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Conflicts of Interest: Museum Trustees Play the Market

Jennifer Stockman, Guggenheim president and art-market player

Carol Vogel‘s detailed revelations (in her “Arts & Leisure” piece for this Sunday’s NY Times) about the wheeling-and-dealing leading up to next month’s big Impressionist/modern and contemporary auctions make for some riveting reading.

Her report is packed with juicy details, including information on the auction-house guarantees to consignors, a withdrawn guarantee at Christie’s, and, at Sotheby’s, an “irrevocable guarantee” made by a third party—a category that has now been allotted an unusual symbol in that auction house’s catalogue: . Maybe it should have been— 🙁

What I found most troubling were the revelations about museum trustees’ playing the art market. There’s nothing inherently wrong with trustees’ owning art, as long as they put their institutions’ collecting interests above their own (and, eventually, consider donating or bequeathing some of their holdings). But when they profit by buying and selling the same types of art that their institutions covet, they’re moving into dangerous conflict-of-interest (or at least appearance-of-conflict) territory.

The most striking “did she really say that?” quotes in the Times piece came from Jennifer Stockman, president of the Solomon R. Guggenheim Foundation, who, according to Vogel, crowed about her consignment to Christie’s of a painting by Peter Doig, which she had loaned earlier this year to a show of his works at the Tate in London.

Vogel writes:

“Talk about timing,” Ms. Stockman said of the consignment. She said
she secured a guarantee, so “it became almost impossible not to take
advantage of the sale.”

Ms. Stockman’s guarantee from
Christie’s includes other works she is selling as well, including one
of Richard Prince‘s nurse paintings, “Lake Resort Nurse,” from 2003,
which is expected to fetch $5 million to $7 million. Although it was not included in a recent retrospective of the artist’s work at the Guggenheim Museum, prices for Mr. Prince’s nurse paintings have skyrocketed recently…

…at least partly because of the Guggenheim showcase, one suspects.

Kathy Fuld, a trustee of the Museum of Modern Art (and wife of Richard, who presided over the demise of Lehman Brothers) “is parting with rare examples of drawings by Barnett Newman, Arshile Gorky, Willem de Kooning and Agnes Martin,” Vogel writes. Among them: Gorky’s Study
for Agony I
, described by Vogel as “a graphite, crayon and ink wash on paper executed in
1946-47, related to a painting from the same year that is in MoMA’s collection. Mrs. Fuld bought her drawing at Christie’s in 1996 for
$370,000. It is now estimated to bring $2.2 million to $2.8 million.”

It’s quite possible that MoMA might have liked eventually to have received that one. It’s not a stretch to imagine that a museum curator may even have advised Fuld on acquiring it, in the hopes of eventually filling a gap in its collection through donation or bequest.

MoMA’s president, Marie-Josée Kravis, is also (with husband Henry) consigning this fall, hoping to make a killing at Sotheby’s on Degas‘ “Dancer in Repose”, estimated to bring “in excess of $40 million.” In 1999, the Kravises paid $28 million for that pastel at the same auction house, Lindsay Pollock of Bloomberg reports.

What’s wrong with these pictures?

Let’s dust off what’s still the bible on the responsibilities of museum boards—“Museum Trusteeship” by Alan and Patricia Ullberg, published in 1981 by the American Association of Museums.

Some excerpts:

The trustee’s own acquisitions must not compete with his museum’s; he is obligated to put the collecting ambitions of his institution before his own. The collections management policy should itemize in detail the collecting interests of the museum so that trustees who collect are put on notice that certain activities related to their personal collecting must be circumscribed while they serve on the board….

The ethical standards that the board adopts for managing potential conflicts of interest for trustees are, in some museums, the same as those applied to the staff. The rules for staff with respect to collecting generally aim to prevent situations in which staff members compete with the museum or profit from their positions or official duties….

The trustee who collects could be liable to the museum for profits he makes as a provable consequence of actions taken by the museum if his participation was a major influence in the institution’s decision to take those actions. Such a case might occur, for example, if he persuaded the museum to hold an exhibition of objects represented in his personal collection and then was able to sell those objects at a profit. Whether his objects were exhibited or not, there is a conflict of interest and potential liability to the museum in this situation.

Maybe AAM needs to reissue that helpful handbook.

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