Artful Dodgers

There are, I believe, six myths that almost everyone believes are true about the art market. They are used by the vast majority of dealers to sell decorative art; because they are recognized by customers as rules they have heard before and which cause them to believe they are being told the truth.

Here they are:

• Art has value.
• Art values always go up.
• Art is a good investment.
• You can always resell your art and get out of it at least what it cost.
• The bigger the name of the artist, the higher the value.
• When an artist dies, the value of his art goes up.

It is important to understand when these concepts actually do apply and when they are no more than myths. Essentially the answer is that they may hold true in upper levels of the fine-art market, but they almost never do in the decorative-art market.

While the fine-art market represents the largest amount of money that changes hands for art, the decorative-art market represents vastly larger numbers of sales and the largest number of buyers, and therefore, the myths have an effect on most people who buy art.

Surveys I have conducted demonstrate that almost everyone believes these myths are truths that apply to art across the board. This belief is also demonstrated by the large number of clients who have consulted me about reselling a work of art because their circumstances had changed; they wished to make a large purchase or pay college tuition. My warnings that they should not expect a windfall—if their piece sells at all—are always greeted with great surprise, and when I turn out to be correct, disillusionment.

It is still true that the best way to double your money is not to buy art, but rather to take it out of your wallet, fold it in half and put it back in.

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Since it is almost impossible to quantify art or evaluate it using the empirical tools with which we measure so many other things, all reasonable opinions about a work of art are equally valid. While I might bring more knowledge and experience to the process of evaluating the technical success of a piece in an exhibition than might another viewer, in the end, to like or not to like is a totally individual decision. That’s why the Romans declared, “De gustibus non disputandem est.” Tastes (and lusts) are not disputable. Tastes are based on many things: experience, knowledge and certainly a whole bundle of perceptions.

There are always discussions and arguments about what is art and what is not. People walk into a gallery or exhibition, take a look at the display, and walk back out saying, “If that’s art, I’ll eat my hat.” Another viewer will be intrigued or moved by the same works and have no trouble thinking of them as art.

Is it valid to glue tea cups and saucers to a canvas and call it art? Is it valid to immerse a crucifix in a beaker of urine and call it art? Is it valid to project a video of a chicken on a dusty village street being hit by a truck and call it art? How about a stuffed tiger shark that costs twelve million dollars? Is it even valid to take a photograph of a flower, print it out from a computer, touch it up with acrylic paint and call it art? Is it valid to answer all of these questions with a paraphrase of the tired old Shakespearian phrase: “art is in the eye of the beholder”?

My own personal and professional answer is that in art, anything is valid—except misrepresentation. In other words, I don’t care what artists identify as their work of art, as long as they are honest about what their intention was, what they have done to create it, and what they believe its value (monetary or otherwise) is.

This is just an extension of my motto:

• If a person has integrity, nothing else matters.
• If a person does not have integrity, nothing else matters.

When I walk into the Whitney Museum Biennial exhibition in New York, I know that I’m in for a couple of hours of challenge, and I will not be prepared for much of it because I have not done the work required to be “up to speed” with the latest conceptual art. Some of the concepts I won’t get because my knowledge, experience, and perceptions have not evolved to that level yet. In many areas, they never will, because I am not interested enough to make the effort. On the other hand, if the curators, working in conjunction with the artists, have done a good job of introducing the concepts and explaining how the artist has developed them and what his intentions are, then I’m available to make the effort to catch up. I’ll work on developing my ability to perceive all the information the artist, through his work, can give me.

In a market so dependent upon perceptions, it is especially important for a consumer to develop a level of knowledge and understanding that permits purchases to be made through a balance of emotional response to an artwork and the ability to evaluate the value being received for the money paid. Kirsten Ward, a physician and psychologist, notes that art has the greatest impact when it makes the thinking part of the brain talk to the feeling part.

When one enters the art market at any level without this degree of sophistication, one becomes fair game for the market’s agents, who stand ready to create the purchase-motivating perceptions the client lacks. That is, giving an art viewer all the reasons why this subjective artwork must become a part of that person’s future. It’s salesmanship. We expect it in the automobile showroom, but in the art market it seems that few people listen to gallery salesmanship as such. In effect, they use the statements and representations offered as blocks in building the edifice of reason that will justify the purchase. The great danger, however, is that the salesmanship may actually be delivered by a con man or woman and the collector will not find out for years, if ever, that the art purchased does not carry the value and monetary-appreciation expectations promised at the point of sale.

Another way to look at it is as the increasingly pervasive process of branding. The role of the art dealer has evolved over the past 150 years and, in large measure, whether selling in the primary (first time) market or the secondary (resale) market, the dealer’s role is to assure a prospective buyer that an artwork is highly desirable as an acquisition. In both markets, the price of art is governed by supply, demand, and marketing. Branding is a critical technique in marketing.

In his fascinating book about the economics of the contemporary art market titled The $12 Million Stuffed Shark, Don Thompson observes, “In the world of contemporary art, branding can substitute for critical judgment …” He is writing here about the upper levels of the international market, where people with tremendous amounts of money buy art at astronomical prices that actually represent only a few days’ income to them.

He further says,

"Since art collectors cannot always fathom the value code, they understandably do not trust their own judgment."
"Their recourse is often to rely on branding. Collectors patronize branded dealers, bid at branded auction houses, visit branded art fairs, and seek out branded artists. You are nobody in contemporary art until you have been branded.""

As we shall see, this is pervasive at all levels of the art market all the way down (and perhaps especially) through the various levels of decorative art. People frequently buy because they have been provided with the perceptions that support their decision and those perceptions are based on the recognition of brands that assure the purchase is a desirable decision.

This topic has been well covered by several recent books, and even after reading them, talking to many of the players, and observing the development of the high-end contemporary art market for decades, I am as clueless as ever as to what really explains the unbelievable phenomena we frequently see reported with great fanfare. When asked about the ever-escalating prices paid for art created not by Andy Warhol, Damien Hirst, and Jeff Koons, but by cadres of artisans in their studios, my practice is to remind people that 75 percent of the word contemporary is temporary. The remaining 25 percent is con.

In an interview, Damien Hirst, whose works command prices of many millions of dollars, revealed that his artworks were produced by teams of assistants. Each painting, for instance, is done by several people so no one is ever responsible for an entire work of art. Hirst adds a few brushstrokes and signs the work, a technique developed by Peter Max. He also said that he cannot paint. A buyer would get an inferior work if it were painted by him. Buyers of Damien Hirsts are apparently driven not by the desire to have an original creation from the hand of a genius, but are content with the perception that what they buy has great value.

Speaking on condition of anonymity to Will Gompertz, the BBC’s arts editor, on October 27, 2012, one curator said, “Money and celebrity [have] cast a shadow over the art world which is prohibiting ideas and debate from coming to the fore.” He added that the current system of collectors, galleries, museums, and art dealers (and auction houses) has colluded to maintain the value and status of artists and has quashed debate on art.

Dave Hickey, a curator, professor, and author known for a passionate defense of beauty, says the contemporary art market is “calcified, self-reverential, and a hostage to rich collectors who have no respect for what they are doing. They’re in the hedge-fund business, so they drop their windfall profits into art. It’s just not serious.”

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Opening the Eyes of a Twelve-Year-Old

During the years that my two kids were growing up and I was enjoying being a dad, I was able to share some pretty interesting parts of my career with my son and daughter. I have already mentioned Duncan’s assistance with some undercover assignments. His sister, Heather, also experienced an eye-opener.

My bright and sensitive daughter came to me when she was about ten or eleven and said, “Dad, I’m worried about your sending people to jail who have sold fake art. I know you do it to stop them from stealing money from more people, but some of those men might have little girls like me, and you’re sending their daddies to jail.” I told her how important her empathy was but also explained why I had to do what only I could do.

When Heather was twelve, I took her to New York for a week of exploring the City and a day of working on a professional assignment for a couple of government agencies. On the appointed day, we were at Grand Central Station at eight o’clock and met an FTC attorney and an FBI agent. The four of us boarded a northbound train and got off at Mount Vernon in Westchester County. We walked to a warehouse owned by Collectors Guild, a print-of-the-month art distributor.

We were greeted by the president of the company (son of the founder), an attorney or two, and several of the warehousemen. While I examined a four-foot-high stack of prints with federal-court orders plastered on it, the warehousemen stood around us in a circle to be sure we didn’t get curious about the fifty or sixty other stacks of prints on pallets in the immediate area. Those I examined were fakes with forged Dalí signatures that had been marketed through American Express to its cardholders.

When Heather, who was doing school work at a nearby table, asked if she could go to the bathroom, one of the men growled at her to follow him, but keep her eyes to herself. Later, on the return train, Heather said, “Boy, Dad, those guys were really creepy. They were just like the Mafia.” The FBI agent said, “That was the Mafia, Heather.” She, now with eyes as big as mill wheels, asked, “Are those the sorts of guys you’re sending to jail, Dad?” I told her some of them were like that, and she said I’d better get them because they were creepy. She had met the enemy and knew who it was.

Opening the Eyes of a Fourteen-Year-Old

Heather’s younger brother, Duncan, had a similar revelation a few years later when he flew with me to Salt Lake City for a day. Our client picked us up at the airport in a large, black SUV with heavily tinted windows. He drove us to an apartment to examine several dozen decorative limited-edition, hand-signed prints that he said he had received in payment of a debt.

After a couple of hours of examining and photographing the prints in the totally unfurnished and apparently unoccupied apartment, I presented an invoice for my fees and expenses. The client walked into the kitchen, opened a cupboard over the stove and took out a very large stack of hundred-dollar bills. After counting out several thousand dollars’ worth, he replaced what was left in the cupboard and tossed me the keys to the car saying, “Why don’t you guys use this until you fly out this evening? Leave it on the third level of the airport garage and put the keys under the floor mat.”

As we drove away in search of lunch, Duncan said, “Well, Dad, is there any question what he does for a living?” I agreed that it looked as if I had a pocketful of drug money and expressed concern about the possibility that the car would be picked up later by a hit man who flew in to do a contract. We wiped down the interior to remove our fingerprints before heading for our flight home.

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Introduction to the Salvador Dalí Market

The proof of everything I have written about in this book so far can be found in abundance in the market for artworks by and attributed to the Spanish surrealist master Salvador Dalí. The scams are bigger. The characters are more fantastic. The prices are more intangible. The credibility of “experts” is more elusive. The stories are richer. It’s all about perception, and the opportunities both for fraud and for connoisseurship are magnified. It is almost as if there is a whole new set of myths driving the market.

In fact, fraud has been so pervasive in the market for Dalí art—especially prints, of which there are about 1,700 legitimate editions—that frequently, when I tell art professionals that I am the internationally recognized Dalí expert, they roll their eyes and say, “Now there’s a market that scares me.” As we talk, I find that they know all of the misinformation and false stories that have circulated for years, and they believe that there is no one who can tell the difference between a legitimate Dalí print and one of the many thousands of fakes.

Prior to 1987 that was true, but by then I had been exploring the quagmire for seven years, was in contact with many of the players—good and bad—and had developed my art-detective techniques for Dalís to the point that, in fact, I usually could tell the difference. From that point on, I had guaranteed job security.

Nineteen eight-seven was the year that the first court cases and prosecutions of fake Dalí dealers and publishers kicked off. From then through 1992, about 60 percent of my time was spent providing litigation-support services as the only expert who could prove to a jury that prints being sold for $1,800 to $4,000 as original Salvador Dalís were actually bogus, exhibited forged pencil signatures, and should be priced at $18 to $40.

I’ve sent crooks to jail. I’ve broken many collectors’ hearts. I’ve been congratulated by a judge for setting a new record for the length of cross-examination in federal court. I’ve seen people who had thought we were friends turn away when they saw my name on a witness list. I’ve provided services for a long list of federal regulatory and law-enforcement agencies. I’ve been threatened many times. I’ve worked with splendid attorneys and investigators. I’ve faced organized-crime figures. I’ve done numerous undercover investigations. I’ve had my reputation smeared. I’ve met almost every important player on both sides of the issue. I’ve assisted a great many colleagues appraise Dalís. I’ve always done it with integrity and, I think I’ve had more fun than anyone else in my profession.

The Perfect Storm

So what made Dalí such a target for international fraud, and what made the scams so successful? It was the coming together of a number of factors that reflect the differences between fine art and decorative art and rely on the six myths that drive the art market. The first factor was that everyone knew that Salvador Dalí original paintings sold in the international market for impressive and always-rising prices. This made it easy to sell the prints as fine art, when in fact they were decorative art.

Further, there were no connoisseurs or experts who could identify the real prints and the bogus ones until 1987, and by then, the scams had been developing for almost a decade—perhaps 100,000 fakes had been sold—and the perpetrators had so successfully circulated myths to explain their actions that the stories continue to have credence today.

So what were the other factors? Significantly, since the end of the Second World War (which Dalí and his wife, Gala, spent in the United States doing commercial projects and movies), Salvador Dalí had been very lax in his business practices. Gala (born Elena Diakonoff de Ullina in Kazan, Russia, in 1894) always needed money for her boy-toys, gambling, and lavish lifestyle. Huge quantities of cash came from contracts between Dalí and print publishers as well as sales of paintings and drawings to collectors.

With Gala’s unrelenting demands for money, Dalí was pleased to find that, as he said, “I can make $20,000 before breakfast.” This he did by signing print contracts or, later, blank sheets of paper for print editions and sets of Divine Comedy, which had been published without signatures.

Dalí signed contracts with almost anyone and did nothing to police the manner in which they were then used and abused. He even resisted efforts by others to unravel his affairs saying, “The important thing is to spread confusion, not eliminate it.”

The greatest factor, however, was that the artist and his wife contracted flu early in 1980 and, with Dalís paranoia about disease, fled to Paris and then home to Port Lligat at Cadaqués, Spain.

The death of Gala in 1982 and severe burns Dalí suffered in a fire in 1984, reduced the already failing artist to a wretched patient with no control over his own life. He apparently signed several highly questionable documents his handler put in front of him. One disavowed the credibility of his closest friends, Giuseppe and Mara Albaretto.

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