Saturday, March 28, 2009

Art World Madoff-Character Arrested

A corner stone of the New York art scene who sponsored museum caliber exhibitions was recently arrested and indicted for allegedly architecting and implementing an art-world ponzi scheme.

This art gallery dealer seems to have found a more lucrative form of art thievery than merely swiping a painting one at a time. He seems to have found a way to make multiple times the value of artworks by selling investments in paintings he did not own, and selling a painting several times to multiple buyers. Lawrence B. Salander was the owner of a now-closed Manhattan art gallery with a star-studded clientele, including tennis champion John McEnroe. He allegedly stole $88 million from them by selling part-interests in paintings where the part-interests were greater than the entire interest.

Criminal prosecutors state that in McEnroe's case, Salander sold to him a half-interest in an Arshile Gorky painting and told McEnroe that they would split profits when the painting was sold to someone else. McEnroe later learned the painting was hanging on someone else's wall, but Salander had not reported the sale or any profits to him, say prosecutors. When McEnroe confronted Salander, the gallery owner gave him a half-interest in another Gorky painting. McEnroe lost his ownership interest in that second painting after he loaned it to Christies auction house for an exhibit, and the auction house refused to return it. Allegedly, Christie officials told him another third party had claimed ownership of the painting and put a lien on it.

The New York District Attorney announced Thursday that a 100-count indictment names Salander and his Salander-O'Reilly Galleries LLC on charges that include grand larceny, securities fraud and forgery. Salander faces up to 25 years in prison if convicted of first-degree grand larceny.

Author Ulrich Boser in The Garner Heist says: "Then, late one afternoon, sitting in my chair, gazing up at the portrait, it dawned on me that owning a artwork had its own potent power – it made me feel as if I controlled some portion of its skilled creativity, that there was a direct connection between me and the art… it was that emotion, that passion to possess a work of art that made art cons so successful."

Salander seems to have found a way to exploit his clients' emotion for art and desire to possess it, while lining his own pockets and living the Life-of-Reilly (pun-intended).

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Sunday, March 22, 2009

Principles for Successful Entrepreneurs

I spoke at a fabulous event this weekend – Enterpreneur Trek at Stanford – designed to give entrepreneurs a 2-day intensive reality-check on their business models and plans. I listened to the speaker before me in the late afternoon: extremely talented, successful, mid'50s gentleman-engineer who knew the technology of his biofuel invention backwards and forwards. He rattled on energetically for an hour and a half – clearly he was devoted to his invention and business. Meanwhile, the fellow in the audience in front of me who was on Paris-time literally nodded off in an uncomfortable, embarrassed snooze.

Yet, what was surprising to me was who was engaged and awake. While some snoozed and three bored ladies from Asia got up and left – yeah, I noticed – most of the guys were engaged, thinking, and asking intelligent questions all the way to the end of the long session.

I got the 5 o'clock spot – everyone in the audience by that time is tired and ready for a glass of wine after a full day of speeches that pushed their thinking from 8:30 am straight on… and now they get to listen to a lawyer. Grrreat.

My co-speaker and I had never met, and did not speak before the session began. I began with a fact-filled presentation about protecting your IP as a start-up. In twenty minutes, I scooted through essential principles of employee and founder assignment agreements, basic patent principles and confidentiality agreements to help a start-up keep ownership of their IP. My counterpart was supposed to speak about VC funding for start-ups. (The speech he actually gave was a pitch for his big law firm.)

I think what was equally surprising to me was the dearth of ladies in the audience. I told you the Asian trio left in the middle of the tech-talk. During my talk, the audience left was about one quarter ladies. While I spoke, I watched – there was a brightness in their eyes – not just because of the brilliance of my words J, but I think (I hope) because I was a smart woman who showed she is at least as smart if not smarter than my co-speaker – and I had made-it. They were happy to see a female mentor. But, not one of them asked a question, not one of them made a comment. Their male counterparts did.

Yet, I can only tell you, dear Reader, it is tougher to achieve professional success than I ever believed it would be. I started engineering school at Cornell – we were 51% women in my class – the School was so very proud. 4 years later, we graduated less than 20% women. I am honored to have been amongst them. In defense of the ladies I saw this weekend, I was not outspoken until later in life. I listened, I thought, I learned. I've watched talented women move up, take themselves out of the workforce to get married, and, while they tried, never made it back. I also saw a few, few women – luckily for me, my mentors – stick with it, and make it. I've tried to follow in their footsteps. Now, I set the path for my younger sisters. I suppose this weekend I was sad that young women still feel intimidated and weak, as I did when I was in their shoes.

I know intellectually that mental fear breeds lack of mental stamina, drive, courage and confidence. Me? I've lacked all on occasion, but I know I am at least as smart if not smarter than the guys I meet (well, most of them).

My secret for success?

  • Be smarter than any one else (that's easy – just read and study more)
  • Be confident (I never noticed until later that I was the only girl in engineering class, when grilled with a question by the prof)
  • Be humble - Accept advice (Listen to your friends, mentors, spiritual sisters and brothers – they mean well and are trying to tell you something)
  • Be ethical (Golly, this shouldn't be an issue, but don't take the short-cut – there is no shortcut!)
  • Be tenacious (Yeah, you get tired, but stay for that last lecture, go to that last networking event)
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Wednesday, March 4, 2009

Art Law: Cultural Property versus Personal Property

Recenlty, Cai Mingchao bid over $40 Million for two bronze rat and rabbit sculptures that were being auctioned off from the personal art collection of the late Yves Saint Laurent. He then refused to pay Christie's auction house saying they were "looted" from China and should be returned to the Chinese government free of charge.

The two sculptures were part of an elaborate 18th century fountain constructed by European Jesuit priests at the Summer Palace outside Beijing. Each of the 12 animals of the Chinese zodiac was represented, spouting water in turn during the two-hour period of the day for which it was supposed to be responsible in Chinese astrology. The Summer Palace was burned and looted by British and French soldiers at the end of the Second Opium War in 1860 in retaliation for the execution of their emissaries by the Chinese court, and all twelve heads disappeared.

Five other sculptures from the fountain have come up for auction in recent years and were bought and returned to China by Chinese millionaire philanthropists. The remaining five are missing.

Cai Mingchao wanted to make a statement that the statues should be returned to China as part of China's cultural heritage. On the other hand, without the preservation by caring collectors, even these two precious art objects would not exist.

A classic example of the clash between cultural and personal property rests in the Elgin Marbles which currently reside in the British Museum in London. The Elgin Marbles formed part of the Parthenon frieze in Athens and were sculpted between 443 and 438 BC. I became enchanted with the friezes as a college student at Cornell U: the Temple of Zeus there was an eccentric coffee shop/oasis where one of the very few full-sized plaster casts of the Elgin marbles is displayed. Lord Elgin removed the classic Greek statues in 1816 with the permission of the Ottoman empire who controlled Athens at the time. Without Lord Elgin's actions, these archetypal statues would most likely have been lost to the ravages of war, air pollution and acid rain, along with the rest of the 94% of the Parthenon frieze.

This is a clear clash of the principle of cultural property – property that a nation believes it should own due to the significant cultural legacy the object represents – versus personal property – property personally owned and preserved by an individual. Further, from a moral perspective, what rights should the preserver of works retain? Without the preserver, many works would be lost to the world forever.

So, the debate continues – from grand Greek statues residing at the British Museum to bronze fountain sculptures being auctioned off from the personal art collection of Yves Saint Laurent.

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Monday, March 2, 2009

Art Law: Crook with Good Taste

Having a more-than-passing interest in art law, and thinking that my last post was a bit "heavy" if not scintillating, I thought I'd post this quick note about a "crook with good taste."

In 1999, Joseph Michael Killebrew purportedly stopped payment on checks after buying original oil paintings valued over $261,000 from Laguna Beach galleries in his then-neighborhood. He also purportedly filed a false police report for theft from his Laguna Beach home of his personal art collection for which he collected over $260,000 from his insurer. Today, the art is thought to be valued at at least double – or over $525,000. He was arrested in Las Vegas this week, where he was living under a false name.

As thieves grow more bold taking art from galleries, museums and homes, it is nice to see that the wheels of justice do turn (if slowly) and that at least this art theft was solved.

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