Stolen Art Watch, ALR, Art Loss Racket, When will the art market learn?

Who’s Afraid of Julian Radcliffe?

Alessandra Massameno

17 September 2016

A word to the wise: You should be afraid of Julian Radcliffe; if not by name, then by title of his organization, the Art Loss Register. The concept is innocent enough, if not noble—ALR is a database of lost and stolen artifacts whose purpose is to return those works to their rightful owners. But is it the organization’s sole purpose? Mr. Radcliffe, a man whose reputation precedes him, would have you believe so.
A cursory understanding of Julian Radcliffe’s intentions might conjure the image of Robin Hood, a man of the people if ever there were one. It’s especially true when you consider a case like Maria Altmann’s.
Altmann’s Aunt posed for Gustav Klimt’s Portrait of Adele Bloch-Bauer I. In a Nazi-occupied Vienna, the painting was confiscated; it wasn’t until 1998 that Altmann sought restitution from the Austrian government. Her story, famously recounted in The Woman in Gold, inspires the fervent belief that a database of stolen art is imperative to justice. I’d tell you how Altman’s case resolved, but I’d hate to ruin a good ending.
Here’s where Radcliffe’s likeness to the noble Robin Hood diverges: He believes there’s a finders’ fee attached to justice. As with any privately owned company, it’s unlikely that ALR works solely on a pro bono basis. A car, after all, can’t run on fumes. But the means, by which, the Art Loss Register profits, leave something to be desired in the way of ethics.
In order to register your lost or stolen artifact with ALR, you must pay a small fee; that’s understandable. “Any uniquely identifiable item can be registered online. Loss registrations are charged on a basis of £10, US$15 or €15 per item (plus VAT where applicable), but please contact us directly in case of a large theft.”
What constitutes a “large theft,” you ask? Either a shipping-crate’s worth of artwork has gone missing, or you’re looking to list a big-ticket item.
As with any theft-retrieval company, the cost of its services is assessed on a case-by-case basis. If ALR successfully recovers the item that you’re looking to list on their database, their commission depends on the market value of the item at the time of recovery—also, not entirely surprising. Here’s where it gets a bit murky: Julian Radcliffe might approach you, regarding a lost or stolen piece of art on which, he happens to have some invaluable information; the keyword, being invaluable.
While Robin Hood might be inclined to offer such information to you gratis, Radcliffe makes no such promise— in fact, he can hold the information for ransom and has been known to do so. While some art dealers call Radcliffe’s acts extortion, no government agency in the U.S. (or across the pond, for that matter) has intervened.

Though it waddles like a duck and quacks like a duck…

The Art Loss Register is not a government-funded agency, which leaves Radcliffe virtually unchecked in the tactics he employs. Luckily, the recovery of your painting might pay some dividends to you as well; or at least, such was the hope for Jack Solomon.
Norman Rockwell (1894 - 1978) Russian Schoolroom 1967 - Oil on Canvas
In the spring of 1973, a Mr. Bert Elam purchased Norman Rockwell’s Russian Schoolroom from Arts International Gallery. Only days later, the painting was stolen in a smash-and-grab. While we’d all like to imagine a Thomas-Crown-esque character, scheming away in his lair, art heists are often tactless thefts, requiring little more than a baseball bat for the window and a getaway car; in fact, you could probably use your Uber driver and the tire iron he’s required to keep in the trunk.
Elam enjoyed what might be the shortest-lived ownership of a Rockwell—a painting that would eventually be hanging in Steven Spielberg’s living room. We’ll come back to that.
Before being consigned to the Arts International Gallery, Russian Schoolroom was in the possession of the now deceased Mr. Solomon, who purchased the painting in 1968. A 1972 catalog, assembled by Bernard Danenberg Galleries, cites the painting as part of Solomon’s private collection. A year later, when the painting sold at exhibition for $20,000, the Clayton, MO police report named Elam and Arts International Gallery as the sole victims. The gallery returned Elam’s money and collected insurance on the stolen Rockwell.
While it would appear that ownership of the painting in question transferred to the gallery upon consignment (as per the police report), Solomon would later assert his claim of ownership. This much is clear: Solomon was properly compensated.
Fast-forward to 1975, when Martin Diamond of Danenberg Gallery writes a note to Solomon, inquiring about Russian Schoolroom: “Even though you don’t own it, can you get it for me?” he asks. Diamond was compiling a list of owners in preparation for a Rockwell exhibit; Russian Schoolroom was listed under Solomon’s name— its location? Unknown.
While Diamond could simply be a terrible record keeper, this is the first of many clerical mistakes in Solomon’s favor, just ask the FBI (again, we’ll circle back to this). Meanwhile, Judy Goffman Cutler begins her nearly decade-long research into Russian Schoolroom. The painting will have been off the radar for nine years before resurfacing at a New Orleans auction, where Goffman Cutler snatches it up. After all, she’s done her due diligence in making sure that the purchase is viable.
1988 November, 25 Russian Schoolroom illustrated in Antiques and Arts Weekly, page 66, ‘Auction Action in New Orleans, La.’ ‘Rockwell brings $70,400’

The FBI and Spielberg walk into a bar…

Where do their paths converge, you ask? Well, the FBI (like any other government agency) is fallible. Russian Schoolroom was coming up on the auction block at Morton Goldberg’s New Orleans auction house. When the FBI came knocking on Solomon’s door on October 7^th, 1988, they failed to realize that he no longer factored into the equation.
But Solomon saw an opportunity—fully aware of the impending auction at Goldberg’s, he sat back and waited. The FBI had fortuitously tipped him off, just twenty-one days before the sale of Russian Schoolroom, which they decided would not be seized from Goldberg. Interestingly enough, they didn’t think it a worthwhile endeavor to find out who had consigned the painting to the auction house— the presumptive thief. Satisfied that they’d done their job, recovering the stolen painting, they washed their hands.
In ’89, Ms. Goffman Cutler sold Russian Schoolroom to Spielberg, a collector of Rockwell’s, for $200,000. Sixteen years later, an “anonymous” tip alerted the FBI to the theft of the painting back in 1973 (a moot point) and suddenly, they were banging down Spielberg’s door.
While it seems redundant for the FBI to have reopened the case, it didn’t stop Radcliffe from going to the mattresses on Solomon’s behalf (after the case was brought to his attention by Solomon). Though the FBI would later withdraw its claim (again) that Solomon was the rightful owner, their blunder gave Solomon an arguable claim of ownership.
Can you get it for me?
Under Radcliffe’s advisement, Solomon filed suit against Spielberg and the FBI as they’d failed to recover his painting. Ms. Cutler traded Spielberg Peace Corps in Ethiopia for Russian Schoolroom (apparently, Rockwell’s are the baseball cards of the wealthy) in order to protect him from the dispute. Solomon, who by then had registered the painting with Radcliffe’s ALR, pursued his suit for the painting—now, against Ms. Cutler.
This trade, in all seriousness, was only possible because of Ms. Cutler’s years of experience and expertise as both a Norman Rockwell dealer and collector; she was uniquely qualified to replace Mr. Spielberg’s painting with another Rockwell that reflected the appreciative value of Russian Schoolroom over the course of the 16 years that had passed since Spielberg had bought the painting. Ms. Cutler’s act not only fully compensated, but kept Spielberg’s investment intact while protecting him from Solomon’s lawsuit.
When Cutler inquired as to whether Russian Schoolroom was registered with ALR, Radcliffe skirted the issue; he refused to disclose that information, which seems entirely at odds with the purported purpose of the Art Loss Register.
While he clearly had no claim to the painting, Radcliffe was more than happy to fight Solomon’s battle for him with the expectation that a hefty settlement would follow. Though Radcliffe’s attempt at recompense failed miserably, it says something that he was even willing to attempt the slight of hand.
What it says, exactly, we can’t won’t say.
Despite its illustrious past, Russian Schoolroom seems to have found its home in Rhode Island; it hangs triumphantly in the National Museum of American Illustration, founded by Goffman Cutler and her husband. We hope it’s there to stay.
Julian Radcliffe - Art Loss Register
As for Radcliffe, he’s the majority shareholder of ALR. The additional stakeholders are Christie’s and Sotheby’s auction houses; while a predictable alliance, the U.S. Department of Justice views their tea party as collusion and therefore, illegal.
Radcliffe leaves in his wake an abundance of disgruntled art dealers, but for the most part, people are willing to overlook his behavior—ALR is the most comprehensive database of its kind, after all, and until that changes, Radcliffe will keep doing what he’s doing, free of any legal repercussions—so far, at least.

Should the art market be more transparent?

In recent years, global media coverage of multi-million dollar auction prices, combined with the rise of art as an alternative asset class, has focused more attention on the international art market than ever before. That increase in awareness has brought the issue of transparency to the fore, but what exactly do we mean by it? To the public – the market’s client base – transparency largely means more clarity about terms and conditions, pricing, and consumer rights when buying and selling. However, to politicians, interest groups, the media, and the many and varied corners of the market itself, concerns over transparency focus on a far wider range of topics: provenance, finance, crime, and market manipulation, to name the most obvious. The general attitude seems to be that improved transparency will boost confidence and reduce the risk of things going wrong.

With the trade in antiquities, concern gravitates towards looting and fakes, with money laundering and theft following close behind. With finance around high-end auctions, critics argue that a lack of transparency allows auction houses, dealers and collectors to skew the market to give themselves an unfair competitive advantage or create bubbles to sustain their holdings in artworks that might otherwise decline in value. For the trade, though, increased transparency can cause problems. Thanks to the internet, it is far easier for potential buyers to find out what a dealer paid for an item, making it much more difficult for them to cover their costs and sell at a decent profit; most buyers are not interested in the time, effort, expertise, or the restoration, transport or other costs that the dealer has to account for in acquiring the item, as these are not seen as contributing to its value. How justified are such concerns, and what should be done?

 

Let’s deconstruct all of this a little. Every transaction really only has four key variables: the buyer, the seller, the goods, and the money. Each brings its potential to the deal, and its risks. Due diligence on behalf of both buyer and seller can tackle much of that risk, but not all of it. How can you be absolutely sure where the buyer’s money comes from? How robust is the seller’s paperwork? And who exactly are they? Surely the answer is to regulate the art market directly, like the worlds of finance, insurance, and the law, so that officialdom can intervene where necessary and public confidence in honest trading does not have to rest on what some view as little more than a person’s word?

The first thing to understand is that hundreds of laws already regulate the market (you can download the list that applies to the UK art market from the British Art Market Federation website), but experience tells us that direct regulation rarely solves the problem. The establishment of the Conseil des Ventes in France in 2000 to govern the market once France liberalised its auction laws did nothing to prevent the cols rouges scandal at the Drouot auction house nine years later, where the closed shop of portering services masked a criminal network of theft. Nor did the Wine Investment Association’s establishment of a rigorous code of practice in 2003 prevent people from falling victim to rogue funds in the years that followed. Then we have the age-old issue of what exactly art is: if you can’t define something clearly, then you can’t legislate for it effectively.

But more pressing, perhaps, is where questions of art market transparency overlap with debates about public interest and the right to privacy. If politics is to intervene here, then the lawmakers as a whole need a better understanding of how to balance public interest with the practical needs of business. That means consulting trade professionals to a far greater degree than happens now, rather than relying on the opinions of academics and those lobbying against art market interests. We also need more consistency on codes of practice across trade associations, as well as with legal definitions for cultural property, what constitutes art and other loose terms. Then we will all have a clearer idea of where we stand.

 

In addition, the market needs to educate the public better on why, sometimes, more clarity is not possible. For instance, one proposal to improve transparency has been the introduction of object passports listing all previous owners of items to show that they have changed hands legitimately.  A nice idea, maybe, but largely impractical as few legitimately traded objects have such detailed paperwork to go with them. On top of that, Baroness Neville-Rolfe, the minister guiding the Cultural Property (Armed Conflicts) Bill through the UK parliament, recently declared that creating such passports might breach Article 8 of the European Convention on Human Rights, which covers the right to privacy. In 2014, in a case involving the auctioneers William J. Jenack, the New York Court of Appeals overturned a New York Supreme Court ruling that an auction contract was null and void if it did not name the seller. The court clearly recognised the damage this would do to auctions and declared that having the auctioneer’s details on the paperwork as the agent of the seller was good enough.

I have always believed that the most effective way of getting people to change their behaviour is to show them why it is in their interests to do so – and enlightened trade professionals are already demonstrating how and why this should be done. Online aggregator Barnebys has just published research showing that transparency online at auction, along with ease of bidding and post-sale fulfilment, is the most important factor in building brand trust and improving sell-through rates. ‘The new generation of buyers and sellers expect all information to be easily at their disposal, without any barriers,’ says Barnebys co-founder Pontus Silfverstolpe. ‘Withholding information, such as final prices, foments distrust and alienates users.’ Anna-Karin Laurell, CEO of Scandinavian auction house Bukowskis, echoes this sentiment: ‘Transparency and [improved] function increases credibility. Through our new website we have also reached new target markets we previously believed were very hard to reach – the youngest between 18–25.’ The Hiscox Online Art Trade Report 2014 concurs, while its 2016 report highlights the growth in businesses that are improving access to art market information online while simplifying fulfilment services.

 

Enhanced condition reports for online auctions, accompanied by excellent images, certificates of authenticity, and a clear summary of all charges are the building blocks to buyer confidence and brand trust for sellers and their agents. So you may not know exactly who you are buying from, but if the auction site handling the transaction effectively underwrites it with all of the above, then it is a form of transparency that ought to address many buyers’ concerns. This reflects the appeal court ruling in the Jenack case.

Having assessed auction websites professionally for nearly 20 years, my first and most important test is how easy it is to find the buyer’s premium rates. If there is any difficulty at all with this, I simply will not buy from that auctioneer, nor recommend them. Newly launched Forum Auctions have made a virtue of publishing exactly what their charges are at the top of their advice page on buying, and they also promote a set of core values, including a pledge on dealing with complaints promptly and fairly. It’s a simple, cost-free and uncomplicated piece of marketing that immediately promotes confidence. It is also a wise move because the Advertising Standards Authority has just launched an investigation into charges at auction, including whether buyer’s premium rates, VAT and other charges should be reflected in auction estimates.

The transparency issue is not going to go away. The market needs to regulate itself better if it is to keep the legislators off its back. It also needs to be better organised and more proactive in developing relationships with government. If the UK industry is serious in this, it needs to increase funding to its lobbying arm, the British Art Market Federation, by a factor of ten. The US would do well to follow suit.