Council for Artists' Rights

Collector Vs Collector Lawsuit After “Secret”

Rothko Sale—Now Valued at $31.4M—Exposes
Dallas Museum of Art

DMA's other $25.8 million sculpture sale from "permanent

collection" raises museum policy questions

May 16, 2010

Dear Ally of artists' rights:

In 2007 the Dallas Museum of Art mounted an exhibition titled "Fast

Forward: Contemporary Collections for the Dallas Museum of Art" featuring
some of the $400 million in promised gifts of artwork donated to the
museum by Dallas residents. In conjunction with the exhibit, the DMA
published a catalogue (actually it should be called a book, for it is much too
large to be classified as a catalogue) with the same name. On page 4 a
simple and clear statement is made, "...unless otherwise noted, all works
illustrated in this catalogue are either partial or promised gifts to the Dallas
Museum of Art or are currently in the permanent collection." Further, on
page 21 the museum's own director states, "The grand utterly
transforming moment came in 2005 when the Hoffmans, Rachofskys and
Roses joined to commit to the Museum by irrevocable (added emphasis)
bequest their entire collections..."

It is virtually unheard of for a modern day not-for-profit U.S. art museum

to have a policy whereby it accepts promises of donated works of art into its
permanent collection and, soon after, completely reverses itself and permits
those same works to be sold by the promising donor to a private buyer for
the donor's personal profit. Private transactions like that recently happened,
twice, at the DMA. That sort of flip flop by a museum raises questions about
the ulterior motives of the donors and by extension the museum's executive
management. Did the museum accept the gifts with the proverbial wink and
nod? Is the museum a willing partner to donor's visions of reaping financial
windfalls by acquiring artwork, letting it accrue the museum's prestige with
the resultant exponential increase in monetary value when later sold? Savvy
museum-goers and others come away with that perception.

The first instance of learning that DMA artwork had been quickly
extracted from its permanent collection and sold at auction came to our
attention when on January 29, 2010 CBS NEWS Sunday aired a program
called “Bringing Art To The People” touting a $400M private art collection
donation to the DMA by three Dallas couples, Robert and Marguerite
Hoffman, Howard and Cindy Rachofsky and Rusty and Deedie Rose. What
the CBS NEWS video failed to tell its viewers is that in 2008 the Rachofskys
pulled their piece, Jeff Koons sculpture Balloon Flower (Magenta) from the
DMA's future and sold it. The piece was purchased by the Rachofskys
roughly nine years ago for $1.1M and it sold at auction in 2008 for $25.8M.
Is
it not the purpose of the museums—in the public's interest—to own these
highly desirable works? Where has the prospective donors' generosity flown
to?

The second sale from the DMA's permanent collection became known
when an eagle-eyed Facebook member posted a hotlink to the breaking
story on Texas art historian Sam Blain's wall. The link leads to
Bloomberg.com's Lindsay Pollock's May 12, 2010 story, “Collector Sues as
Rothko Goes on Block Tonight for $25 Million.” It was the first time the
public had been made aware of the private sale of Mark Rothko's 1961
untitled work of two red rectangles. This revelation casts a different shadow
on the DMA. While "untitled" was also prominently featured in the "Fast
Forward" catalogue as being in the permanent collection, the work was
removed from the museum walls, sold, and was intentionally kept hidden
from public view. Since the DMA is a 501 (c)(3) nonprofit organization, is it
not supposed to be a transparent entity, much like the government where
transactions are available for inspection? Why
should the public learn of a museum transaction only after someone files a
federal lawsuit related to a clandestine sale?

When asked about the DMA's quick turnaround sale of Balloon Flower
(Magenta), American Association of Museums president Ford Bell essentially
shrugged his shoulders and deemed the transaction to be business as usual.

The quick sale of artwork from a museum's permanent collection is

contrary to its primary purpose, which is to serve the public by conserving
the best examples of art for future generations. Museums are assisted in
their conservation mission by being given governmental not-for-profit status,
thereby avoiding paying income tax on donations, which would
otherwise reach into the hundreds of millions of dollars. In fact, the donor is
"reimbursed" through a tax deduction for the current appreciated value of
the artwork and in effect, the public "purchases" the work.

Other issues come to mind. How did Balloon Flower (Magenta) come to
command such a high price? Was it vetted through a rigorous recognition
system such as the juried show? The answer is no. For 150 years such a
system existed in the U.S. to determine what constituted artwork worthy of
recognition at the local, state, national and international level. Such a
system no longer exists. Instead, certain financial speculators and wealthy
art market manipulators bid up the work of artists of their choice. For
example, a donor often serves on the museum's board of directors which
approves funding for an exhibition's publications and publicity, and is also in
a position to approve the museum's purchase of a work.

The DMA recently raised art world eyebrows when it, along with the
Modern Art Museum at Fort Worth, allowed its senior curators to procure
artwork for the new Dallas Cowboys Stadium. The DMA was criticized for
using nonprofit resources to manage a profit making venture. Nonprofit
organizations like the DMA are generally prohibited by the Internal Revenue
Service from engaging in such activities. Again, the perception is the DMA is
flaunting the rules.

What is also problematic is that Dallas and Ft. Worth reporters in

traditional and "new media" have not questioned the DMA's behavior. Is the
DMA bulletproof or perhaps even above the law?

Perhaps it is time to call in U.S. Senator Charles "Chuck" Grassley (R-

Iowa). He has in the past championed investigations into the operations of
nonprofit organizations and is widely considered to be legendary in this
arena. There is a "whistleblower" website devoted to addressing nonprofit
shenanigans and his campaigns are well covered by the press. Are these art
market manipulators too big to fail?

These and other issues important to the health of the arts in the U.S. are
being addressed or soon will be. These scandals must stop. A very
prominent museum director has publicly called for art museums to be
operated "transparently." Bravo.

The Council for Artists Rights is based in Chicago, IL USA. As arts

activist, its thrust is to educate the public about artists' rights and advocates
for artists whose work is in distress. CFAR was spontaneously born in 2004
when devotees of public art learned a city park district had irrevocably
altered--without its creator's permission--a 20 year old work of public art.

Recognition of CFAR founding member John Viramontes:

Honoree, Huffington Post blogger Esther J. Cepeda's Chicago Latino List
2009.

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