What's Love Got To Do With It?

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Welcome to the new art world, where collectors no longer buy for passion and joy, but for bragging rights and asset diversification.

This is one of those eyebrow-raising—or, as it may be, bone-chilling—stories that happen every so often in the inner sanctum of the art world, where hucksterism goes hand in hand with acquisitional gluttony and the authentic love of art is sometimes hard to distinguish from the latest form of tulip fever. It is about allegations of malfeasance at the highest level, involving a blue-chip dealer from one of the most reputable galleries in New York; ostensibly discerning, but gullible, collectors; and a raft of expertly rendered forgeries. 

I’m referring, of course, to the recent Knoedler scandal, in which two dozen paintings were sold as the authentic work of American masters such as Mark Rothko, Willem de Kooning, Richard Diebenkorn, and Robert Motherwell, only to turn out to have been painted by a septuagenarian Chinese American living in Queens named Pei-Shen Qian, who is said to have studied at the same school as Rothko. (“I wish I’d met him,” says Joan Washburn, a veteran of the art community, “because you could have an exhibition of the history of Abstract Expressionism by one artist.”) 

The paintings were peddled to Knoedler by a pair of art dealers from Long Island, Glafira Rosales and her former boyfriend Jose Carlos Bergantiños Diaz. The sales of these forgeries went on for more than 14 years and generated more than $60 million. In 2011, Knoedler & Company, then the oldest gallery in New York and considered by many to be the gold standard, closed amid a sprinkling of lawsuits. 

Cut to this past January and February, when these alleged pernicious doings were exposed to the glare of public scrutiny thanks to a civil trial that involved a couple, Domenico and Eleanore De Sole (he is the chairman of Sotheby’s board and Tom Ford International), who brought a lawsuit against Knoedler and its former director Ann Freedman. The painting in contention was a large Rothko, which the De Soles bought for $8.3 million in 2004; the gallery had originally paid $950,000 for the work. “It was the most expensive piece we had ever bought...,” a distraught Eleanore said on the stand. “To be able to have a Rothko oil is very privileged...”

The painting was mounted behind costly glass and proudly shown off to friends of the couple at their home in Hilton Head, South Carolina, for almost seven years, until its authenticity became disputed. The De Soles claimed that Freedman knew the black-and-red Untitled, 1956 they bought was fake and were seeking $25 million in damages. After leading art historians and academics, such as John Elderfield, Irving Sandler, and Jack Flam, as well as the children of Rothko and Diebenkorn, were brought in to testify on behalf of the plaintiffs, creating a convoluted and unflattering portrait of the art world, the case against Freedman was settled on February 7, for an undisclosed sum—without Freedman, who had joined Knoedler in 1977, admitting any guilt. Rosales pleaded guilty on related charges in 2013 and is awaiting sentencing; Qian has fled to China. “I hope someone tracked him down and put him in business,” says Christopher Mason, who wrote The Art of the Steal, a book about price-fixing at Sotheby’s and Christie’s. “He did a cracking good job.” 

For all the stratospheric amounts of money that get tossed around, the art universe has always been a secretive and clubby place, filled with equal amounts of pretension, genuine connoisseurship, and competitive innuendo. “People in the art world can’t wait to say something negative about somebody else,” says Richard Golub, an art-world litigator. Collectors generally look down their noses at other collectors, and it’s hard to find a dealer who speaks well of another dealer, no matter how high they are on the food chain. In the course of my interviewing, no less a sacred cow than the late Swiss dealer and curator Ernst Beyeler (whose namesake museum, in Basel, is considered to be a gem) was characterized as a “crook” by an otherwise decorous-seeming dealer who seemed to know whereof she spoke. Despite the blaze of insider gossip the De Sole case evoked, when it came to trying to ferret out what might have really happened, suddenly all went quiet on the Venice-Basel-Miami-Frieze front. Several art-world players, the dealer David Zwirner and the collector Jerry Speyer among them, declined to be interviewed. One or two, like the gallerist Jeanne Greenberg Rohatyn, didn’t return my calls. Another, who sits on the board of New York’s Whitney Museum of American Art, told me sternly that she didn’t agree with the premise of my story before I even had one, adding that “art is not a monolith” and “collectors are not greedy.” In the end, only a few brave souls were willing to go on the record; the De Soles themselves were out of the country and unavailable for comment.

Although spectacular in the sheer level of its deceit, the case raises larger questions than the whodunit variety: How, for instance, did the scam go on for as long as it did, and why did nobody sound the alarm? And what is one to do with the fact that several dealers told me that Freedman had been suspected of selling fakes and providing false pedigrees for years and that “people were just waiting for the whole thing to unravel”? (“Ann believed in these paintings,” insists Freedman’s lawyer, Luke Nikas. “She showed them to the entire world and bought three for her personal collection.”)

It all left me wondering whether the 67-year-old schoolmarmish-looking woman with gray curls who stands at the center of this brazen piece of skullduggery really is an anomaly, as many of her associates would have it—a single bad apple in an otherwise flourishing orchard—or whether she exemplifies something far beyond herself that points to an endemic rot at the orchard’s core, something having to do with the inherently problematic aspects of the way art is marketed and sold. 

Prime among these aspects is authentication, the intricate but essentially wobbly process by which a work of art said to be by Artist A is proven to be made by that hand. Authenticating a painting depends on both the persuasive nature of a work’s appearance (does this look like a Rothko?) as well as its provenance, a chain of ownership that goes back virtually to the moment a work of art first leaves the studio where it was created. The latter is established mostly by sales records and other forms of documentation, such as a work’s inclusion in a catalogue raisonné (these take decades to pull together and involve a huge amount of research) or other books about the artist. But, hazardously enough, provenance can also be invented with only minimal effort; if you tell a potential purchaser that the Rembrandt etching you’re selling came to you as part of your inheritance from your affluent uncle who died in Cleveland 30 years ago, who’s to know better? 

In the De Soles’ case, the Rothko, like the other forgeries, was said to have belonged to the son of an unnamed Swiss collector, simply referred to as Mr. X, who, it was further claimed, had bought the Rothko directly from the artist in the 1950s. Freedman also provided a list of 11 experts who had allegedly authenticated the painting, including noted British scholar of Abstract Expressionism David Anfam, who authored the catalogue raisonné for Rothko’s works on canvas. At the time of the sale, the couple saw no need to investigate the provenance any further. “I went to the best gallery in America. I had absolutely no reason to believe that I wasn’t being careful,” Domenico said in his court testimony. 

This brings us back to the seemingly unregulated nature of the art market itself, where government oversight appears to be nonexistent and much is negotiated on the basis of a handshake and a dealer’s imprimatur. All of this leaves too much room for unscrupulous salesmanship and outright mendacity. “Provenance is always shaky and always incomplete,” asserts Golub, the litigator. “It’s the great unkept secret of the art world.” The near impossibility of detecting expert forgeries has led the estates of several prominent artists—including Jackson Pollock, Roy Lichtenstein, Andy Warhol, Keith Haring, and Jean-Michel Basquiat—to refuse to authenticate previously unknown works for fear of legal action. 

Another critically important issue—and, I was given to understand, the main reason that no one stepped forward to question the paintings earlier—is that the art world is sufficiently litigious to have silenced those who would have otherwise spoken up. “I can get sued,” one dealer told me, “for expressing an adverse opinion—which is why so many people saw those works and didn’t say, ‘I’m not sure; you should check.’” An art consultant concurred, “To say anything, you risked being sued for loss of value. You have to go to court and it costs huge amounts of money; that kept people quiet. The collectors finally went after her....That’s why it took so long, and even once it was in motion, there were a number of collectors who settled.” Nikas, Freedman’s lawyer, counters, “Some of the most prominent art dealers, as well as Christie’s, also sold paintings from [the supposed Swiss collector’s] collection.” 

Out of ten lawsuits brought against Knoedler, five had already been settled at the time of the De Soles’ trial. Angered and embarrassed, with reputations to maintain, the De Soles set out to be different. They wanted Knoedler’s business dealings aired for all to see. 

The art world has long been a place where unadulterated creative passion mixes with the worst kind of greed. It begins, after all, in a realm of relative purity—with the vision and talent of the (usually lone) artist working in his or her studio, with what Jean Cocteau, speaking of the work of Velázquez and Goya, described as “the disconcerting simplicity of genius.” Although assuredly not all artists are geniuses, one can safely assume that most of them aspire to create something that engages with the aesthetic moment—and might, at best, outlast it. Some, like the melancholy but messianic Rothko, aim for the stars: “I’m interested,” he contended, “only in expressing basic human emotions—tragedy, ecstasy, doom, and so on—and the fact that lots of people break down and cry when confronted with my pictures shows that I communicate those basic human emotions. The people who weep before my pictures are having the same religious experience I had when I painted them.” Although it is true that Eleanore broke down when she discovered her Rothko was likely a fake (on the stand, Domenico spoke of hearing her screams from the shower), I would be hard-pressed to summon up people who respond so viscerally when faced with an example of his work. (The one exception I can think of is a Christie’s auctioneer who was moved to tears by a collection of Rothkos at a mutual acquaintance’s apartment, although it was unclear to me whether it was the aesthetics or the potential resale value that got to him.) All the same, there can be no gainsaying the transformative power of a work of art that speaks to the viewer, whether it be a Rothko or a painting bought for $800 at a local art fair. The difference lies in the investment value and bragging rights that come with owning the former versus the unacclaimed pleasure that comes with owning the latter. Both parties, in their way, might be said to be collectors, but only one of them will gain in social prestige and financial status because of his or her purchase.

The hard-and-fast commodification of art is not in itself a new phenomenon, but the overheated quality we have come to associate with sales of contemporary art is fairly recent. “For six months in 1968,” writes Michael Findlay, a director at New York’s Acquavella Galleries, in his excellent book The Value of Art, “a new painting by John Baldessari...hung behind my desk priced at $1,200. There were no takers. It sold at Christie’s in May 2007 for $4.4 million.” This curious fever dream probably began in the late ’60s and early ’70s, with Warhol—a recent exhibit of his silkscreens at Sotheby’s was called, point-blank, “Andy Warhol: Money on the Wall”—and went into high gear in the ’80s, with the generation of Julian Schnabel and David Salle. (It’s worth noting in this regard that galleries didn’t start hiring public-relations firms until the late ’90s.) 

What seems clear is that this development has reached some kind of apotheosis in the early years of the 21st century, when art has become “part of the luxury-goods system,” as Findlay puts it. Another way of saying this is that art has become just another covetable bauble, like the ones that twinkle from the windows of Tiffany, eliciting paroxysms of desire. “Some avid collectors may profess great love for their objects,” observes Mason, the Art of the Steal author, “but in the end it’s about strategic commercial transactions.” 

Nowadays, the hunger for trophy art is at an all-time high, what with the concentration of wealth in fewer hands and the need for asset diversification becoming equivalently intense. As investors become more mistrustful of financial ventures, and distressed world currencies don’t offer a tempting alternative—“Who wants to own all those rubles?” quipped one savvy hedge funder I spoke with—art becomes the place to be. “You can’t make money with money right now,” the hedge funder went on to explain, “so if you’re looking for diversification that is also pretty... Added to which, the art market is above any specific currency.” This reason goes a long way to explaining why financier Leon Black, who is rumored to spin off $100 million a month in profits, buys so much art of every stripe.

Needless to say, this is not true of all collectors. One woman I spoke to, who described herself as “a passionate but not serious collector,” pointed out that when she buys she’s not worried about provenance, and that she is not “purposeful.” “It just happens,” she said. And there are those like Michael Hort, who buys “young art” and has amassed a world-class collection based on nothing more than his own eye and instincts. “We buy,” he says of himself and his wife, Susan, “while other people are still thinking about it. The joy of collecting is knowing the artists and watching them grow.” 

Still and all, an attitude of financial vigilance is increasingly common among the megarich patrons who frequent the art fairs with their catalogs and advisers in tow. I had coffee with a woman who describes her collection as “peaches and peas,” as opposed to having a coherent narrative. For years she bought according to her and her husband’s tastes—“I’ve made my mistakes,” she admits, “but my mistakes are $50,000. It’s different if it’s $4 million”—until the moment she decided to apply the rigor she put into the rest of her life to her art collecting and hired an adviser, who suggested that she be less “random” in her purchases and “complete the story.” 

The adviser was the supremely well-connected and confident Amy Cappellazzo, whose consulting firm, Art Agency, Partners, was recently acquired by Sotheby’s for a cool $50 million. When she finally had time to talk, between meetings and phone calls, Cappellazzo, who used to head up the contemporary department at Christie’s, offered a jaunty view of the distrust the Knoedler forgeries have sowed among potential buyers. “It’s inspired a new level of due diligence,” she said, as if we were talking about real estate transactions. “Dealers often provide good information, but the role of due diligence is left to the buyer. There’s way too much capital for the market to be that casual... Art holds value like a financial instrument: You can leverage it, pass it on in a trust, and since 2005 greater liquidity is available—you can borrow against it.” 

There is something ultimately sad, to my mind, about an art world that has moved so far away from the passionate act of looking—which no one seems to have time for these days, in any event—in favor of assessing the resale value of acquisitions. It’s possible to envision another (albeit implausible) scenario in which the De Soles could have put their chagrin on hold and relished the private subversion of owning a beautiful fake. Shouldn’t it have given them the same aesthetic pleasure? 

And perhaps I find it as sad as I do because I’ve always loved art, ever since I was first exposed to the Milton Averys and Jack Yeatses in my parents’ modest collection. Some 20 years ago, I also began in a small way to enjoy buying art. Although very few of the paintings, drawings, and photographs on my walls—they include a Louise Bourgeois print, a Samuel Peploe drawing, and an oil painting by Lisa Stokes—would bring a gleam of mercantile delight to the eye of a dealer or adviser, they have all brought me pleasure. I’m a sucker for first-rate outsider art as well, such as the obsessive pieces by the psychiatric patients at the Gugging clinic, outside of Vienna, although they, too, are beginning to outpace my resources.

Meanwhile, Ann Freedman remains part of the art scene and holds shows in her own New York gallery, as though nothing has happened. “She’s still in business,” comments one dealer. “She’s everywhere. It seems odd to me and everybody else.” And meanwhile, collectors will continue flipping their beloved works of art, looking to make a killing. And meanwhile, again, other forgeries will crop up—are cropping up even as I write—and will get hushed up, since few have the deep pockets or the determination, like the De Soles, to take on the creaky edifice of authentication. “There are so many scams going on all the time,” says Golub. “That’s the languor of the human race. There are phony Picassos and Monets floating around. You roll the dice.” Caveat emptor. 

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