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West Wing Dramas: Cleveland Museum’s Insubstantial Information and Creative Accounting

Cleveland Museum’s Rafael Viñoly-designed East Wing, which opened in June 2009 Photo by Lee Rosenbaum

Cleveland Museum’s Rafael Viñoly-designed East Wing, which opened in June 2009
Photo by Lee Rosenbaum

I have never seen a more ignored major expansion of a top-tier American art museum than the Jan. 2 public opening of the final phase of the Cleveland Museum’s eight-year, $350-million Rafael Viñoly-designed expansion and renovation. I can only guess that the museum is low-keying the West Wing’s rollout because of the shadow cast by this recent debacle, which left it without a permanent director, with a big hole in its exhibition schedule, and with the urgent need to restore public confidence.

The opening of the West Wing, which allows the museum to return its renowned Asian art collection to public view after years in storage, has so far been under the radar of most of the national press. (One exception is a brief Associated Press mention.) The museum seems to be making less of a push for publicity than one would expect for such a landmark event in its history.

Puzzled by the paucity of published information, I recently contacted the museum for specific details about the capital project’s finances and I repeatedly asked to be sent a comprehensive media kit and fact sheet regarding the institution’s new architecture and installations. Such materials are customarily provided to cultural journalists for museums’ major capital projects.

All I got was this surprising reply from the museum’s press office:

We are compiling a building project press kit and answers to most of your questions will be found in these materials. The kit is in the stages of being finalized [after the new wing has already opened?!?] and as soon as it is ready, I will send you the information.

Better late than never, I suppose.

At this writing, I can’t even get confirmation from the press office that the final cost total for the expansion/renovation is still pegged at $350 million.

Until the museum gets around to providing more information about its now completed capital project, we’ll have to settle for this brief, celebratory press release about its recent accomplishments and rely on the continuing detailed coverage by the indefatigable Steve Litt of the Cleveland Plain Dealer. He informs us (with a 63-image companion slideshow) that the new wing’s “six new galleries contain nearly 500 works of art in jade, silk, bronze, gold, porcelain, ink on paper and dozens of types of stone,…ranging from monumental Hindu temple sculptures to delicate porcelain basins used by Chinese scholars to wash calligraphy brushes.”

The new wing’s contents also include nine of the 95 works from the just announced acquisition of the Benkaim Collection of Deccan and Mughal paintings.

Here’s one example:

"Shah Jahan Holding a Spinel and a Long Deccan Sword," from the Late Shah Jahan Album, c. 1650. Attributed to Hashim (Indian, active Mughal court, mid-1600s), Benhaim Collection, Cleveland Museum of Art

Attributed to Hashim (Indian, active Mughal court), “Shah Jahan Holding a Spinel and a Long Deccan Sword,” from the Late Shah Jahan Album, c. 1650, Benkaim Collection, Cleveland Museum of Art

Litt also gives us this update on the capital campaign’s substantial, disturbing shortfall:

As of Dec. 18, the institution had raised $260.2 million in cash and pledges to pay for the expansion and renovation. But that leaves another $89.8 million to raise [emphasis added] in a region with a shrinking donor base and many financially hungry arts and cultural organizations—not to mention hospitals, universities and other nonprofits.

Speaking of shortfalls, I tried and failed to get the museum’s press office to update me as to whether any of the $75 million in income from four acquisition-endowment funds—being used over a 10-year period to back the tax-exempt bonds that are helping to finance the museum’s expansion—had actually been used to repay those bonds, pay debt service or support the expansion project in any way. Such use would be a diversion of those funds from the collections-building purpose for which they were expressly earmarked by their donors.

My own recent examination of the museum’s audited financial statements revealed that some $22.4 million in income from art-purchase endowments was, in fact, diverted to fund expansion project costs over a four-year period.

The museum’s embattled and now departed director, David Franklin, had told Judith Dobrzynski for a March 2012 NY Times article that he had “abandoned plans by his predecessor to devote $75 million in income from its art acquisitions funds, over 10 years, to the museum’s expansion. ‘We will not spend any of that,’ he said. ‘It’s almost an insurance policy. Our goal is to fund-raise that money. It will never be spent on the building if my campaign works.'”

Notwithstanding Franklin’s assertion, some of the income from the art-acquisitions endowments had already been appropriated and continued to be appropriated on his watch to “fund the project costs associated with the expansion project,” in the words of the museum’s own online audited financial statement (p. 9) for the fiscal years ending June 30, 2012 and 2013.

That financial statement says:

During fiscal 2010, the Museum received approval [my link, not theirs] from the Court of Common Pleas, Probate Division, to appropriate a percentage of the income restricted for art purchases generated from four charitable perpetual trusts for the purpose of funding the project costs associated with the expansion project currently under taken by the Museum. The total appropriated is not to exceed $75 million.

During fiscal 2013 and 2012, the Museum appropriated approximately $5.6 million and $5.6 million, respectively [emphasis added] for said purpose from the temporarily restricted income from the four charitable perpetual trusts.

[As is customary in such reports, the numbers in the financial statement are expressed in thousands: One must add three more zeros to “$56,000” (as I have done, above) to get the actual dollar amount.]

But that’s not all: An earlier financial statement for the prior two fiscal years (already concluded when Franklin made his upbeat 2012 pronouncement) says this (on p. 8) about the use of income from the four art-purchase endowments to help fund expansion-related costs:

During fiscal 2011 and 2010, the Museum appropriated approximately $5.5 million and $5.7 million, respectively [emphasis added], for said purpose from the temporarily restricted income from the four charitable perpetual trusts.

Although approved by the court, this repurposing of money intended for art purchases is a highly problematic violation of donor intent that could undermine the confidence of potential future benefactors who expect their wishes to be scrupulously honored.

In his Dec. 26 article on the West Wing, Litt promised that the Plain Dealer would soon “take a deeper look at the expansion, including an assessment of its design and its impact on the museum’s operations and endowment.” Perhaps other eminent art and architecture critics will belatedly weigh in on this major addition to our country’s cultural landscape. Notwithstanding its checkered recent past, Cleveland merits widespread attention as one of the most precious jewels in the U.S. artworld’s crown.

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