Clueless on the Kos: Museums and Donors' Appraisals

Paul Werner, in the widely read Daily Kos, today takes me to task for having "never seen a scam she wasn't blind to" (so unfair!), because I questioned why the feds needed to stage a dramatic, highly publicized raid on museums to get the information they sought.

Werner goes on to assert that "the Feds were looking for records of a less official nature, like a couple of written wink-winks as to the real value of various donated objects....Here's the point: it's about the very real possibility the museums knew their own valuations were inflated, and inflated their valuations for gain."

The problem with your argument, Paul, is that museums don't provide the valuations of donated objects; donors' appraisers do. Museums are not legally responsible for assuring the accuracy of the appraised value; the donors and their appraisers are. Any tax fraud charges would likely be against donors or appraisers, not museum officials. What museum officials need to worry about is the issue of stolen property: Did they knowingly or negligently acquire works that ran afoul of the National Stolen Property Act?

If a museum official knew that appraisals were being inflated for the purpose of tax fraud, he should have not accepted the pieces. That's an ethical issue, not a legal issue. Museum officials generally keep arms-length from appraisals---a distance that's appropriate and consistent with the law. If a museum official actually provided the inflated appraisal used by the donor for tax purposes, THAT would be both a legal and ethical problem.