More on the Raiders of the Los (Angeles) Art

Jason Felch of the LA Times today has published an updated report of his shocking revelations yesterday about the long-term federal sting operation and the sudden four-museum early morning raid by federal agents. They were seeking evidence in connection with their five-year investigation of transactions and possible tax fraud involving allegedly looted objects.

Before I get to the meat of Felch's detailed article, I'd like to add two comments:

First, the dramatic raid, photographed by the LA Times, was out of proportion to what it was attempting to achieve, unless its goal was sensational publicity for the federal enforcement team and against the targeted museums. I doubt that any of the institutions under investigation would have denied requests by the government agents for records, nor would they likely have destroyed documents had they not been taken by surprise. This dragnet seems to have been staged for maximum shock value.

Second, my comment in my previous post---that it's too soon to say whether this will turn out to be another MUSEUM scandal---has been miscontrued by at least two commentators. Here's what I said: "This may well turn out to be an ART-MARKET scandal, but the degree of intentional complicity by MUSEUMS in this mess is not yet known" (emphasis added).

Here's what Felch himself has to say:

No arrests were made, but legal experts say the surprise search warrants suggest prosecutors are collecting the final elements to seek criminal indictments against [dealer Jonathan] Markell and [alleged smuggler Robert] Olson....

The warrants served Thursday show prosectors have carefully laid a foundation for the possible indictment of museum staffers allegedly complicit in the looting schemes---which would be a first under American law, experts say....

In the case of the Bowers [Museum, Santa Ana] and the Pacific Asia Museum [Pasadena], the warrants clearly suggest that officials were aware that the objects were looted and overvalued but accepted them anyway....LACMA [Los Angeles County Museum of Art], the Mingei [International Museum, San Diego] and the UC Berkeley Art Museum all received similar donations from Markell or Olson over several years, the warrants say, but the documents are unclear about the extent to which museum officials knew of alleged theft or tax evasion.

Today's NY Times report informs us that LACMA "had about 60 objects related to the investigation that had been donated...over the last decade." It also provided these details, from the search warrant affidavits, about the allegedly inflated appraisals for donations to the museums now under investigation:

The Markells would acquire an object from Mr. Olson and then offer it for sale to the undercover agent for about $1,500. They would provide an appraisal valuing the object at close to $4,990, an amount calculated to get around tax regulations requiring more documentation for bigger donations.

This strategem would have allowed donors to avoid the requirement that objects valued at over $5,000 be accompanied by IRS Form 8283, containing a "qualified appraisal" by a "qualified [independent] appraiser," as defined by the tax code. The donor is required to give the donee a copy of the appraisal and the receiving organization (such as a museum), as well as the appraiser, must sign Form 8283. The museum's signature acknowledges receipt of the property but does not constitute any opinion on the amount of the appraisal.

These requirements do not apply for under-$5,000 donations, but tax deductions still must not exceed the objects' properly appraised fair market value.

January 25, 2008 10:36 AM | | Comments (0)

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Me Elsewhere

Highlights from my writings and broadcasts: 


MY BOOK
The Complete Guide to Collecting Art (Knopf)

IN THE MAINSTREAM MEDIA
NY TIMES OP-EDS:
For Sale: Our Permanent Collection (museum deaccessions)
Fashion Victim (Chanel at the Met)
Destroying the Museum to Save It (Barnes Foundation)
Reassembling Sundered Antiquities (Parthenon marbles)

WALL STREET JOURNAL:
Los Angeles' New Broad Museum of Contemporary Art
Philadelphia's New Perelman Building
The Walton Effect: Art World Is Roiled by Wal-Mart Heiress

Tricks of the Auction Trade

The Seattle Art Museum: A Work in Progress

Upside Down and Backward, Yet Tame (Boston ICA)
Edith Wharton's Library Is Now an Open Book
Extreme Makeover: Smithsonian Edition (American Art and Portrait Gallery renovation)
This Museum's Expansion is Simply Effective (Minneapolis Institute)
Truth in Booty: Coming--and Staying--Clean (antiquities controversies)
A Betrayal of Trust (NY Public Library's art sales)
The Lost Museum (MoMA's art sales)
Endangered Species (single-collector jewel-box museums)
Money in Motion (the Guggenheim's finances)
The Fine Art of Genocide? (appraisals of Hitler's art)

LA TIMES OP-EDS:
Make Art Loans, Not War
Museums Can't Compete (public collecting endangered)

ART IN AMERICA:
Refreshing the Smithsonian (the renovated SAAM and NPG)
The Atrium That Ate the Morgan (Renzo Piano's addition)
Hot Pots and Potshots (controversies over museum antiquities)
Musings on Museums (book review of "Whose Muse?")

NATIONAL PUBLIC RADIO:
Criticism of AAM's Cultural Diplomacy Initiative

NEW YORK PUBLIC RADIO:
Guggenheim Director Steps Down
Philippe de Montebello's Retirement
Fall '07 Art Auctions
Metropolitan Museum's "Age of Rembrandt" Show
Commentary on the Art Market
Tour of Sculpture Gardens, with Slideshow
Audio Commentary on the Met's New Greek and Roman Galleries
Glenn Lowry's Unorthodox Compensation Package
Commentary on the Art Market

PHILADELPHIA PUBLIC RADIO:
Museums' Purchase and Sale of Eakins' Works (about one-third of the way into the program)
Pennsylvania Academy of the Fine Arts' sale of Eakins' "The Cello Player"

BBC-TV:
Impressionist/Modern Auction at Sotheby's

more of me elsewhere

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About this Entry

This page contains a single entry by CultureGrrl published on January 25, 2008 10:36 AM.

LA Museum Raids Prompt Premature Talk of Scandal was the previous entry in this blog.

Cambridge Loves CultureGrrl: "Don's Life" Classics Professor on a BBC Podcast is the next entry in this blog.

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