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THE COMMONWEALTH OF MASSACHUSETTS

OFFICE OF THE ATTORNEY GENERAL
ONEASHBURTON PLACE

BOSTON, M ASSACHUSETTS 0 2 1 0 8

MAURA HEALEY
ATTORNEY GENERAL

June 14, 2018

VIA E-MAIL ONLY

Larry Parnass
The Berkshire Eagle
Iparnass^berkshireeaRle.com

Re: Your Public Records Request

Dear Mr. Parnass:

1 write in response to your public records request received on June 5, 2018 1 and made pursuant
to the Massachusetts public records law, G.L. c. 66, § 10. By using the e-form available through
our website, you requested copies of records held by the Office of the Attorney General (AGO),
specifically "[the r]eport filed to the AGO by the Berkshire Museum regarding status of its art
sales in 2018, as spelled out in the museum's agreement with the AGO."

We enclose sixteen (16) pages of records that be responsive to your request and subject to
disclosure under the public records law, G.L. c. 66, § 10 and G.L. c. 4, § 7, cl. 26.

Very truly yours.

Lorraine A.G. Tarrow
Assistant Attorney General & Records Access Officer
General Counsel's Office

cc: Emalie Gainey, Press Secretary

1 See 950 CMR 32.03(3).

O
May 31, 2018 William F. Lee
+1 617 526 6556 (t)
Courtney M. Aladro, Esq. +1 617 526 5000 (f)
william.lee@wilmerhale.com
Chief, Non-Profit Organizations/Public Charities Division
Massachusetts Attorney General’s Office
One Ashburton Place
Boston, MA 02108

Re: Trustees of the Berkshire Museum—Report on Sale of Works and New Vision
Implementation

Dear Ms. Aladro:

I write on behalf of the Trustees of the Berkshire Museum (the “Museum”) to update you on the
Museum’s recent sale of certain works from its collection and its implementation of its New
Vision. The Museum provides this information pursuant to the reporting agreement described in
its February 9, 2018 Verified Complaint in Equity (SJ-2018-0065, Dkt. 1) (the “Complaint”) at
¶ 48, and pursuant to the commitment in our April 10, 2018 letter to provide you with further
information after the conclusion of the recent auctions. This letter also responds to the questions
raised in your letter dated May 2, 2018.

I. Results of Recent Sales

As you know, last month the Museum sold Shuffleton’s Barbershop to a nonprofit U.S. museum,
and on April 11, 2018 the Lucas Museum of Narrative Art, a nonprofit museum being built in
Los Angeles, California, publicly announced that it was the purchaser of Shuffleton’s
Barbershop. Consistent with Justice Lowy’s April 5, 2018 judgment (SJ-2018-0065, Dkt. 26)
(the “Judgment”) (¶ 3(b)), we are pleased to report that the Lucas Museum will initiate a loan of
Shuffleton’s Barbershop to the Norman Rockwell Museum on June 9, 2018, where it will be on
display through 2020.

On April 10, the Museum notified you of a first tranche of 13 works it had selected, based on
interpretive and financial value, for sale at a series of Sotheby’s auctions beginning May 14. In
the fall of 2017, the Museum and Sotheby’s had planned to engage in an extensive effort to
promote opportunities for museums and other public institutions to purchase these works.
Consistent with that plan, in April and May 2018, the Sotheby’s Museum Services team
contacted more than 150 institutions through personalized emails and phone calls, making every
effort to give museums the resources they need to acquire these works, including extended
payment terms, early access to cataloguing and condition reports, and private viewings. Between
Courtney M. Aladro, Esq.
May 31, 2018
Page 2

May 14 and May 23, 12 of these 13 works were sold at auctions or by private sale, to buyers
including the Calder Foundation and the Pennsylvania Academy of Fine Arts.

In total, net proceeds to the Museum from the sale of Shuffleton’s Barbershop and the first
tranche of works totaled approximately $47 million. Although this amount approaches the $55
million the Attorney General and Museum have both agreed the Museum needs, it does not meet
the Museum’s full financial need, and the Museum is assessing how best to proceed forward with
sales of any of the other 26 works authorized for sale by the Judgment. In the meantime,
proceeds from the April and May sales will be invested with local banks.

II. New Vision Implementation And Other Museum Plans

A. New Vision Business And Fundraising Plans

As you know, starting in 2015, the Board engaged in a two-year process of soliciting community
input and conducting financial and interpretive modeling, guided by a respected nonprofit
consultant. This process culminated in the July 12, 2017 announcement of a New Vision. As
part of that planning process, the Museum—with the assistance of its consultant—prepared
financial models that would be incorporated into a business plan, but the Museum was not able
to finalize that plan. Since Justice Lowy’s April 5, 2018 Judgment, the Museum has only had
one full meeting of its Board of Trustees, and one Executive Committee meeting. Nevertheless,
among other things, the Board has proceeded with plans to engage a new consultant to help
finalize a business plan and assist the Museum in refining its extensive fundraising efforts in a
challenging fundraising climate.

Specifically, on April 19, the Board’s Finance Committee created a subcommittee dedicated to
the task of further developing the Museum’s business plan. This subcommittee includes Board
President Elizabeth McGraw, Treasurer Stephen Bayne, and Trustees Mike Addy, William M.
Hines, Jr., and Caitlin Pemble. Working with staff, the subcommittee has updated the existing
financial modeling documents with current budget and balance sheet information to reflect the
Museum’s current financial position. The subcommittee has also prepared a draft Request for
Proposals (“RFP”) for review and approval at the June Board meeting, which will allow the
Board to hire a consultant through a competitive process. The subcommittee has also identified
and begun vetting potential consultants. The Board expects that the RFP process will be
complete, and a consultant hired, by the end of September.

On May 15, 2018, the Museum filed with your Office Form PC for the fiscal year ended June 30,
2017, and today, it is filing its audited financial statement for that fiscal year. I have enclosed a
copy of the audited financial statement for your review.
Courtney M. Aladro, Esq.
May 31, 2018
Page 3

B. Consultation With Related Institutions

The Board’s two-year process of formulating the New Vision drew on extensive consultations
with peer institutions, both in the Berkshires and across the nation. The Museum convened and
held multiple meetings with several formal working groups that included peer institutions,
through which it gained valuable input both on designing and executing its New Vision. One of
these working groups was the Cultural Partner Working Group, which included the directors or
staff leadership from ten prominent regional institutions. Mass MOCA Director Joseph
Thompson described this group’s meetings in a July 2017 Berkshire Eagle opinion piece:

Over the past year and a half the museum conducted evaluative meetings with
hundreds of stakeholders, patrons, cultural professionals, and community
members. Leaders of every regional cultural institution were invited to participate
in the analysis. I attended several planning sessions and was impressed with the
transparency, diligence, and spirited creativity of the process.

Joseph Thompson, A Case for the Berkshire Museum’s Decision to Sell Art, BERKSHIRE EAGLE
(July 28, 2017).1 These working groups also included the Program Working Group, which was
composed of representatives from 13 organizations in Berkshire County interested in exploring
programmatic collaborations, particularly around education and interdisciplinary experiences.

Also as part of the two-year process of informing the formulation and execution of the New
Vision, in 2016, Museum consultants conducted interviews with leaders of 16 “benchmark”
institutions across the nation. These interviews allowed the Museum to learn from organizations
with missions and programs similar to scenarios the Museum was considering for its New
Vision. The 16 institutions included compelling regional museums, museums seeking to engage
their visitors in hands-on creation and creativity, locally-grounded museums with a compelling
global connection, and museums that encourage active exploration and interdisciplinary
connections. Through the interviews, the Museum gathered details related to audience
engagement, exhibitions, programs, and institutional sustainability.

Growing out of that process, in early 2017, the Museum convened a Content Advisory Council
composed of 11 attendees from universities, museums, and related associations. These
individuals participated in a day-long workshop to develop concepts for interdisciplinary
interpretation based on works of art, historical artifacts, and scientific specimens from the
Museum’s collection.

1
Available at http://www.berkshireeagle.com/stories/joseph-thompson-a-case-for-the-berkshire-museums-decision-
to-sell-art,515115.
Courtney M. Aladro, Esq.
May 31, 2018
Page 4

The Museum’s extensive consultations regarding the formulation and execution of its New
Vision will continue as it proceeds with implementation of the New Vision. This fall, the
Museum will reconvene the Cultural Partners Working Group and the Content Advisory
Council, and Museum staff will visit museums with similar interpretive goals. These museums
will include the Bruce Museum in Greenwich, Connecticut (“a community-based, world-class
institution featuring art, science and natural history for residents of Fairfield County”); the
Montshire Museum of Science in Norwich, Vermont (“a hands-on museum ... with more than
150 exhibits relating to the natural and physical sciences, ecology, and technology”); and the
Adirondack Experience: The Museum on Blue Mountain Lake, in Blue Mountain Lake, New
York (“expand[ing] public understanding of Adirondack history and the relationship between
people and the Adirondack wilderness”). Staff members are also planning to consult with
colleagues at the Association of Science and Technology Centers’ national conference in
September, and the regional New England Museum Association conference in November.

C. Community Engagement

The Museum is grateful for the significant support it has received from its community over the
past year. Both the announcement of the Museum’s agreement with your Office in early
February, and Justice Lowy’s decision in early April, have provided the Museum with the
opportunities for renewed community engagement and outreach.

Shortly after the Museum’s agreement with your office was announced in early February, Board
President Elizabeth McGraw submitted an article to the Berkshire Eagle, making a public appeal
to heal the divisiveness that had riven the community. See Elizabeth McGraw, Securing the
Future Together, BERKSHIRE EAGLE (Feb. 16, 2018).2 The article laid out the difficult choices
that led to the decision to sell certain works, explained the agreement reached with your Office,
and called for healing and collaboration:

Our hope is that the protracted legal battles can end. Continued litigation means
more expense and uncertainty that revive the financial threats we are trying to
resolve. We want to save a struggling museum in a community that desperately
needs what it does and can offer. We believe now is a good time to take a deep
breath and step back from the battle lines so we can move forward together.

Id. Staff, Trustees, and community supporters have advanced similar messages in public and
non-public settings.

2
Available at http://www.berkshireeagle.com/stories/elizabeth-mcgraw-securing-the-future-together,532259.
Courtney M. Aladro, Esq.
May 31, 2018
Page 5

In addition to emphasizing a tone of conciliation with those who have expressed concerns with
the Museum’s plans, the Museum is conducting specific activities to reengage the community,
including meetings with the standing advisory groups referenced above and with member, donor,
affiliate, and affinity groups. In an effort to promote community understanding of the New
Vision, the Museum has offered the public demonstrations of the interpretive experiences
planned for the New Vision through the Curiosity Incubator exhibition, a portion of the Museum
that has been redesigned to demonstrate some of the key interpretive concepts underlying the
New Vision. In March, the Museum hosted a reception attended by approximately 50 corporate
and business partners designed to reengage the Museum’s professional peers and potential
sponsors. And in May, Museum leadership met with Pittsfield Mayor Linda Tyer, State
Representative Tricia Farley-Bouvier, and State Senator Adam Hinds to discuss the Museum’s
plans going forward. In short, the Museum is moving forward with a renewed commitment to
outreach and open communications as it considers the road ahead and works to bring its
community together.

In response to your question regarding the impact of professional association sanctions, we note
that the Museum carefully assessed the consequences of raising the funds needed for a
sustainable endowment and necessary renovations through limited deaccessions and sales as part
of the two-year planning process that led to the New Vision. Among other considerations, the
Museum assessed the risk of reputational harm and the impact of potential sanctions from
professional associations. The Board determined that such considerations, though regrettable,
would not substantially impair the Museum’s ability to carry out its mission. For example, the
Museum’s interpretive plan leverages the tremendous depth and breadth of the Museum’s own
collection, and the Museum has not historically relied and does not anticipate relying to any
significant extent on loans from other museums, thus mitigating the impact of disapproval by
professional museum organizations. Ultimately, the Board concluded that despite the risk of
professional sanctions, deaccession and sale was necessary to fulfill the mission of the museum
and preserve its most valuable asset, which is its open doors.

D. Museum Governance

As you know, the Museum’s governance bodies include a 22-member Board of Trustees as well
as several standing committees and ad hoc committees that provide opportunities for community
member participation. Like any nonprofit organization, the membership of these volunteer
committees periodically shifts for reasons including the scheduled expiration of members’ terms
and the decision of individual members that they have insufficient time to commit to these
volunteer positions. In recent weeks, the Museum has been taking steps to fill out the
membership of its Board and its standing and ad hoc committees.

Community member participation in the Museum’s standing and ad hoc committees serves two
important goals. First, it allows the Museum to benefit from community members’ ideas and
Courtney M. Aladro, Esq.
May 31, 2018
Page 6

experience. Second, these community member roles serve as a pipeline for potential Trustees,
by providing potential Trustees with the opportunity to learn more about the Museum and
providing the Board with the opportunity to assess potential Trustees’ expertise, interest, and
capacity for Trustee service.

At the Board’s March 26, 2018 meeting, the Board approved a slate of recommended
appointments of community members for a variety of roles on the Museum’s standing and ad
hoc committees. As a result of the Board’s approval, more than one dozen community members
will be invited to serve on the Collections, Finance, and Facilities Committees, three will be
asked to serve on the Media & Marketing Committee, and 33 will serve on this year’s Museum
Gala fundraising committee. These individuals bring experience in fundraising, health and
wellness, non-profit administration, construction law and project management, finance and
investment, organizational development, and leisure and hospitality management, among other
areas of expertise. These new committee members further reflect the Board’s commitment to
ensuring that a diverse cross-section of the community is participating in Museum governance.

With respect to the Museum’s Collections Committee, in April and May, the Board identified 11
community members as strong prospects for recruitment to this committee, based on an
assessment of these individuals’ areas of interest and expertise. This group of potential recruits
represents visual arts, arts management, environmental science, history, biology, and East Asian
studies. It includes area artists, as well as faculty and staff from Massachusetts College of
Liberal Arts, Williams College, SUNY Albany, the Berkshire Historical Society, and the
Berkshire Natural Resources Council. To date, five of these community members have agreed to
join the Collections Committee.

The Collections Committee will continue to advise Board and staff leadership on the care and
management of the collection, conduct periodic reviews of the Museum’s collections-related
policies and procedures, and develop and recommend changes to the collection consistent with
best practices and professional standards. The committee also will serve as an advisory group to
test concepts for interdisciplinary interpretation and act as ambassadors for the Museum’s
programs and plans. Finally, the committee will support staff in cultivating positive
relationships with potential donors to the collection in order to develop a collecting plan that
supports the Museum’s interpretive goals.

The Board generally appoints new Trustees in the fall, and expects to fill Board vacancies by
drawing on this pipeline of community members or on others with relevant experience that could
complement the extensive set of skills and expertise of current Trustees.

As the Board has prepared for New Vision implementation, it has also been working on
enhancing its procedures for systematic fiduciary oversight and financial controls. To that end,
in April the Board created a Financial Governance Subcommittee of its Finance Committee, with
Courtney M. Aladro, Esq.
May 31, 2018
Page 7

members including Board Vice President Stacey Gillis Weber, Treasurer Stephen Bayne, and
Trustee Williams M. Hines, Jr. This subcommittee is developing a series of controls that are
expected to be finalized with the Board’s approval in August. Among other measures, the Board
plans to revise the process of purchasing goods and services to include pricing thresholds that
will define when formal competitive bidding processes are to be used. Consistent with this
planned new process, the Board has elected to prepare a new RFP for architectural and
engineering design related to the New Vision, which will be issued in concert with a Board-
approved project timeline, to be determined in collaboration with the business planning
consultant.

As you know, the Museum has an established policy for addressing potential conflicts of interest,
and Board leadership recently redistributed this policy to all Trustees. Following review of the
policy, Trustees reported any potential conflicts of interest as the policy requires. More broadly,
the Board intends to obtain outside guidance on the Board’s corporate governance policies and
processes, and conduct a session with the full Board and executive staff regarding corporate
governance best practices.

***

This letter and our April 10 letter have, consistent with the agreement described in the
Complaint, each provided you with updates “on the progress of the sales and the Museum’s
implementation of the New Vision.” Complaint ¶ 48. Consistent with the agreement described
in the Complaint, the Museum will also provide you with information regarding the Museum’s
plans to include works in any additional tranche, and, six to twelve months from its receipt of
$55 million in net proceeds, provide you “with a final report on the progress of its
implementation of the New Vision.” Id.

We are pleased that the relief proposed by the Museum and the Attorney General, and approved
by Justice Lowy, will allow the Museum to raise the necessary funds to continue fulfilling its
purpose of promoting art, history, and science for generations to come. We look forward to
providing you with additional information in the weeks and months ahead.

Sincerely,

William F. Lee
THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE ATTORNEY GENERAL
ONE ASHBURTON PLACE

BOSTON, MASSACHUSETTS 02108

MAURA HEALEY (617)727-2200
ATTORNEY GENERAL www.mass.gov/ago

VIA EMAIL May 2,2018

William F. Lee, Esq.
WilmerHale
60 State Street
Boston, MA 02109

Re: Trustees of the Berkshire Museum - April 10. 2018 Report on Planned Sale of Works

Dear Attorney Lee:

Thank you for your April 10, 2018 letter updating the Attorney General's Office
("AGO") on the Trustees of the Berkshire Museum's ("Museum") plans for the sale of certain
works of art from its collection. We appreciate the Museum explaining the process its Board of
Trustees (the "Board") undertook to select the works to be included in the first tranche for sale
this spring, including how the works were chosen in accordance with Justice Lowy's April 5,
2018 Judgment and Memorandum of Decision authorizing the Museum to proceed with the sale
subject to certain parameters. We share the Museum's hope, as expressed in your letter, that the
sale of this first tranche will allow the Museum to meet its goal of raising $55 million and
foreclose the need for any further sale of art. We also encourage the Museum to make best
efforts to obtain offers from and consider sales to public institutions so that the identified works
may be preserved for the benefit of the public. See Lowy Memorandum of Decision, p.6, n.5
(Apr. 5, 2018) ("... [A]rt is best preserved for the benefit of the many, not the few highest
bidders."). We look forward to learning of the Museum's success in identifying public
institution buyers for works in the first tranche.

As you know, the Museum and the AGO agreed that the Museum would provide reports
to the AGO on (1) progress of the sales including the number and identity of the works to be
included in each tranche and a description of how each tranche meets the elements identified in
paragraph 45(b) of the Museum's February 9, 2018 Verified Complaint in Equity; and (2)
information regarding the Museum's implementation of the New Vision. We are pleased that the
Museum provided us promptly with an update on its process and analysis in arriving at the 13
works included in the first tranche before announcing those works for sale. As discussed, given
the short timeframe between Justice Lowy's Judgement and the spring auction dates, we have
agreed that the Museum may stage the first report in two parts and supplement its April 10 letter
with a second submission that details the Museum's progress towards implementation of the
New Vision. Among other things, we look forward to hearing more about the following:
William F. Lee, Esq.
May 2, 2018
Page 2
What progress has the Museum made towards engaging a consultant to assist the
Museum in developing a business plan, including a fundraising plan?

Has the Museum consulted with or studied other institutions with similar missions or
interpretive goals to inform execution of its New Vision?

What efforts has the Museum made to reengage with the community in support of its
New Vision? In what ways is the Museum prepared to address potential professional
organization sanctions or other reputational harm from the sale of the selected works of
art?

What efforts has the Museum made to fill vacant seats on the Board? In what ways are
these recruitment efforts aimed at furthering the implementation of the New Vision,
including what, if any, areas of expertise has the Museum targeted for Trustee
recruitment?

- What efforts has the Museum made to recruit new non-Trustee members for their
"expertise, interest and service"1 to serve on the Collections Committee? Have those
efforts been successful? If so, what if any expertise do these non-Trustee members bring
to the Collections Committee? How does the Museum intend to utilize the Collections
Committee moving forward?

- Has the Board reevaluated or reexamined its conflict of interest policies? What steps is
the Board taking to ensure fidelity to those policies, and decision making free from
conflicts, moving forward as it works to implement the New Vision?

We understand that the auctions in which the Museum (through Sotheby's) will offer
works of art for sale are scheduled to take place between May 14 and May 23. We will look
forward to receiving the Museum's supplemental report no later than May 31, 2018. In
addition, although we have agreed to stage this first report in two submissions, we expect that
future reports will include both information on any tranches of works to be sold as well as
implementation of the New Vision.

Sincerely,

Courtney M. Aladro
Chief, Non-Profit Organizations/
Public Charities Division
Office of the Attorney General

Cc: Felicia Ellsworth, Esq.
Mark Fleming, Esq.
Andrew Dulberg, Esq

1 The Museum's July 12, 2018 Collections Management Policy describes the community members on the

Collections Committee as being "chosen for their expertise, interest and service."

2