The U.S. investment company TIAA-CREF has amassed vast holdings of Brazilian farmland through a joint venture that has done business with one of the country's most notorious "land grabbers," according to a report published by a nonprofit group.
The report details a complex business arrangement that enabled TIAA-CREF to invest in Brazil's real estate market, even though the country's laws restrict foreign ownership of land.
Much of the land purchased by the company has been in the Cerrado, a large region where woodlands are being replaced by farmland — a process that worries many environmentalists.
TIAA-CREF is one of the country's biggest retirement fund companies, investing huge amounts of money for teachers, university administrators and public sector workers. It also manages retirement funds for NPR employees and is among NPR's financial supporters.
The company has long enjoyed a reputation for transparency and socially responsible activities.
The report about its Brazilian land holdings was prepared by the small international nonprofit Grain, which says it "works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems."
Grain says TIAA-CREF initially bought land through a Brazilian fund called Radar Propriedades Agricolas S/A. Radar was managed by Brazil's largest sugar producer, Cosan, which also owned 19 percent of the fund. The rest was owned by TIAA-CREF.
Radar's purpose was "to identify and acquire properties in Brazil, convert them into plantations of sugarcane and other commodity crops, and then sell them at a profit within a few years," the report said. It eventually purchased 392 farms.
In 2010, Brazil's attorney general placed much tougher restrictions on foreign ownership of farmland, the report said:
"Brazilian legislation should thus effectively bar TCGA from acquiring farmland on the scale that it typically seeks in its acquisitions. TCGA has, however, used a complex corporate structure that effectively bypasses this legislation."
TIAA-CREF created a vehicle called the TIAA-CREF Global Agriculture LLC, or TCGA, of which 51 percent was owned by Cosan. The New York Times reported that the new company was "largely indistinguishable" from the old one, with many of the same employees and executives:
"Moreover, the financing for the farmland acquisitions [comes] largely from TIAA-CREF subsidiaries in a type of loan that can be converted into stock, according to regulatory filings. The researchers at Grain argue that this corporate structure makes it possible for TIAA-CREF to conceal the control it exercises over the farms acquired."
Meanwhile, TCGA has continued to acquire farmland. Its holdings in Brazil have gone from 257,877 acres in 2012 to 633,391 at the beginning of this year, the Times said.
Some of the land was acquired from speculators who have used particularly brutal tactics to acquire land, the report says.
Over the past few years, as the price of Brazilian farmland has increased, companies and wealthy individuals have resorted to "an illegal process of land grabbing known as 'grilagem,' " the report said.
The report said the process "involves using political connections and false documents to claim title over public lands and forests":
"Land grabbers routinely fence off public lands on the chapadas, evict the local people who have used the land for generations, deploy private security forces, and then acquire property titles through the connivance of local notaries and government officials.
"It is difficult for the communities to resist this process because they rarely possess any form of official title to the lands they use on the chapadas and because the land grabbers use violence against people who try to resist. There are numerous reports of death threats, beatings and even assassinations carried out by hired thugs. Rarely can people appeal to local authorities for protection as the police, politicians and even the local judiciary often cooperate with or are directly involved in land grabbing. Local sources told us of several instances where the police directly assisted in evictions."
The report says four of the farms acquired by the companies were controlled by Euclides de Carli, owner of the Grupo de Carli, who has been accused of land-grabbing by officials in the state of Maranhao.
One state deputy has accused de Carli "of using armed thugs to evict people and of ordering the assassination of a farmer who would not sell lands to him. Other investigations have uncovered how de Carli and other land grabbers routinely use falsified documents to grab lands in the area," Grain says.
A spokesman for TIAA-CREF, contacted by NPR, declined to comment about the report.
A spokeswoman for Cosan told the Times the company "has a 70-year history managing farmland in Brazil and is committed to high standards of responsible investing through the entities it controls."
Cosan acknowledged buying farmland controlled by de Carli. But the company said a review "at the federal, state and municipal levels" had not uncovered any criminal activities by de Carli, according to the Times:
"But prosecutors familiar with Mr. de Carli still expressed surprise that prominent investors would pursue such deals when a simple Internet search reveals a long list of illegal land-grabbing accusations against Mr. de Carli."