Wednesday, December 11, 2013

UPDATE: New York Times' Roberta Smith, you were right. Case: Dallas Museum of Art's integrity drowned by money

     The Council of Artists' Rights recently sent out an email UPDATE to inform and educate the taxpaying public about U.S. public museum issues.  Here's  the email:

UPDATE: New York Times' Roberta Smith, you were right. Case: Dallas Museum of Art's integrity drowned by money

December 2, 2013 

Dear ally of artists' rights:     

     Since launching our eblast ten days ago, we have subsequently learned that an independent third party has exposed to the world the fatal flaw in the charitable donations structure that was passed into law in 2006. That loophole in the law allowed some prominent Dallas families to sell off promised artwork that ostensibly was part of the permanent collection of the Dallas Museum of Art. 

     Those donor families in 2005 had gifted their $400 million art collections to the DMA as a so-called "irrevocable bequest." And the following year the DMA featured 300 of those works in their museum exhibition, "Fast Forward: Contemporary Collections for the Dallas Museum of Art." It published a lavish catalog praising the generosity of the donors.  But not long after the exhibition ended, two pieces were forever pulled from the museum's future and sold for a combined $57.2 million. Those transactions allowed private art market speculators to reap a financial windfall at the expense of U.S. taxpayers via a public museum and its secretive private partner, the Foundation for the Arts.  Recently the FFA was tied to the museum in a DMA press release when some looted antiquities were returned to Italy.    

     Writing for Columbia Journal of Law and Arts in May of 2013, Harvard educated Alicia C. Beyer detailed the legal--but ethically untenable--charitable donation structure that was part of the Pension Protection Act of 2006. Beyer has since moved on to become a U.S. federal tax law expert in the private sector.    

      On pages 481 and 482 of Beyer's analysis, Gone but Not Forgotten: The End of Fractional Giving and the Search for Alternatives, she wrote, "Nevertheless, museums have made some major acquisitions, demonstrating the potential of this donation structure despite its shortcomings. For example, the Dallas Art Museum recently acquired the $2.5 million Gehard Richter painting Stadtbild Mü jointly with two major donors. This work was a significant addition to the museum's already exceptional Richter collection, as the painting is a prime example of the influence of World War II on Richter's work."  

     Stadtbild Mü, like the Jeff Koons Balloon Flower (Magenta) 1995 - 2005, and the Mark Rothko, Untitled, 1961, were part of the $400 million alleged "irrevocable bequest." All three works were included in the DMA's hefty five-pound catalog.  The Koons and Rothko work got pulled from the DMA's future and sold on the private art market for $25.8 million and $31.4 million, respectively. Obviously, millions of dollars in profit went to the art collectors; because the sales were private, the names of other profiteers in that network remain in the shadows. 

     What remains to be seen is whether or not Stadtbild Mü, too, gets yanked from the DMA and sold by a whole different group of art market speculators. Again, there is no guarantee this sale, and many others to follow, will not happen; these are merely temporary promised gifts accruing much financial prestige via the DMA.     

     Beyer goes on to say, "But, unlike fractional gifts, which give the museum a property interest at the time of the initial gift, promised gifts are just a promise.  Thus, there is always a danger that the donor will renege on promised gifts.  Indeed the enforceability of a donor's promise is often an open question.  While section 90 of the Restatement on Contracts provides that a charitable pledge is binding, even in the absence of consideration or reliance, many states do not follow the Restatement, leading to variability in the enforceability of those promises. Furthermore, museums generally do not want to need to sue donors or their estates to enforce promises (emphasis added)." 

     So, is the tax-paying public being served by its public museum, the Dallas Museum of Art and the private Foundation for the Arts, while the museum's intransparency allows shrewd art investors to pull valuable artwork--and sell it--from the museum's "irrevocable gift" inventory?


U.S. Senator Charles "Chuck" Grassley            via U.S. Postal Service
135 Hart Senate Office Building                        7013 1710 0000 4144 0117  
Washington, DC 20510                                      Certified Mail
Tel. (202) 224-3744
Fax: (202) 224 6020