Sunday, January 31, 2016

Knoedler Trial--Looking Back at Week 1

Looking back over the first week of the Knoedler trial, the strategies of both sides are playing out in a way that has been widely expected:  The plaintiffs, Mr. & Mrs. De Sole, are claiming that they relied on Knoedler Gallery and its president, Ann Freedman, and that she abused their trust.  Freedman, and the holding company that owned the gallery are arguing that she had done substantial due diligence, was herself a victim of the forgery and that the De Soles had an obligation to do a bit of digging themselves.  Remember, it is not a refund that De Sole wants; he wants damages, so the legal hurdle is much higher—how high it should be seems to be the question here.

I have attended three morning sessions so far.  I hope to get to some next week, but work may well get in the way.  Fortunately, many journalists are following the trial closely and have produced some excellent work on the trial such as  MH Miller at ARTnews Eileen Kinsella, Sarah Cascone and Brian Boucher at artnet and Laura Gilbert at The Art Newspaper.

Serious bloggers like Marion Mannecker at The Art Market Monitor have some coverage, and Donn Zaretsky does his usual thorough job aggregating coverage, including Twitter at The Art Law Blog.

The New York Times has run a few pieces, but I have to say, I am surprised they aren’t doing more.  The art press is running circles around the paper of record.

Most people I know in the art world think Freedman is guilty.  Of course, most of the people I know are art dealers and art dealers, it must be said. would have a natural bias against her.  If she is found by the jury to have been so bad that she (and the gallery) have to give the De Soles triple their money back, the point of view that she is an extremely bad apple who is way different from most art dealers can be upheld. If the defense prevails, it might well create a moral hazard in that dealers would not have to pay damages even in cases where their negligence could be proved. 
Either way, as I have said elsewhere, the trial is dragging the profession through the dirt so it is understandable if a lot of people in that profession are angry with Freedman.

Blake Gopnick, in his usual tightly argued, well written, provocative way has pointed out that everybody adored the painting before it was revealed to be a fake, concluding :

“What De Sole's lawsuit really proves is that the art market, and most of our culture, doesn't care about works of art for any inherent virtues they have, or for the creative minds they bear witness to; it cares about them as sacred relics of a sainted maker, touched by his or her hand and only valuable because they have been.”

Gopnick goes on to imply that the thirst for such authenticity is caused by the market itself—providing one more reason in an ocean of them that this case is generating all sorts of awkward conversations for art dealers.

But even the most neutral observer (and Gopnick!) would have to admit that Freedman is guilty of something.  I mean, yes, we are all sinners, but her behavior was pretty crummy, way worse than run-of-the-mill bad.  For example, when you are an art dealer and someone buys something from you for a ton of money, you look after them.  You know...remember their names the next time you see them, invite them to openings, offer them VIP passes to art fairs, and tell them if recent developments have given you reason to have an inkling that the painting they bought might be fake. This last courtesy seems to have been overlooked.

As the years passed after the De Soles bought the painting by Pei Shen Qian which was signed "Rothko" and which strongly resembled the mature work of Mark Rothko, and which was listed as such on the invoice created for the transaction, it became increasingly clear to Freedman that the source of this painting was problematic.  In 2008, for example, 4 years after the sale, she was writing urgent letters to Glafira Rosales begging her for some documentation on the works, asking her that she swear the works were authentic and demanding that she introduce her to the ‘son of the Mexican/Swiss collector’ who was providing these works because the Daedalus Foundation, set up to administer the Robert Motherwell Estate, had determined that all of the ‘Motherwells’ provided by Rosales were fake.  Around that time, Knoedler even hired an outside forensic analyst to look at the materials used in one of the ‘Motherwells’ who came to the same conclusion—the materials used to make the work were not available when it was said to have been created.  (Even as late as July, 2008, she was still selling Rosales material to other clients). Then, in 2009, FBI subpoenaed Knoedler in connection to a criminal probe into Rosales, they put Freedman on leave, and she then resigned.  So along the way it had to have been pretty clear to Freedman that there was a bit of an issue with the Rosales material.

And yet, not once, according to the De Soles, did she pick up the phone and let them know there might be a problem.  It would have been a rather unpleasant call, but I am certain that if she had called up and said she was sorry, that she had been fooled, that she should have known and that she would refund their money when she could, etc. etc., the De Soles would not have been so angry.  Instead, in their telling, the De Soles learned of the problem by reading news reports of another collector who was suing Knoedler over a painting that had come from a ‘Mexican-Swiss’ collection.  Hence, their fury.

In my opinion, that is what is driving this case forward.  The De Soles are paying some eye-watering legal bills, admitting publically that they fell in love with a fake painting and spending their days in a federal courtroom because Freedman didn’t have the decency to break the bad news to them herself.  One very reasonable conclusion one could draw is that Freedman hoped the whole thing would blow over and she hid from the problem rather than confront it.

Random Thoughts

The wheels of justice move slowly.  There is a lot of downtime, with breaks, side bars, jurors who show up late and so forth. Also, they take away everybody’s phone, so there is a lot of time for one’s time to wander. 

Speaking of the jury, in contrast to the audience and entire court, they are a very diverse group of people.  One of them begged off the case after the first day, writing a long letter to the judge where she said she was stressed out and so on.  He let her off the case, so there are now 9 of them…I assume that 6 will decide and thus there are two alternates.  What a pain.  If you want to get off jury duty, can’t you figure out a way to do so before you are selected for the case? 

The judge, Paul Gardephe, is impressive.  He seems to be able to read along as the court reporter types up the testimony as well as listen to what’s going on.  The various objections are checked by him against the record and ruled on quickly.  He seems to know pretty much everything and to have done his homework.  He is able to locate all the various exhibits and so forth immediately.  I was surprised that he occasionally takes over the questioning for the lawyers…he can see objections coming a mile away and jumps in to keep things moving.  This trial is supposed to last a month, but this guy is doing everything he can to speed things along. 

An important matter he is supposed to rule on is the possible appearance of the only appraiser on the list, Elin Ewald.  She is supposed to testify about what the painting would be worth if it were real in the market of 2013 when it was discovered to be a fake.  The judge stated that he found the various filings and citations by both parties to be inadequate regarding the admissibility or relevance of such testimony, in connection with a breach of warranty under the Uniform Commercial Code.  He is supposed to decide soon.  Ewald is easily one of the top appraisers in the country, so I hope to get a chance to see her take the stand; it would also appear that such a ruling would have a great impact on such cases in the future.

One of the most damaging things to Freedman’s defense is the huge mark-up she was charging on this material.  Most times, if a dealer is laying out their own money for a work of art, they would expect to double or maybe triple their money in a short amount of time.  This might sound steep, but there is a great deal of risk that the dealer takes on.  But in some cases, she was making up to 7 or 8 times as much as she paid.  In his opening, her lawyer, Luke Nikas, tried to take the edge off of this by pointing out that she did a ton of work…bringing in the experts, paying for conservation and so forth.  I expect this to be brought up and chewed over more in the coming weeks.

During one of the many breaks, I was chatting with an artist who was sketching the combatants.  I now know why these drawings always show everyone in profile….they aren’t given seats in the front, but have to sit in the audience, so they never see their subjects head-on.  I remarked to this man that most of the sketches seem pretty complimentary, and he told me that the originals are often sold to the various participants in the trial, so of course the artists flatter them!  Amazing.  Even amidst a trial that may well damage the art market, potential sales are being contemplated.  I didn’t get a chance to ask him what the pricing was…my mistake.

A lot of the press over the years as well as some of the legal filings have pointed out that convicted swindler Glafira Rosales lived in Long Island, with the very strong inference that no art dealer who lived there would have access to such masterworks, unless maybe it was the Hamptons.  However, a number of the documents addressed to her that have been showed in court put her residence in Great Neck, which is hardly a slum.  Interestingly enough, she seems to have later moved to the even more tony Sands Point, New York…a bastion of old money that was the real-life location of East Egg in The Great Gatsby.  Rosales seemed to be moving up in the world!

I have written before about how this case has marked the passing of an earlier age in the art world. It is certainly amazing how old-fashioned the art world of 2004 looks today.  Some testimony mentioned a ‘transparency’ which now seems as quaint as a buggy whip but which used to be the ubiquitous way in which art was offered.  There was mention of fax machines as well.  One thing I haven’t heard yet is the gallery being called “Nerd-ler”.  Almost everyone who was in the know called it “Nerd-ler” when I was younger.  Something to do with the way it would have been pronounced in Germany (it used to be you had to study German to get an art history degree!).  In court, however, it’s “Know-dler” all the time. 

At any rate, I will try my best to keep attending the trial, it’s a real eye-opener all of it.

Friday, January 29, 2016

De Sole Will Not Be Denied

The gloves were off at the Knoedler trial.  I missed the first part of Domenico De Sole’s testimony where his own lawyer examined him, but this morning (Thursday, January 28), the bulk of the defense's cross examination of him took place, having only just begun the day before.  As a number of journalists noted, Mr. De Sole is angry.  He conveys his anger by tightening his body and by speaking in clipped, curt sentences.  Color rises through his face and his eyes flash.  An extremely elegant man, De Sole, by simply withdrawing his cultivated manner, becomes quite formidable.  He is also not afraid of lawyers or judges and often went way off-piste in his answers, repeatedly posing questions to the attorney questioning him as well as talking over his opponent.

The first defense lawyer to take a whack at him was Charles Schmerler who represents the holding company that owns Knoedler and which probably has enough assets to actually pay damages should they lose.  Burly with dark hair in contrast to De Sole’s lithe silvery appearance, the two of them duked it out.  Like De Sole, Schmerler is intimidating and neither of them backed down.  Schmerler asked De Sole if he had ever asked Ann Freedman straight up about the authenticity, which De Sole hadn’t.  Freedman mentioned numerous experts in connection with the work, did De Sole find it unusual that she was making such a big deal about authenticity when she hadn’t even been asked?  He did not.  Upon making the purchase of the fake Rothko, De Sole had asked Freedman to put all the things she had said in writing, and she indeed sent him a list of the experts. Schmerler asked had De Sole read this?  He hadn’t, only his wife did and told him it arrived in the post.

Throughout all of this, De Sole stuck to his guns.  He said when they first saw the ‘Rothko’, Freedman “did all the talking”.  She went on and on about how beautiful it was and basically talked until they bought it.  Freedman is known for being a gifted saleswoman and here the court saw that hers is definitely the hard sell. De Sole said he trusted Knoedler, that this was a top gallery and it never crossed his mind to check up on any of the various claims.  He often spat out his answers and repeatedly was warned by the judge to not answer questions with questions. 

The document that Freedman sent him was shown up on the screen and it’s pretty clever.  This was the famous list of experts, including Christopher Rothko, et al.  The top of it reads “This Painting Has Been Viewed by the Following Experts with Special Expertise on the Work of Mark Rothko.”  Schmerler implied that anyone who bothered to read this document would immediately see that it wasn’t making a very strong claim.  There were short, glowing biographical notes on each of the experts, but all it said was that they viewed it.  Unbelievably tricky.

Of course, Knoedler’s invoice is much less ambiguous and is obviously a breach of the Uniform Commercial Code.  However, the defense is trying to imply that the De Soles didn’t do anything that well-informed collectors like themselves should have done.  The De Soles don’t want a refund, they want damages, so the bar seems to be getting set much higher…at least, that’s the intent here. 

What Schmerler seemed to be saying was that Freedman’s own documents and behavior should have alerted her clients to the fact that the evidence supporting the painting’s authenticity was flimsy.  Wow.  Again, this case is harming the art dealing profession.  Who wants to walk into a shop where the buyer is supposed to have to constantly monitor the salesperson’s actions for insight into the authenticity of the goods?  Buying art is supposed to be enjoyable.  I suppose a visit to a used-car lot would require one to be alert, but art dealers, especially ones like Freedman are not supposed to be in that category…maybe this sentence should have used the past tense.

Schmerler spent the rest of his time picking at Mr. De Sole’s formal complaint, trying to show parts of it where it could be seen as incorrect.  For example, his complaint stated that Freedman never told him that Knoedler itself owned the work at the time he bought it and that they should have—but Mr. De Sole admitted that it really didn’t matter to him who owned it, that he trusted Knoedler.  These seemed like minor points to me, but I suppose Schmerler didn’t want to leave any money on the table.

One of his attempts to trip up De Sole went horribly awry.  Schmerler asked De Sole about some specific language in the complaint to which De Sole replied to ask his lawyer, that he himself ‘was not a lawyer.’  Wait, said Schmerler, I thought you were a lawyer.  The counter punch was vicious.  Referring to his job at Gucci which made him rich, De Sole said “I am no longer a member of the bar.  I have been selling handbags for the past 25 years.  Very successfully I should add.  And all the handbags I sold were real.”  The courtroom cracked up, the jury was in stitches…all the tension that had built up was relieved and the energy released seemed all to flow in De Sole’s direction.  Schmerler sat down soon after.

Next up was Luke Nikas, Freedman’s attorney.  He spent a little time going over some of the same ground Schmerler did, making it clear that De Sole had never asked for any specific warranties and so forth.  He also used some questions to reinforce some of his points in his opening, such as the fact that the De Sole’s painting had been loaned to an important exhibition at the Beyeler Foundation in Switzerland (an extremely inconvenient point for the plaintiffs and for the many experts involved in that episode). 

There was some discussion about a phrase in the invoice where Knoedler said that it was verifying “good title” to the work.  Amazingly, De Sole seems to think that means that the seller owned the work.  Later questioning revealed that he actually is not clear on the concept.  “Good title” means that the work has never been stolen or hasn't any liens against it…that the owner is able to convey the property to another person without encumbrance.  It doesn’t matter if the person the buyer pays is the owner or a broker.  For such an educated man who spends vast sums on art to not know this was shocking.  Not sure who won that round, but it was really the only time I was not deeply impressed by De Sole.

At the end, Nikas asked De Sole if he was angry, and indeed, De Sole was and is.  Why?  Because they wouldn’t give it back.”  “Give what back, your money?” said Nikas.  “Yes.”  

At this point, Nikas was midway through a question when the judge interrupted him.  The question began, “Well isn’t it true that…” and, in that context, I was convinced he was about to say that Knoedler had offered to refund his money.  Remember, De Sole wants triple damages here.  Pretty much all of the other parties who made purchases of fakes from Knoedler, that have been made public, have settled.  This is the only one to have come to trial, so I assume that Knoedler offered him his money back.

At any rate, I am guessing that bringing up the possible fact that Knoedler may have offered a refund would have somehow been a legal no-no.  There was a long side-bar and Nikas ended his questions.

Freedman’s problem is that De Sole would rather spend millions of dollars on an extremely costly trial that he may well lose than simply get his money back.  Here is a guy for whom $8.4 Million is not enough to make him go away.  Again, I don’t know any of this for sure, I am just guessing.  But I assume Knoedler made him an offer which he turned down.  My feeling is that De Sole doesn’t care about the money at this point and he probably will get his $8.4 Million back anyway since there is no question that the work was fake.  No matter what happens, I think that all of the details that are coming out will damage Freedman beyond repair.  She pissed off the wrong guy.

Eugene Thaw

The legendary expert Eugene Thaw took the stand after Mr. De Sole stepped down.  As is customary, he was asked to state his profession, which he modestly gave as ‘retired art dealer’.  Calling Eugene Thaw a ‘retired art dealer’ is akin to referring to Deion Sanders as a ‘retired baseball player.’  Sanders was an excellent ball player to be sure; he led the league in triples one year and played on championship teams.  But he played two sports: when the baseball season ended, he was a star in the NFL—Sanders is the only man to have played in both the World Series and the Super Bowl.  Like ‘Neon’ Deion, Thaw is a polymath of the highest order and put up some electrifying stats.  He is a founding member of the Art Dealer’s Association, having opened his gallery in his early 20s and is, I believe, still a board member; moreover he co-authored the Jackson Pollock catalog raisonne (the reason for his visit today).  These achievements alone would comprise a career of which anyone could be proud, but only begin to describe his success.  He and his wife have donated over 400 master drawings to the Morgan Library (where he is a trustee), and there have been five (five) exhibitions of these gifts over the years,  which included artists such as Rembrandt, Piranesi, Cezanne, Picasso and so on.  For good measure, his collection of nomadic art from the Eurasian steppes was shown at the Metropolitan in 2003, and his collection of Native American art toured several museums in the US, including the Cleveland Museum and the Dallas Museum of Art.  The court seemed unaware of his stature and I wonder why the plaintiffs’ attorneys did not do more to show his prodigious connoisseurship.

Thaw seemed to have some mobility issues, but he spoke clearly and would suffer no fools.  Whenever any lawyer would show him a letter he had written and ask him to explain what it meant, he would shoot back “I cannot think of any clearer way to put it than I did in the letter you just read out loud.”  It was these letters that were the focus of his testimony.  Being a Pollock expert, two scholars, who were trying to authenticate “Pollock” works that Knoedler had for sale, approached him for his opinion.  Both Stephen Polcari and E.A. Carmean wanted him to weigh in and in two short, concise letters, Thaw demurred.  He didn’t exactly say they were inauthentic and he gave some excuses, saying he was ‘unwilling’, or ‘the committee is dissolved and I’m not really doing this sort of thing anymore’…that kind of thing. 

Freedman’s lawyer, Luke Nikas, pointed to some of these phrases and noted that Thaw never said any of the Pollocks were inauthentic in the letters.  He asked Thaw if he had ever told these two scholars that any of the works were inauthentic to which Thaw replied “No…but the language I was using meant they were wrong.”  

Here, spelled out for all to see, is the problem we all have at the moment in the art world with authentications.  Thaw made it clear to the court that he thought the paintings were fake, but he was not willing to come right out and say it.  He had to resort to nudges and winks in an attempt to convey his doubts, signals that Carmean and Polcari evidently failed to pick up on. 

Should they have known?  That is a question for the jury.  Most people I speak with in the art world think they—and Freedman—should have.  But in a legal sense, I can easily see the jury making the reasonable observation that Thaw’s letters were equivocal; their neutrality may leave enough space for Freedman to succeed in her claims, legally. 

As I understand it, there simply was no upside for Thaw to make a public statement...he would be at risk of a disparagement claim and some hefty legal bills.  He could, of course, have entered into a private agreement with Knoedler to give his opinion without such risk, but what was in it for him?  He had already used his silent dog whistle to Carmean and Polcari and it was up to them to heed it.  Thaw seemed quite disgusted that they didn’t.  It is a shame that experts like Thaw cannot speak freely in the current legal environment, a lot of grief might have been avoided.


After Thaw came the affable dealer Jim Kelly.  Kelly has a well-regarded gallery in Santa Fe, where he opened in the 1990s, but he has been on the scene longer than that.   He explained that in addition to running a gallery, he often worked as an art consultant, and that he did so for the De Soles.  Kelly referred to them as both “friends and clients” and used their first names.  He said his involvement with the current mess had to do with the De Soles asking for his figure out what the proper selling price of the painting should be.  (The painting itself is not on view, but I could see it propped up behind the screen in the courtroom).

Kelly saw the painting and was proffered the list of 10 or so experts who had supposedly praised the work and he explained that he was under the impression that “they had approved it”—meaning they had said it was authentic.  He was asked if he ever did research into provenance when he was involved in a transaction, to which he replied that when he was on the buy side, he did not…only as a seller. Anyway, he was called in to consult on price and that is what concerned him the most.  Using his network, expertise and auction records, Kelly concluded that the ask, $8.5 Million, was fair, but his clients asked him to try and get a discount.  He called Freedman and she offered $200,000, which he could ‘do with as he wished’.

It was at this point that Kelly got a little shaky.  Freedman was giving him $200,000, but he was to decide how much of that was a discount that would flow to the De Soles and how much was his commission. Kelly decided that he would take $100,000 and give the De Soles a $100,000 break.  He interrupted his testimony and went back to this bit of information and it seemed clear to me that at that time, his clients were not aware of how much he was going to make and he seemed slightly embarrassed. At any rate, this line of questioning was shut down.  The art world is full of these transactions, where principles don’t know how much the middle men make, so it’s not really that big a deal, but Kelly did seem a little delicate about all of this.  This trial is laying bare all sides of a number of transactions and nobody seems particularly happy about it.

Another interesting document is the invoice itself.  Knoedler actually invoiced Kelly, who tacked on his commission and then invoiced their daughter.  This is rather inconvenient and probably required all sorts of legal calisthenics to allow the De Soles to sue Freedman.  I don’t pretend to understand how this happened, but the complaint does refer to Kelly as their ‘agent’. 

I had to leave when the lunch recess was called, the defense was asking him about another Rothko that he had advised the De Soles to buy where a good bit more due diligence seemed to take place.

Kelly, a well-liked ADAA member, seems to be yet another person who sustained collateral damage in this case, but the De Soles seem not to blame him and I expect he will take his lumps here and move on.

Unfortunately, I won’t be able to make it in to court tomorrow, but plan on attending some sessions next week.  Stay tuned.

Wednesday, January 27, 2016

The End of an Era--The Knoedler Trial Marks the Passing of the Classic UES Gallery

Upper East Side galleries like the kind Knoedler was are a dying breed.  Gone are the days when American paintings commanded more attention than contemporary art, or when people could see a dozen solid shows walking down Madison Avenue from 79th Street to 70th Street.  Real estate prices, the internet, changing collector habits and so forth have all played a role in this process, as has the general tendency in New York City towards change.  New York changes completely every twenty years—the energy of each generation transforms our great city in such a way as to make it unrecognizable to the last.

Gone as well (I think) are the days when a collector will buy a secondary market Post War work of art for seven figures which has no documentation whatsoever, with only the assurance from a respected dealer that it is authentic.  While the above factors can also be blamed for this, the activities on the Upper East Side that have been discussed at the Federal Courthouse in downtown Manhattan this week are probably more of a factor. 

I was reminded of the fact that galleries used to be different by two witnesses who appeared in court this morning at the Knoedler trial.  The first was Jaime Andrade.  People like him were a fixture of uptown galleries back in the day.  It would be impossible to say exactly what they did, but they were usually the first person a visitor would see at the gallery…not sitting at the front desk, but perhaps opening the door, carrying something heavy…just somehow there whenever anyone dropped by.  Galleries then, as now, typically hired attractive young women to staff the front desk but these jobs have always been a stepping stone for ambitious recent college graduates who would not be accustom to the various passersby.  By contrast, men like Andrade had decades on the job and thus knew everybody who might enter the premises from the Rockefellers to the homeless.  They had been to client’s homes to install works, and to artist’s studios. They went to the post office to add funds to the franking machine, they hung the shows and they made it in through blizzards.   In short, they were the institutional memory of these galleries, an integral part of day-to-day operations who added character to the shop. 

Ann Freedman’s attorney, Luke Nikas, stated in his opening that Glafira Rosales had used Andrade as a conduit into the gallery, making it seem as if the shifty grifter had taken advantage of a low-level functionary at Knoedler to gain access to the people in control. I missed the beginning of Andrade’s testimony yesterday, but Nikas had an opportunity to question him today and did not, so I assume that Nikas didn’t have the guts to hear what Andrade had to say about this theory.  I can’t say with any certainty that Nikas is wrong, but it doesn’t sound right to me.  Anyone who wanted to get through the door at Knoedler would have had to get past this guy, and it wasn’t his job to find consignors for Freedman but rather to make sure that they felt comfortable whenever they visited. 

Andrade was dressed to the nines in court, with a wool three-piece suit and matching hat, and seemed to me proud of what he had accomplished in this career.  I am not sure what the reason was to drag him through all of this, excepting that he seems to have been one of the gallery employees that encountered Rosales regularly.  In his testimony, I think I heard him say that he had worked for Sidney Janis as well as for Richard Feigen.  English is not his first language and I may have been wrong.  But someone should interview this man for posterity, he probably knows more about art and the art business than most. 

Next up was Melissa De Medeiros, a long-time employee of Knoedler who worked there from 1984 – 2013.  That is just the way these places used to roll.  These days, if people stay at a company for more than 5 years it is remarkable.  At places like Knoedler, you’d still be a newbie.  De Medeiros was asked what her job was, which she had trouble answering.  She’d had no precise title for much of her time; she’d done a lot of things--been in the library, oversaw administration and, unfortunately for her, she was Freedman’s assistant for a couple of years right when the Rosales situation came to a boil.  Again, this was so typical of the way these galleries ran; one or two people would handle sales and everybody else did everything else.  Galleries, even big ones like Knoedler were not organized like corporations.  This is not to say they didn’t make money, but rather that the way in which collectors and galleries interacted was intentionally low-key and a little bit slow-paced.  Collecting in these places was supposed to be more of a hobby than anything else, so galleries tried not to behave like a grubby retail operation. 

De Medeiros came across as knowing her stuff.  The judge asked her early on who were some of the names on a list of artists and she told him clearly and succinctly, even dropping in the year of Milton Avery’s birth without consulting her notes.  In her testimony, she revealed that even in 2007, Ann Freedman was dictating emails to her, which she would send to clients on her boss’ behalf…talk about old school!  Even more old school, despite it being the 21st Century, she typed up a number of memos and letters which were entered into evidence and shown to the jury.  These all centered on Freedman’s interactions with Rosales. 

The plaintiff’s attorney, Gregory Clarick, walked her through the various written documents.  Watching legal dramas on TV is way better than sitting in court, which can actually be quite boring.  Every time a new scrap of paper came to the top of Clarick’s pile, he had to hand two copies up to the bench, one for the witness and the other for the judge, then the witness had to recognize it, whereupon Clarick requested it be admitted.  The two attorneys on the defense (one for Freedman and the other for the holding company that owned Knoedler and which actually has assets to pay the huge damages claimed by the plaintiffs) both state they have no objection, so the judge says the evidence is admitted, and then Clarick asks permission to show it to the jury on the screens in front of each of them, which is then granted.  Over and over and over. 

This was frustrating for an observer but the strategy became clear.  In looking at the various memos recording encounters between the two, Clarick was trying to show that Gonzales changed her story about how these fakes had been purchased and that she also changed the contents of the collection to match up with what Freedman asked about.  For example, initially, no Jackson Pollock works were mentioned, but when Freedman asked if there were any, some appeared.  His point seems to be that someone should have smelled a rat.

Clarick asked De Medeiros about all of the research that she did in trying to authenticate the various fakes or to verify other parts of Gonzales story.  He asked numerous times if there was any specific documents that she found at the Archives of American Art and elsewhere, to which De Medeiros replied that she found convincing evidence that the stories could be true but that she had not found any documents.  She had obviously worked her ass off trying to find something to support the authenticity of these works on behalf of her employer.

I had the distinct impression that De Medeiros was somewhat of a hostile witness.  A few times Clarick alluded to her previous testimony and implied that she was contradicting herself and in general she made his life a bit difficult, being prickly about wording and so forth.   But here was a woman who had spent almost 30 years working at a prominent gallery, for whom this collection of works, now known to be fakes, was likely a high note of her career.  Freedman undoubtedly made her aware of the importance of this work—at one point, De Medeiros even testified that Freedman referred to the consignor as the gallery “Secret Santa”.  Who could blame her if she wanted it to be clear that she had given it her best shot?

Art Historical research is always a bit hazy; the words ‘might have’ and ‘likely’ are often as best as one can get in these situations.  The art historian does not write legal documents…or invoices for that matter.  De Medeiros must have known that the stakes were high.  She obviously worked very hard to establish a link between what was being told to her by Freedman and Rosales and what was in the record and there was no upside for her to come back empty-handed.  Was she in on the racket?  Hard to imagine…nothing so far has been suggested along these lines.

Regardless of how this all ends, I am struck by the fact that an era in New York is over.  This is not a tragedy—things change.  And Knoedler might well have disappeared without Freedman’s help (one expert has determined that absent all these fakes, the operation was not a going concern).  These two employees with decades of service might not have jobs today even if Rosales had never walked in the door.  But both of them had to testify today and it certainly seemed as if both of their careers are over.

Tuesday, January 26, 2016

The Empire Strikes Back - Ann Freedman's Team Opens Her Defense

Ann Freedman, the art dealer at the center of the Knoedler art forgery debacle, stood in open court today and was introduced to the jury hearing the case brought against her and her former employer.  Freedman’s lawyer Luke Nikas, a partner at the prominent law firm Boies, Schiller & Flexner began his defense of his client with an opening statement that not only laid out the facts that rebut the plaintiff’s assertions that Freedman knowingly committed fraud and conspired with others to defraud them but also sought to humanize her.  Unfortunately, I was unable to attend yesterday’s proceedings, and had to leave before Nikas finished but I look forward to hearing more.  The case offers a rare opportunity to observe the machinations of the art world, as well as to document the numerous pitfalls that exist for any professionals that are involved in buying and selling fine art, particularly on the secondary market.  I must confess, too, that it is gripping entertainment, watching one of the formerly most powerful dealers in New York face an angry client in front of a federal judge and jury.

One image where copyright is not an issue
Luke Nikas is a soft-spoken lawyer who does not seem given to hyperbole.  At one point, the court reporter asked him to speak up, and his strategy here may have been to seem unfazed by the many accusations hurled at his client the day before as well as to project a sense of calm.  Regardless, his straightforward manner served him well as he walked the jury through Freedman’s version of the situation.  His first task was to explain Abstract Expressionism to the jury—no easy job under the best of circumstances.  He focused on three of the major names, since they are all painters whose works are involved in the case:  Robert Motherwell, Mark Rothko, Jackson Pollock, and made the point that they were all basically alcoholics whose lives were hectic and for whom record-keeping was not a priority, the obvious point being that unlike a car, for example, there is not necessarily a paper trail for the sale of works of art…even ones which later trade for millions of dollars.  Talking about a complicated, rather inaccessible thing like gestural abstraction to a group of lay-people who probably would rather not be on jury duty is not my idea of fun, but Nikas hung tough and should be forgiven for resorting to showing the scene where Pollock trades a painting for beer and falls off his bike from the Ed Harris 2000 biopic on the artist. 

Nikas then described the various ways that fine art is proved to be authentic in the marketplace, stating that dealers turn to conservators, connoisseurs and art historians for this.  He made what was, for me, the rather stunning assertion that “an art dealer is not an art expert,” going on to say that they are really just salespeople who need to hire others to vet the things they deal in.  This would be a surprise to the Art Dealer’s Association of America, of which Knoedler was a member, whose mission statement clearly states that it seeks to “promote the highest standards of connoisseurship [and] scholarship” in the profession.  It must have been beyond painful for Ann Freedman to hear her lawyer say that about her.  No dealer at that level would want to be seen as merely a salesperson, without any expertise, but here is one reason why the case is such sensation in the art world—the entire concept of trusting dealers is being sullied.

Nikas went on to show that numerous experts stood up for the material Freedman was selling in an effort to demonstrate that she had good reason to believe it was authentic.  It should be noted that his strategy here was shrewd; obviously these situations are two-way streets but Nikas made it seem as if experts always operate free of any outside influences.  These opinions were not offered in a vacuum however; they were approached directly by Freedman, the director of Knoedler, which was a powerful gallery with an impeccable reputation.  The fact that Freedman was entertaining the possibility that these works were authentic would have shaded their thinking. 

While he wasn’t being really nasty, this part of Nikas’ opening statement in effect dragged the reputations of a lot of experts through the dirt.  E.A. Carmean, who was a powerful curator in the 1980s and 1990s before becoming an Episcopal priest (and who joined Knoedler as head of research in 2003), wrote a letter that praised one of the works in the mess.  Dana Cranmer, a conservator who worked closely with the Rothko Estate in the 1980s said she thought at least one of the ‘Rothkos’ was authentic.  David Anfam, a noted scholar and author of a Rothko catalog raisonne was also apparently fooled as was the curator Laila Nasr.  Even dealers David Mirvish and Ernst Beyeler along with Christie’s auction house were included as those who had accepted the authenticity of some of the various works.   In addition to providing cover for his client, Nikas was trying to steal some of the plaintiff’s thunder, as many of the above are scheduled to testify and he wants to undermine them should they go on record as having had doubts about the paintings. Nikas wasn’t saying that they were stupid; his point was that these were really, really good forgeries and could have fooled anyone.  But again, how awful for these men and women.

Before he got too far into all of this, Nikas asked his client to stand up and he presented her to the jury.  He described Freedman as coming from a modest home and that she had worked hard to get to where she was.  He also pointed out that she continues to be active as a dealer.  He spoke of her 47-year marriage and her 30 years at Knoedler, pointing out that loyalty was important to her.  It was a touching moment, and one meant to humanize her.  Freedman does not enjoy a resounding amount of support in the art world in general at present and I doubt that this trial will do much to change anybody’s mind.  But the jury had heard so many awful things about her, I felt it was an effective part of the opening statement.

Nikas went on to point out that initially, Freedman made very little money herself on the various forged paintings that passed through Knoedler, which, according to his argument, undercuts the notion that she was a greedy conspirator from the beginning.  He painted her as a victim who gradually got ensnared by a crook.  He pointed out that on a number of occasions, Freedman used her own money to buy works from Glafira Rosales, and that ‘she believed in these works’.  Again, remember, Freedman was at the top of her profession before this scandal broke.  Now she is paying a top lawyer to say that she was an easy mark for a two-bit hustler who played her for a fool, concocting stories and feeding her valuable forgeries at tempting prices.

I plan on attending more of the trial and look forward to hearing from the many witnesses on the list and will have some more thoughts as time goes on.  My takeaway at this point is that an appraiser—and any professional honestly-- should always think about what their work and their actions would look like in court.  Because when a trained, skillful lawyer who has the time and resources to go through a dispute starts talking about you in a courtroom, you are probably not going to like what they say—unless you are paying them yourself and then things are infinitely worse.