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June 3, 2009

Wednesday, June 03, 2009 - ,,,,, No comments

The Art Market: How Lending Fuels Art Crime


ARCA is pleased to present a series of papers written by graduates of Noah Charney's course on art crime, taught at Yale University in the Spring of 2009. The following article was written by Elizabeth Sebesky.

The Art Market: How Lending Fuels Art Crime

Introduction
The term “art market” is a contradiction in terms. The act of turning art into commodity, into a form of collateral or financial asset, fights against the instincts of art lovers, who cherish its priceless, intrinsic value. However, Iain Robertson, Head of Art Business Studies at Sotheby’s in London, points out in his monograph, Understanding International Art Markets and Management, that even though “art and money might still seem like uncomfortable bedmates, […] the relationship is sacrosanct.” The psychology that fuels the acquisition of material wealth also drives art collection: “the acquisition of art, a tangible ‘consumption good’ with ‘social capital’, is also seen as a positive addiction.” Furthermore, the characteristics of art crime are quite similar to those of financial over-extension to the point of bankruptcy and white collar crimes, such as investment fraud, security fraud, and money laundering. In fact, Interpol has recently reported that “financial crime[s] such as money-laundering” are believed to be “intimately connected in many cases [with] the drugs, arms and the illicit art and antiquities trades.” Although there are many overlaps between art crime and national and international financial markets, the impact of art lending companies, that turn art into collateral, has been relatively unexamined and is pertinent today and in other times of economic downturn. By presenting a case study on the recent upsurge in this financial practice, pointing out some of the problems and pitfalls of art lending and the art market more generally, and then recommending some preventative measures and solutions, this paper will help raise consciousness on the ways in which art lending practices can contribute to and enable art crime.


The Psychology of the Art Market as It Leads to Art Crime
It is important for art historians and art economists to go beyond a traditional neoclassical economic analysis of the art market when examining art crime. Instead of analyzing common topics such as the distinction between public and private art supply, scholars and professionals in the field must pay attention to both “the extrinsic and intrinsic motivation” of players in the art market and the “dynamics of interaction” between these two motivations. The intrinsic motivation can be defined as psychological attachment to the art itself or what the art represents for the buyer. External motivation connotes the practice of distilling aesthetic value into a pure monetary figure or financial asset. The first step to serious investigation is to put both of these motivations in financial terms, such as “psychic return” and “consumption benefit” respectively. Those who care primarily about “psychic return” are “pure collectors”, who purchase or hold onto artwork due to their personal regard for it and ignore price fluctuations in the market. In contrast, “pure speculators” are more willing to sell their art due to “unpredictable financial risk (price variations) and uncertain attribution” and are most concerned with the art object’s “consumption benefits.” Understanding the psychology behind these “consumption benefits” allows art historians and art criminologists to focus on individual players—such as lenders, dealers, and investors—who all have their personal psychological justifications for criminal actions. 

The Art Lending Company: “Private Banking for the Art World” Recently, news sources, including The New York Times, reported that art lending companies across America have had a recent upsurge in business from art owners, collectors, and dealers, who have decided to leverage their art objects. The most prominent companies include Art Capital Group, Art Finance Partners, Sotheby’s Financial Services, Emigrant Bank’s Fine Art Finance, ArtLoan, and lending services at the “art advisory wings” of large banks such as CitiGroup, Bank of America, USB, and Deutsche Bank. Art Capital predicts that they will make about $120 million in art-related loans in 2009, up $40 million from 2008; Art Finance Partners reports a 40% rise in business over the last six months. Similarly, owner Ray Parker Gaylord of ArtLoan says that he has “seen ‘exponential’ growth in the last year even though it charges interest rates of 18-24%.” Independent companies not attached to big banks are desirable to some clients, who wish to keep their financial affairs especially private or separate from other parts of their personal finances or for those unable to get a loan from bigger art financing companies. The owner of Art Capital, Ian Peck, admits that clients come to them in times of financial trouble—“burned by Ponzi schemes.” Generally, these art lending companies charge 40% of what they appraise the artworks to be worth. Often, they gain full possession of the art objects if their clients default. These statistics indicate the success of this corner of the art market and that it fulfills a real function for art owners in economic trouble. 

Those seeking capital can receive loans that are “asset-based”, meaning they come from temporarily exchanging property (in this case art objects) instead of being credit-based. Across the finance industry, pieces of art are considered “unconventional assets.” Art owners looking for cash have a few options: they can “borrow against” their artwork (fine and decorate arts, antiques, and collectables), receiving what is called a “term loan”; here, the owner can temporarily lend his/her art pieces without selling them outright in order to get money or “liquidity.” Another option that most private firms offer is if an owner knows he/she wants to sell an art object outright, he/she can borrow a certain amount of money based on a “low-end auction estimate” of the price in advance of the sale; this practice allows clients to continue investing while waiting for consignment to occur. Sometimes the art object is not the only object that is used as an asset and is combined with other forms of leverage in a collateral package. Additionally, some of these private companies offer loans for art dealers, based on the value of their industry, and carry out “consignment financing” to provide financial support to dealers so that they can effectively sell their art objects.

A recent article from The New York Times, published on February 23, 2009, “No Banking on Art”, uncovers the private financial situation of the famous photographer Annie Leibovitz, who was forced to do business with Art Capital Group; it is reported that she used her estates, but even more shocking, her “‘copyrights, photographic negatives, [and] contract rights’ existing or to be created in the future” for $5 million of collateral. This opens the door to uncharted territory about lending intellectual property rights in exchange for cash and signals the need for revisions in art law.

Problems 
One of the most pressing issues surrounding art lending companies is that they generally pride themselves on providing confidential service; this lack of transparency translates into the potential for illegal transactions and “grey” territory. Ian Peck, co-owner of Art Capital, describes his business as being “very discreet” and advertises Art Capital as “private banking for the art world.” The New York Times withheld the name of a client of Art Capital, a former investment banker in New York, upon his request, as “he did not want friends to know his financial situation […].” If providing confidential services for clients, who are embarrassed or prideful, becomes too big of a priority for art lending companies, they run the risk of inaccurately keeping records of appropriate transactional documentation and in-house inventories. Within the body of this New York Times article, a few other clients comment on the “legal messiness” that ensues due to the lack of data open to public access; this “messiness” is amplified by the sensitivity of a business where art owners must face losing their prized possessions. In his book, Iain Robertson confirms what the news has been reporting: “the art market’s often covert and secretive buying and selling practices do encourage or at least permit high levels of criminal behavior.”

The high risk behavior that accompanies dealings in the art market facilitates what Patrick Boylan, Emeritus Professor of Cultural Policy and Management at the City University of London, calls “deception crimes.” Boylan reports that “in addition to theft (in the narrow sense), burglary or robbery, the art sector also experiences a fourth significant group of theft crimes, which are usually much more difficult to detect, namely obtain[ing] property or […] financial advantage by means of deception.” These “deception crimes” include forging documents, diverting works of art without proper authority, and money laundering. Clients run the risk of being too confident in these lenders to keep track of their art due to the persona that these private companies adopt and therefore do not impose a third-party monitor. Many of the companies mentioned in this paper purposely take on rich, famous clients such as Veronica Hearst, Annie Leibovitz, and Julian Schnabel for the status of their own business. This preoccupation with status can cause lenders to favor one client’s pieces over another, giving a certain collection favored security measures.

These social interactions and networking tasks may detract from the overall effectiveness of the business: for example, it is important for lenders to research the provenance of objects in their possession in case they were illegally acquired somewhere along the line. If the art lender does not know the provenance of an object, he/she could unknowingly perpetuate the crime by passing it on to an auction house or dealer. As their degree of separation becomes greater, these auction houses or dealers become even more “in the dark.” “Client confidentiality” also makes it easy for sellers to simply not tell the loan company that an art object has a criminal provenance and use a loan to purposely exchange “dirty money” for “clean cash.” Are protective measures in place to prevent this from happening? Furthermore, do these art lenders have the expertise and experience to come up with a monetary amount for Annie Leibovitz’s copyrights and contractual rights: a topic that hasn’t even been well established in the body of intellectual property law? Are they taking her on as a client irresponsibly for status reasons without having adequate legal background? Baird Ryan, co-owner of Art Capital boasts that “because his firm understands the art market better than regular banks, artists can make attractive borrowers.” However, are these lenders within relatively small companies prepared to take on these many different roles? 

Asymmetrical information between the buyer and seller is another way in which a lack of information transparency affects the art market. In Art & Economics, Bruno Frey confirms that art markets are driven “by a strong prevalence of behavioral anomalies” of the buyer and seller, who interact in a subjective manner while conducting business. This leads to disparity in the pricing and the background information or provenance of the art object. In Iain Robertson’s Understanding International Art Markets and Management, Professor Boylan writes a chapter that informs the study of art crime by pointing to ways in which the art market falls short:

Although there are many similarities between the art and financial markets, there are crucial differences, which make pricing art and accounting for risk in the art market much less accurate and effective than in the stock market. The measurement of art returns is subject to unacceptable levels of misinformation, and profits and losses are often shrouded in mystery. Most art businesses are privately owned, small enterprises jealously guarding price information. Client identity is confidential and the buyers prices have paid outside auction are hard to verify. Finally, there is no obvious benchmark for art, which makes risk assessment very difficult.
What Professor Boylan refers to as “unacceptable levels of information” applies to small lending companies, who conceal transactional information. In addition to creating “dark alleyways” where art crimes can occur, this lack of transparency compounds the difficulty of pricing art. The process of liquefying art assets or borrowing money against art objects presents high financial risk to the seller or loan client as well as the buyer or art lending company; this is because the translation of aesthetic value or what Iain Robertson calls “psychological dividends” into dollar amounts is not clear-cut. The seller’s assessment of the economic value of the work takes into account his/her personal regard and taste. In this way, the seller may not get as much money as he/she thinks the art object is worth. Not only is the art object devalued in a humanistic sense, but this exchange into money also paves the way for nefarious activity: art lenders can make a profit off of clients, who default and hand over their objects, by eventually selling the object to a third party auction house or dealer for more than it was originally appraised due to a discrepancy in information exchange. 

Thus, another risky area surrounding art lending companies is the physical storage of the art piece when it changes hands between buyer and seller. Taking on the role of the middle-man, art lenders must use adequately secured storage and gallery facilities when they repossess the art objects from clients that default on their loan payments. There are three areas where the art pieces could be at risk: in transit on the way from the client’s possession to that of the lending companies or from a lending house to an auction house or dealer, in the lending companies’ main facilities/gallery, and in a storage facility separate from the executive offices. In her article for Art & Crime, “Implications of Art Theft in the Fine Art Insurance Industry”, Dorit Straus tracks the number of thefts that occur in certain places; she notes that most thefts do not occur in alarmed museums, but in privately owned locations: out of thefts reported to the Art Loss Registry since 1991, 4,884 have occurred in “private residences” compared to 3,040 thefts in “art galleries and corporations”, 889 in museums, 388 in-transit and 482 in warehouses. Although there are a surprising number of thefts recorded in transit, an even vaster number of objects are stolen from galleries and corporations. 

The New York Times article, “No Banking on Art” that is mentioned in previous paragraphs above describes Art Capital’s headquarters as a swanky building on Madison Avenue previously owned by Sotheby’s that “looks at first like an art gallery.” The reporter goes on to note that “two Warhols, a pair of Rubens portraits of Roman emperors and a pink nude by the contemporary Mexican painter Victor Rodriguez hang on the cool white walls [while] a sculpture of the faun by Rembrandt Bugatti sits on a windowsill in a conference room where transactions are discussed.” It is the mix of art with financial business that is the most disconcerting: should the Rembrandt really just loaf on the windowsill in a conference room? If the lending company chooses to display its repossessed artworks (which are sometimes even put on display and open to the public), it should institute much tighter security measures that are on par with museum-level protection strategies. In addition, some companies, such as ArtLoan, declare that they prefer to make loans on items that are “physically small and thus easy to store or to ship to auction houses and dealers in case of a default.” Due to their size and portability, these small objects are prime targets for theft, vandalism, forgery, and in-house theft. This “pawnshop” atmosphere flagrantly provokes art crime.

Lastly, the storage facilities of art lending companies, similar to what Dorit Straus classifies as “warehouses”, pose potential risk to the companies and to cultural heritage protection as a whole. Art Capital’s website gives clients options to keep their works “in one of [their] secure storage facilities in New York City or displayed in [their] Madison Avenue gallery space.” However, these storage facilities most likely do not have extensive security measures and do not protect efficiently against damage. Straus points out a fact about insured art in warehouses that carries over to the discussion at hand: namely, that “many warehouses provide open storage, allowing multiple artworks from a single collection to be dispersed throughout the warehouse.” Thus, art lenders run the risk of losing or misplacing art on loan due to a lack of inventory control in these open facilities. One necessary question to ask is whether the pieces that are housed in a gallery, storage facility, or in transit, are insured. The objectification of art through business transactions can create an atmosphere over time where company members stop being as cautious with the objects, becoming less concerned about damage, destruction, theft, or misplacement. 

Solutions 
Although this paper has pointed out a few areas of concern in the art market that can lead to art theft, appropriation, and the manipulation of documentation for financial benefit, there are viable solutions for preventing art crime. The first key is to broadcast a public service announcement or information campaign in print, television broadcast, and online reporting that portrays art crimes as tied to the art market to be as serious as white collar crime. In the wake of public outcry over the Bernard Madoff Ponzi scheme, it will be easier to shape the popular conception of art crimes if their implications are compared to the scale of national and international financial crimes. The second part of this information campaign should focus on drawing out the connections between art crime as tied to the art market and organized crime syndicates: in both arenas, money laundering and the use of art as collateral can occur. Linking activity that the public regards as benign, privileged, and elite to that of drug syndicates and organized crime may make the public more conscious of the potential loopholes and dark shadows surrounding art lending companies.

Another prevention strategy that hits at the very essence of most of the problems discussed above is the “de-commodification” of objects that are part of financial transactions. This, of course, is difficult to do because, after all, art lenders and art finance companies make their business turning art objects into temporary or permanent collateral for their clients. However, is there a way to integrate the aesthetic value or “psychic return” of the artwork into the overall assessment of the monetary value? If this is accomplished, this can help deter lenders from participating in immoral (and possibly illegal) greedy behaviors such as selling the repossessed art object for more than which it was originally assessed. Other preventative measures include treating art objects as precious, meaningful cultural objects in promotional material, websites, and in day-to-day interactions with clients. If daily discourse focuses on inherent value aside from numbers, this psychology may deter criminal activity. This is especially important for massive, country-wide impersonal banks with art advisory branches that grant loans. Finally, if an art lender is working with a client that is lending a whole collection or especially a portion of his/her own works (or copyrights), the lender should make it a mission for the client to be able to keep at least some of the items outright, without loaning everything. Additionally, if subjective value is assessed, then some items can be assessed as more important and prioritized to be saved from possible repossession after loan default. According to this alternative strategy, the art financier would give out loans for many “lesser-priced” items (priced according to this subjective, personal scale) instead of a few “high-priced” items and leave out the one “highest priced” (most personally valuable) item. Basically, the art lender would balance the value of the art to the client with the monetary benefit of the art to their company in order to protect against art crime: if art objects are kept with those that love them and therefore practice exemplary safety precautions, the eventual theft or vandalism that could occur if sold to another buyer can be prevented.

These ideas about how to “foolproof” lending companies from participating in art crimes can also come from the advice of specialists who seek to revamp art investment or art insurance practices. For example, just as art lending companies offer money for art, art insurers provide cash for a stolen object, which “offers some consolation, [but] […] never equal[s] the return of the actual objects.” Therefore, art lending companies should follow the same philosophy as art insurers: that “it is thus in the best interest of both public and private collections to undertake the necessary precautions to evaluate their situation with an eye towards preventing theft.” One of these “necessary precautions” is the insurance underwriting process, which assesses areas of risk to the artwork and develops prevention strategies. Dorit Straus holds up the National Endowment for the Art’s Arts Indemnity Program as an esteemed example of how efficient underwriting and risk prevention are used to “exceed even the private sector’s insurance and industry review and diligence in risk assessment.” Perhaps the National Endowment for the Arts can serve as an example to art lenders who can apply similar strategies to their “at-risk” areas such as storage spaces, galleries, and transit vehicles. Being conscious of the risk, coming up with strategies, and taking inventory of objects, are all first steps to the proactive prevention of art crime.

Art lenders can also learn from advocates of art investment reform. The art market requires an overseeing board, an umbrella organization that maintains transparency, keeps records in the public eye, and serves as a watch-dog. David Kusin, founder of Kusin & Co., an economic research firm, recommends revamping the art market by reorganizing the board of directors of various institutions and “replac[ing] the socially connected members with independent, seasoned operating executives from other sectors to improve governance.” This non-partial overseeing board could be in charge of monitoring how art is handled during financial transactions and managing the tenuous and sensitive process of converting art into monetary value, whether as collateral or as investment.

In addition to creating an overseeing board of directors, David Kusin recommends creating both a “standardized nomenclature” and “a statistically based system for capturing sector-wide transaction data in real time” for the art market. Although Kusin focuses specifically on bettering art investment in his article, these improvements can successfully inform art lending practices. Even though Kusin postures himself in this article as looking to the future when the global capital market will rebound, these changes need to be implemented right away; these measures will not only eventually respond to a thriving market, but will also improve the transparency and structure of art finance along the way. In “The Current and Future Value of Art”, Iain Robertson suggests a similar solution: the construction of an “art index” that offers comprehensive, real-time information. He notes that six dominant global indices (including the All Art Index, the British Art Market Research, the Standard & Poor 500, the American Mei/Moses Index, the Art Sales Index, and the French Art Price Index, “only offer partial price information.” He points out the importance of “serious attempts [that] are being made to bring transparency to the art market and to create indices against which international, not just industry, investors and speculators can bet.” Not only will this improve transparency of information throughout the industry, but it will also provide realistic, accurate information that may deter investors, who do not have the means to invest in art. Additionally, an accurate assessment of the risk will prevent investors from being victims of fraud. The bottom line is that the greater the financial risk and the higher the stakes, the worse it is for the fate of that art object. If information in the art market becomes just as transparent as other financial sectors, then art objects will be at less risk for being misplaced, stolen, or illegally bought as a result of investment Ponzi schemes. David Kusin warns wisely that such overarching operational “systems don’t create monopolies, disclose propriety intellectual property or reveal operational secrets, [but] the costs of continued failure to build this capacity for the art sector are untold.”

Conclusion
If the suggestions above are applied to art lending practices, the probability of art crimes occurring within the art market will most likely decline. Furthermore, these preventative measures can and should be implemented more comprehensively throughout other aspects of the art market, such as art investment, art insurance, financial bankruptcy as it applies to art, and white collar crimes, such as securities fraud, embezzlement, and money laundering. In turn, the further study of how art crime is closely tied to all of these aspects of the financial market will raise consciousness about the importance of art crime and how simple it is to stop by reforming certain elements of financial transactions. This paper has touched on several practices recommended by art insurance agents, economic scholars, and art investors and has applied them to solutions for “fool-proofing” art lending. However, this is a topic that should be explored further. It is important for all players in the art finance industry to work together to revamp these practices and to pay attention to how they as individuals help to fuel art crimes. 

The implementation of these suggestions will help improve the fiscal health of the art finance sector overall, allowing art collectors, artists, and dealers, who wish to hold onto their art objects, to avoid turning to art lenders for capital as frequently. This will help to lower the art crime rate by keeping prized possessions with those that prize them on a personal level. On a psychological level, when fiscal health improves, those participating in the art market will inevitably feel less anxiety and embarrassment when no longer required to use art (or as much art) for capital. And, happiness directly affects art crime rates. Of course, ironically, this hypothetical scenario seems to benefit most everyone in the art industry except the art lending companies themselves. However, this presents a good problem for the art world: perhaps these companies can target their businesses around “consignment financing” for art dealers, to keep money moving, and around art advising for collectors and dealers. In this way, instead of primarily granting loans and exchanging art for money, art lenders can help clients maintain their personal financial health in order to keep and protect their art.

Written by Elizabeth Sebesky

May 23, 2009

Saturday, May 23, 2009 - ,,,,, No comments

Thirteen Looted Zurbaráns

Francisco de Zurbarán (1598-1664) was one of a handful of masterful Spanish painters to take inspiration from the revolutionary style of shadows and light and realism invented by Caravaggio. Along with Ribera, Murillo, and later Velazquez, Zurburan is part of an elite group of ingenious Spanish Baroque painters who form the core of what became known as the Golden Age of Spanish Art. Zurbarán combines the drama of the Baroque, in terms of dynamic moments and theatrical painted lighting, with realism and the Catholic mysticism that has always been a part of Spanish artistry. His themes were almost all religious, and he received particular acclaim for a number of highly-realistic depictions of monks emerging from shadows.

Zurbarán was born to a Basque family in Fuente de Cantos, in the Badajoz Province of Spain. He studied painting in Seville, and worked first in Llerena, before settling back into Seville in 1629, where aside from two years of his life (1634-1635), when he painted at the royal court in Madrid, he would live and work until 1658. His popularity as a painter starting to wane, Zurbarán left Seville for Madrid, where he lived out the last decade of his life.

Zurbarán’s earlier works show the influence of Caravaggio, and the Tenebrist post-Caravaggio style taken up and made new by Ribera and Velazquez. Zurbarán’s work developed more along the lines of his fellow Sevillan and contemporary, Murillo (see entry number nine in this museum), who was wildly popular. Many critics agree that the move away from the Caravagesque and more toward the occasionally-cloying sweetness of Murillo was a shift for the worse, choosing popular sentimentality over high drama and action.

Zurbarán’s work has been the subject of high-seas adventure. In 1756 an English ship seized cargo from a Spanish vessel, that was carrying the thirteen paintings by Zurbarán, a complete series depicting the Old Testament Jacob and his twelve sons, painted 1640-1645. The captured paintings were offered for sale in England. Richard Trevor, the Bishop of Durham (1707-1771), bought twelve of the thirteen paintings for £124. But the Bishop was foiled in his attempt to buy the complete series, as the portrait of Benjamin, Son of Jacob was snapped up by Peregrine Bertie, Duke of Ancaster (1714-1778) before the Bishop made his bid. The Bishop of Durham commissioned the artist Arthur Pond to paint a copy of the Zurbarán Benjamin (seen in the image above), as the Duke of Ancaster refused to sell, quite pleased with his purchase, albeit of captured art.

In 2001 the Church Commissioners planned to sell the series of twelve paintings, today worth an estimated £20 million (a nice profit from £124). As there was a public uproar, they determined to keep the works and re-evaluate their own financial straits in 2010. But do they own the works, after all? If the paintings were seized from a Spanish vessel, rather than having been legally purchased, and then sold on, who has the current rightful title? The original Spanish owners? The Spanish government? Or did all this happen so long ago, that the current English owners should retain the rights?

May 15, 2009

Friday, May 15, 2009 - , No comments

Carabinieri Celebrate 40 Years Fighting Art Crime

To celebrate 40 years of success against art crime, the Carabinieri Division for the Protection of Cultural Heritage and Italian Ministry of Culture has planned a series of major exhibitions, in Naples, Florence, and Rome, throughout 2009. 

Established in 1969, the Carabinieri Comando per la Tutela del Patrimonio Culturale was the world’s first dedicated art squad, established in response to a rash of thefts on the part of Organized Crime throughout the 1960s, culminating in the 1969 theft of Madonna’s Nativity from the chapel of San Lorenzo in Palermo, Sicily. The Caravaggio, thought to have been stolen by the Sicilian Mafia, is still number one on the list of world’s most wanted stolen art. 

The Carabinieri are far and away the largest and most effective art police force in the world, with over three-hundred full-time agents. They also have much more to deal with, as Italy has nearly ten times as many art crimes reported per year than any other country. The Italian government has been one of the only governments to take art crime as seriously as the crime warrants, and to dedicate sufficient resources to the art police. Most countries have no dedicated art police, and those that do tend to be under-funded and receive insufficient support from their governments.

Exhibitions of recovered masterpieces will be held at the Palazzo Reale in Naples, the Museo Nazionale di Castel Sant’Angelo in Rome, and the Galleria Palatina in the Palazzo Pitti in Florence. An exhibition catalogue, entitled “L’Arma per l’Arte,” will also be published. Reviews of the catalogue and exhibitions will appear in the Fall 2009 issue of The Journal of Art Crime. 

ARCA is proud to support Italy and the Carabinieri, and would like to congratulate founding trustee Col. Giovanni Pastore of the Carabinieri for his efforts throughout his career. ARCA is also pleased to award Gen. Giovanni Nistri of the Carabinieri, with the 2009 ARCA Award for Lifetime Achievement in Defence of Art. The 2009 ARCA ArtGuard Award for Art Protection & Security will be presented to former Italian Minister of Culture Francesco Rutelli, at the awards ceremony at ARCA’s conference this July 11 in Amelia.

May 12, 2009

Tuesday, May 12, 2009 - No comments

Study Art Crime in Rome



ART CRIME
AMERICAN UNIVERSITY OF ROME OFFERS “TRAFFICKERS, THIEVES AND FORGERS”
A NEW COURSE ON ART CRIME OPEN TO THE PUBLIC

8 May 2009: Professor Noah Charney, a world renowned expert on art crime, comes to AUR for the fall 2009 semester fresh from a run at Yale University where he just offered a highly successful course on the subject. His course AH 283 - Traffickers, Thieves And Forgers: Art Crime will meet for thirteen Wednesday evenings beginning on 9 September from 6:15 to 9:15 pm in the Auriana Auditorium on Via Pietro Roselli on the AUR campus. The first lecture is free and open to the public. Those wishing to take the course for credit, as an auditor or as an attendee will be able to enroll at the first class.

Art crime has evolved from a relatively innocuous crime of passion carried out by individuals (often for ideological as much as financial reasons) into the third highest-grossing criminal industry in the world. Today’s art thieves are usually connected to organized crime and stolen art and antiquities are used to fund drugs and arms trafficking and terrorist acts. Professor Charney’s course will explore the history of art crime and its impact upon our society. It will also examine how art can be protected and recovered.

Noah Charney holds advanced degrees in Art History from the Courtauld Institute in London and the University of Cambridge in Great Britain. He has worked closely with law enforcement agencies across Europe to study the phenomenon of art crime and is the founding director of ARCA (Association for Research into Crimes Against Art) www.artcrime.info. Recently a Visiting Lecturer at Yale University, he has just joined the faculty of the American University of Rome as Adjunct Professor of Art History.

May 8, 2009

Friday, May 08, 2009 - 1 comment

In The Best Interests of Art


ARCA is pleased to present a series of researched editorials written by students of ARCA Director Noah Charney at Yale University. These students were enrolled in Charney's seminar on art crime in the Spring of 2009.

In The Best Interests of the Art
by Joel Knopf

The Elegan Marbles and the Machu Pichu sculptures at Yale pose vexing questions of how to determine art’s rightful owner, after it has belonged to many owners in many countries through many conflicts over many years. We suggested several criteria that could help determine art’s ultimate owner: its history of lawful ownership, the decision of an neutral international body, or “the best interests of the art.” I want to explore what those interests could be, using “the best interests of the child” standard in family law as a suggestive example.

When a court determines which divorcing parent should get custody of a child, or when a child should be moved from abusive parents to foster parents, it often considers which parent would better serve “the best interests of the child.” Though this standard means different things in different states, courts often consider versions of the following factors:

• The importance of family integrity and preference for avoiding removal of the child from his/her home 
• The health, safety, and/or protection of the child 
• The importance of timely permanency decisions 
• The assurance that a child removed from his/her home will be given care, treatment, and guidance that will assist the child in developing into a self-sufficient adult 
• The emotional ties and relationship between the child and his or her parents, siblings, family and household members, or other caregivers
• The capacity of the parents to provide a safe home and adequate food, clothing, and medical care  

These factors suggest what decision-makers should consider when determine who should get ownership of art. Obviously, paintings are not children; art has no interests of its own. But people affiliated with the art have interests in the art. The current owner of the art has an interest that the art not be removed from its collection. Current and past owners of the art have an interest that art be safe: that it is minimally vulnerable to weather, fire, theft, and vandalism. These parties have an interest that the art be in well cared for, which means it is cleaned, preserved, and protected as much as possible from the decaying effects of time. Artists have an interest that art be displayed, marketed, or performed according to their intentions. Society has an interest that the art be accessible to the public, and the owners, if they are museums, have an interest that the art is accessible to scholars. When a country can validly claim that a piece of art constitutes its cultural heritage, that country has an interest in the art being displayed in a place and manner such that citizens of that culture can appreciate the cultural significance of the art. Like the emotional ties and relationship between parent and child, the cultural ties and relationship between a country and a piece of art should count in determining where the art ends up.

A decision-maker should evaluate which potential owner would best satisfy these interests. In what hands will the art be maximally safe, accessible to the public and scholars, displayed as the artist intended, and able to function as a piece of cultural heritage? When these interests conflict – when, for instance, the Machu Pichu sculptures will be safer and more accessible to scholars at Yale, but better be able to serve as cultural heritage in Peru – decision-makers will have to determine which factors are more important. The security of the art should be the most important consideration, since everyone loses if the art is destroyed or vandalized. 

Decision-makers may wish to disregard certain factors in making their decision. In the family law case, Connecticut has said that the socioeconomic status of a parent should not play a role in determining child custody. Similarly, judges may wish to consider a country’s material no more than necessary in determining art’s ultimate owner. Though the wealth of a country influences its ability to protect and display art, it does not affect the significance of the art in that country’s culture. Directing decision-makers not to consider a country’s GDP (except as it relates to safety and security) may avoid charges of paternalism.  

Determining the best interests of the art is complicated. Art has many more owners than children typically have parents, and each of these owners has their own set of interests, which must be weighed against each other in a complicated equation. It is also unclear the extent to which society has an interest in art it does not own, since future generations could benefit from the continued existence of the art even if they do not own it. Despite these complications, the family law standard of “the best interests of the child” begins to suggest factors that will help us determine which potential owner will serve the best interests of the art.

April 24, 2009

April 23, 2009

Thursday, April 23, 2009 - No comments

A Michelangelo Crucifix? Perhaps...


The Italian state recently purchased a $4.2 million carved linden-wood crucifix by Michelangelo that probably isn’t by Michelangelo. In an of cut budgets and economic crisis, such as purchase might seem frivolous. Then again, Michelangelo drawings have sold for $20 million, so perhaps this is a good deal?

The main problem is that few experts seem to think that this could possibly be the work of Michelangelo. The lovely crucifix (the cross of which is missing) is dated circa 1495, when Michelangelo would have been only twenty. Some say that its delicacy is distinctive, and bears a likeness to Michelangelo’s Vatican Pieta, made when the artist was twenty-four. But most scholars worldwide cite a number of concerns regarding the attribution to Michelangelo. One, there is no known wooden sculpture by Michelangelo in existence. A crucifix from 1492 at Santo Spirito in Florence is thought by some to have been one of Michelangelo’s earliest works, but this is unconfirmed and far from the general consensus. Two, Michelangelo’s many biographers, in particular the man who idolized him, Giorgio Vasari (whose famous biography of Renaissance artists, The Lives of the Artists was written so as to feature Michelangelo as the culmination of centuries of artistic geniuses, the chapter on Michelangelo being many times longer than any other artist) does not mention either the construction of this crucifix or any work in wood by Michelangelo. It is true that half to two-thirds of all artworks by pre-Modern artists that we know once existed (from references to them in contemporary documents, contracts, diaries, biographies, etc) are considered “lost:” a piece of optimistic art historical terminology that suggests that the works might have been destroyed or just might be found—so the re-emergence of works by great artists is entirely plausible. However it is rare indeed that a work that is never mentioned in any extant document should suddenly appear.

This debate raises interesting questions about the value of artworks. The value of art is non-intrinsic—unlike jewelry, the component parts of which are of quantitative value, art is usually wood and canvas and stone that, without the craftsmanship of the artist, would have little or no value. A pile of wood and canvas and pigment is worth little, but assembled into a painting by Picasso, it is worth millions. There is a good deal of non-malevolent wishful thinking on the part of members of the art world. The art world as a whole benefits if objects newly on the market prove to be both authentic and legally-acquired (read as “not stolen”). The owner makes a fortune in selling their treasure. The middle man (dealer, gallery owner, auction house) gets a commission. The buyer gets a trophy. Scholars get a new treasure to study, the public a new bauble to admire. If the work in question turns out to either be a fake, misattributed, or stolen, then everyone loses out—the only beneficiary is an abstract sense of justice having been done, the truth having emerged, to the financial loss, and loss of face, of many. There is, therefore, a subconscious desire on the part of much of the art world to will works like this crucifix to be by the hand of master artists. On the other hand, the skeptics, particularly academic skeptics, can make a name for themselves by denouncing the optimistic attribution. When it comes down to it, the value of works of art is a combination of authenticity, demand, and rarity—but the key to all components is that value equals perceived authenticity, plus perceived demand, plus perceived rarity. Because of the non-intrinsic value of art, perception is everything. This often results in interesting tugs-of-war between various scholars and members of the art trade. And a new treasure by one of the greatest artists who ever lived hangs in the balance.

April 15, 2009

Wednesday, April 15, 2009 - ,,,,,, 2 comments

New Book on the Theft of the Mona Lisa Misses the Mark—and Reality

The Crimes of Paris: A True Story of Murder, Theft, and Detection by Dorothy and Thomas Hoobler (Little, Brown and Company, 2009) professes to tell the real inside story of the theft of the Mona Lisa and begins by mis-spelling the name of the thief. Vincenzo Peruggia spells his name with two “gs,” as may be seen in the widely-published mug shot taken of him by Italian police, after his arrest as he tried to return the Mona Lisa to Italy, after having stolen it from the Louvre. It is rather baffling, then, that the authors of this new work of non-fiction chose to spell the thief’s name with only one “g.” The odd choices do not stop there.

It is perhaps surprising that the complete story of the theft of the Mona Lisa, certainly the most famous art theft in history, has never been the subject of a book of non-fiction. It is mentioned in a number of works, but an in-depth monograph is still wanting. The Crimes of Paris professes to fill that lacuna, and its publishers were optimistic—an excerpt was featured in the May 2009 issue of Vanity Fair. (Another new book of 2009, Vanished Smile by R. A. Scotti, also hopes to tell the story—we’ll see if the author can do better). While the account of the theft and recovery of the Mona Lisa is accurate and reasonably well-written, the supposed true crime conspiracy that the authors have uncovered and present in their work, regarding forgeries of the Mona Lisa and a mastermind called the Marquis de Valfierno who was behind the whole plot, is a load of hooey. The sole source of this conspiracy, a 1932 article in The Saturday Evening Post by American journalist Karl Decker, was dismissed decades ago by all scholars worthy of the name as a wholesale invention—and one so outrageous that it is difficult to understand how anyone could believe it to be true.

Decker claimed to have met a con man named Eduardo while in Casablanca. Eduardo proceeded to tell Decker about his forgery ring in Buenos Aires and Paris, selling American millionaires copies of paintings that he told them were stolen originals. This Eduardo, who also went under the alias the Marquis de Valfierno, claimed that he had hired Peruggia to steal the original Mona Lisa in order to convince six separate American millionaires that the forged Mona Lisa that they were buying from Valfierno was the stolen original.

The Valfierno story was long ago rejected as one of two things: either a wholesale invention by Karl Decker to sell his story, or a wholesale invention by a con man in Casablanca that pulled the wool down over Mr Decker’s eyes. It is a shame, then, that a work of non-fiction professing to tell the true story behind a famous true crime, should so mislead its readers. Without the addition of myth, the story of the theft of the Mona Lisa is rich and enthralling, with a fabulous cast of characters (including Picasso, Apollinaire, and a fascinating French detective), the backdrop of pre-war Paris and Florence, and ripples felt to this day. For not only was the theft of the Mona Lisa the most famous theft of any object in history, but it also inspired other thefts, altered the concept of what makes a work valuable, and proved to be a turning point in the history of art, of collecting, and of art crime.

The book is worth reading for its solid if stolid account of the theft and recovery of the world’s most famous painting. It also covers the backdrop of Paris in the ‘teens, with a variety of characters sketched into what is more a pastiche of a period in time than a thorough exploration of one crime. In terms of setting the scene, painting the atmosphere of a time and place, the book succeeds nicely.

But it is, of course, the art crime that is of greatest interest to this review. The Hooblers’ tale of the Mona Lisa theft would have done well to have ended without the addition of Valfierno—and it would have been nice to have spelled the name of the protagonist correctly. Trying to shoe-horn a myth into one of history’s great true stories poisons the portions that are true, and cultivates the misconceptions about art crime that already abound.

March 29, 2009

Sunday, March 29, 2009 - ,, No comments

Lawsuits Abound, Defensive and Offensive

"Night Cafe" Van Gogh 1888

In recent days we have seen a number of high-profile art law suits, both criminal and defensive. Yale University filed for a defensive law suit, to secure its ownership of the star painting in its Yale Art Gallery, the iconic "Night Cafe" by Van Gogh (1888). There have been many headline-grabbing lawsuits brought by grandchildren of the victims of Nazi or Stalinist seizure of artworks, who have filed to have works restored to them, plucked out of museums and private collections. (The dramatic story of the restitution of Malevich paintings will be featured in the first issue of ARCA's Journal of Art Crime). Now we begin to see storied institutions donning legal battle armor in anticipation of a potential lawsuit.

The issue at Yale is with Pierre Konowaloff, the great-grandson of wealthy aristocrat Ivan Morozov, who owned Van Gogh's painting in 1918. The Russian government nationalized and appropriated Morozov's property during the Communist revolution--including the painting, which was later sold by the Soviet government. "Night Cafe" has been hanging in the Yale Art Gallery for more than five decades. In 2008, Konowaloff's attorney asserted his client's ownership title to the painting, and Konowaloff has publicly stated that he wants the title of the painting transferred to the Russian nation, and that he wants to receive financial compensation. Yale declared that it wishes to "remove any cloud over its ownership," pre-empting a suit on the part of Konowaloff to reclaim the painting.

Between an art theft from Yale's Slifka Center linked to a drug and arms dealer, a lawsuit from the descendants of Geronimo to reclaim the skull of the warrior chief that they claim was looted by members of the secret society Skull & Bones and is being used in the society for rituals, and this recent furor over "Night Cafe," Yale has provided a petri dish for the study of art crime over the past two months alone.

March 24, 2009

Tuesday, March 24, 2009 - , No comments

Yale Stolen Paintings Recovered

Three stolen works of art were recovered, along with nearly 40 other stolen paintings, firearms, heroin, marijuana, and cash, in a New Haven home. The three artworks, two paintings and a drawing, had recently been stolen from Yale University's Slifka Center, taken on two different days from an exhibition inside. The recovery is important both to highlight the nature of most art crimes worldwide (which involve lesser-known works of art than the headline-grabbing heists most people expect), and the link between art crime and the drug and arms trades. Even with a relatively small-time crook, such as the local New Haven heroin dealer who had stolen art, guns, and drugs in his home, the connection between art theft and "more serious" crimes is evident. 

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