Press Releases & Art Market papers
Aug 27 2023 | CINOA

Editorial: Scandal is just such a great read!

by Clinton Howell, August 2023

The NY Times published an article on the Wildenstein¬†(NYTIMES)¬†family of art dealers. The article focused on a French lawyer’s determined search for assets from the Wildenstein Gallery for the widow of Daniel Wildenstein, Sylvia Roth Wildenstein. She was the second wife and had, unwittingly, signed over her inheritance at the insistence of her step sons who claimed that the Wildenstein empire was riddled with debt and close to bankruptcy–despite some incredible assets. The unsuspecting widow asked no questions and allowed the two sons, Alec and Guy to ride rough shod over her, leaving her with few papers that would show proof that she owned anything at all from the estate. The sons did their damnedest to get everything, including a painting by Bonnard hanging on her wall that had been a gift from Daniel to his wife. The story is mind boggling for the widow’s naive complicity as well as her step sons surgical removal of her from any proceeds in the estate. And, of course, the estate is the story.

The Wildenstein Gallery is a fifth generation firm in the art world that the author of the Times piece, Rachel Corbett, paints as an enterprise of intrigue and hidden assets, a major player in what the author describes as a $68 billion dollar global art market. That figure. $68 billion,  is a complicated number since it really has nothing to do with the story–if, of course, the focus of the story is the Wildensteins and not the art market. If the focus is on the art market, the Wildenstein family is just one of lots of players in a world where few galleries gross sales over a million dollars per annum. But Ms. Corbett uses it to paint the art business as a platform where anything goes–the illegality she focuses on is tax avoidance and money laundering. This may be true of the Wildenstein’s, as they are being sued by both the French and US tax authorities for back taxes, but to paint the “art business” as the wild west where anything goes, is just ridiculous. The Wildensteins are not the norm and the compelling tale of the dysfunction of the Wildenstein family, as extraordinary as it is, is not the art business.

The art market has shady characters and dealers who do illegal things–that is a given in almost any business venture–medicine, banking manufacturing, etc. Crooks are crooks no matter what cloak they put on to perform their misdeeds. But because art can be such a high value asset when you deal at a certain level with paintings worth millions, you will come across individuals, more often the dealer’s client and not the dealer, with the desire to circumvent all government regulation. The enablers of this kind of enterprise are in the open–free port warehouses which allow owners of high value items to import an item to a free port and pay no duty, shell companies to shroud actual ownership and hidden assets in places like Malta or Panama. The Wildenstein family, according to the article, has made use of all of these legitimate practices in order to hide the true value of their holdings. 

The ability for anyone to hide their malfeasance is, ultimately, the question that lingers most after reading this article. What I am interested in, however, as President of CINOA (Confederation Internationale des Negociants en Oeuvres d’Art) is what the potential for illegality has to do with the vast number of dealers who don’t abuse the system? Rachel Corbett goes on to suggest that two other dealers, the Mugrabi and Nahmad families are equally inclined to treat the laws of ownership and taxation with little regard, inferring that this is emblematic of the “art business”? It isn’t, but unfortunately, articles such as hers resonate with law makers who in turn want to clamp down on the “art business” with anti-money laundering (AML) regulations. Corbett cites AML as necessary and yet the latest controls are being tightened so that a dealer selling any item of 2,500 euros or more must keep on file the purchaser’s name, passport number and country of residence–such a small sum which vastly increases paper work and discourages sales for small scale dealers. The last time the Wildenstein’s likely sold an item for the equivalent of 2,500 euros might have been at the turn of the 19th and 20th centuries. 

The article has lots of information in it that can sway you to believe that not just the Wildensteins, but all dealers have an inside track on how to cheat the system. (We all have that information, by the way, not just dealers.) And she builds a case for the amorality of the art world by asserting that the Wildenstein Gallery helped Hitler find collections in the Second World War which kept George Wildenstein (father of Daniel) from being picked up by the Nazis. Furthermore, she adds, they also manipulated the heirs of the Bonnard family in order to get the bulk of the Bonnard estate–seven hundred odd paintings. The greed and lack of morality is enough to get anyone’s dander up and I have to say that it is possibly all true–and disgusting for the blatant amorality. But what isn’t true is that governments, let alone Claude Dumont Berghi, the widow’s lawyer, know what the art business is about. This is not a fair representation of the art business as a whole–the article should have stuck to the Wildensteins, not the art business. But malefactors are fascinating–ordinary dealers who make up the bulk of the business are dead boring and no one wants to read boring. Scandal is just such a great read!