How Ikea And Harvard Got Tangled In A Corrupt Romanian Land Deal
This article was originally published by the Organized Crime and Corruption Reporting Project.
The retail giant IKEA is one of the world’s largest furniture makers, using one percent of the global wood supply each year to make about 100 million pieces of inexpensive, smartly designed furniture sold through its international network of stores.
Harvard University is the symbol of American intellectual and political power – producing eight US presidents and many of the leaders of American industry.
But for the past year, Harvard has been sitting in Romanian courts trying to keep control of national forest they bought. The state says Harvard bought some of its land from a group of figures that are under investigation for cheating the state. Subsequently IKEA bought the same forests from offshores controlled by Harvard’s investment fund.
To say these two global brands may have been duped may not be accurate. Unlike IKEA’s furniture, these deals are turning out to be neither smartly designed nor inexpensive for either organization.
Starting in 2004, Harvard bought more than about 33,000 hectares (83,000 acres) of forest land in hundreds of small tracts through local intermediaries that Romanian prosecutors have since charged with corruption and organized crime activities or who are under investigation. The deal between Harvard and IKEA also followed an unusually complex route and was facilitated by another group of Swedish- and Luxembourg- based companies connected to, or controlled by, the American university.
Romanian authorities are challenging some of the transactions on the grounds that state-owned forests were illegally reclassified as private property through a restitution program designed to return nationalized land to its former owners.
A Romanian judge has already invalidated one property deed in Harvard’s portfolio, ruling that the forest was not acquired in good faith. Because the same group of —> Read More