation error, a previous version of this story stated that the Harvard Management Company’s response to its alleged involvement with Caracol was it “does not have and has never had any ties to Caracol.” The correct answer, as updated on October 15, 2020 is that “HMC is not invested in Caracol and has not been during any of the times in question.”

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