Monday, February 8, 2016

Ann Freedman Punts but the Trial Continues

The news broke this morning that Ann Freedman and Mr. & Mrs. De Sole had reached a settlement of the lawsuit between them.  Freedman’s attorney Luke Nikas told the New York Times that “Ann is pleased to be able to reach this settlement…From the very beginning of these cases, Ann never wanted to keep a penny of the profits she made…[from the sales of the fakes].”    Remind me to hire Nikas if I never need to explain a horrible mistake in public, that is certainly one of the nicer things one could say about the settlement.

(Although the Times got the scoop over the weekend about the settlement, I would like to point out the ongoing heroic efforts of our art press in this trial.  Artnet has had a recap of today's events up since 7 PM).

Naturally, the details of the settlement are strictly confidential, and the judge (I was told) made it clear to the jury this morning that they should draw no conclusions about the settlement one way or another as the case is still proceeding against 8-31, the holding company that owns Knoedler.  I missed the morning session, but was able to attend the afternoon proceedings.

While the jury was told not to draw any conclusions, that certainly did not stop the rest of us from doing just that.  Freedman has claimed for years now that she too was a victim and that she was delighted that this case is going to trial so as to clear her name.  Settling at this juncture does the exact opposite.   From my perspective, then, the only logical way of interpreting the settlement is that Ann Freedman caved in because the trial was not going well for her.  It seems to me very unlikely that the De Soles (who do not seem to be under any financial pressure whatsoever) would have felt that way about the trail, since a number of the witnesses, such as Jack Flam and James Martin, performed well for them last week.  Seeing as Freedman had to know that all this would come out, I do wonder what took her so long to settle.  I assume that she and her attorneys had access to the gist of the testimony that was going to be presented in advance of the trial, but maybe they thought they could spin it.  Or maybe Freedman was being unrealistic and it took the experience of the trial to change her mind.  At any rate, this is all speculation.  The fact is, she is no longer a direct party to these proceedings, except that she will testify soon. 

I have to admit, when I read about the settlement this morning, I was very concerned that the whole thing would settle and we wouldn’t get to hear from her, but that does not seem to be the case.  We might get her as early as tomorrow.  It is odd that Luke Nikas is no longer sitting at the defense table.  He was always sort of the Good Cop to Charles Schmerler’s gruffness.  Schmerler also did all of the objecting, allowing Nikas to benefit without having to look so mean.  It is just weird that is so much empty space on the defense’s side now.   I must say, I have wondered all along how the two separate plaintiff’s defense strategies might have differed, especially in light of the fact that Knoedler and Freedman parted ways very abruptly and not on good terms.  Now that she has a firm grip on just how much she will have to pay out of her own pocket, her testimony may be different from what it would have been had she still been part of the suit.  At any rate, the good news, at least from my rather selfish point of view, is that the show goes on.

While I missed the morning session, I was told it consisted of the rest of the videotaped testimony of EA Carmean.  Carmean, it will remembered, seemingly discarded all  criticality or discernment as a scholar when he started taking Knoedler’s money, becoming instead a fierce advocate for the authenticity and beauty of the Rosales fakes.  I don’t want to say too much about testimony I didn’t hear, but I was told he simultaneously claimed that he did a lot of work for Knoedler and thus deserved his income, but very little of his time was spent researching the Rosales collection. 


Laili Nasr, who has been at the National Gallery in Washington DC since 1995 working on Mark Rothko catalogs raisonne, gave testimony this afternoon (February 8, 2016).  She began helping with the catalog raisonne of work on canvas, and she is now leading the effort to complete the catalog raisonne of Rothko works on paper.  As usual with the unpaid witnesses in this matter, Nasr looked miserable and the facts of her involvement in this case have damaged her professional credibility, although not to the extent of some of the others that have come before her.

Her testimony centered on two letters that Nasr wrote, on National gallery stationary, to Ann Freedman in October 2002 and November, 2003 after Nasr saw the two Rothko fakes that came from Rosales (one of which was sold to the De Soles and the other to the Hilti Foundation).  The letters refer to the dates and the dimensions of each and both letters specifically say that the paintings “will be included” in the supplement to the Rothko catalog raisonne of works on canvas, should one be published, with a “comprehensive catalog entry.”

While the letters do indicate that no such supplement was immediately forthcoming (it has never actually been published and plans for it have been dropped), there is nothing else in them that qualifies the statement about such an inclusion in any way.  Nasr just straight-up told Freedman, in clear, unambiguous language that they were in…no ifs, ands or buts.  Today, Nasr tried to characterize these as “thank you notes”, sort of a gracious way of acknowledging Freedman’s kindness to her in receiving her at Knoedler and showing her the works in question when Nasr happened to be in New York.  She also indicated that it was an “unusual” letter for her to write, in that the language used was atypical for her and that she generally never wrote directly to dealers about specific paintings in letters such as this.

Nasr never researched any of the facts that Freidman alleged…didn’t look into Alfonso Ossorio or David Herbert, for example, but rather just did a very cursory initial examination, added them to her database of possible works and left it at that.  She or her staff did seem to ask to have some additional documentation, which Freedman promised to provide---Freedman said she was in the process of getting all that.  Nasr also asked for access to Knoedler’s own archives to help her do further inquiries, but this was never granted.  However, rather than pursue any of this further, the whole thing was dropped.  Her focus, Nasr said, was and is to get the catalog of the works on paper finished, she wasn’t even working on works on canvas at this point. 

Despite the lack of ongoing research into the works, Nasr claimed that Freedman called her often during the time period these letters were written to pester her about their inclusion the then-planned supplement to the Rothko works on canvas catalog raisonne.  Nasr claims to have tried to put Freedman off, telling her “it was too soon” to make such a determination and that she was only “considering” it.  Nasr also noted that with respect to the works on paper catalog raisonne that she is working on, she is deliberately waiting until the last minute to make authentication decisions, so as to have as much information as possible available to inform her assessments, she would never make a determination without a lot of research.

So why on earth did she write these letters?  If she wasn’t even working on a catalogue of Rothko’s paintings, what possessed her to put such text down on official letterhead?  Nasr never exactly said, outside of trying to spin them as “thank you notes” and to say that she never imagined that these letters “would have a life of their own” and that Freedman would ever tell anybody else about them.  She repeated that it was unusual for her to communicate with a gallery in this manner and that the actual words were ones she didn’t typically use.  She stared at them as if she had never seen them before.

The defense shredded her “thank you note” excuse.  These letters were written months after her visits to Knoedler and really don’t seem at all like the polite, bland notes that Nasr wanted them to read as.  They are way too specific.  The exact words about the supplement and so forth also appear verbatim in an email that Nasr wrote to Christopher Rothko’s administrative assistant.  The Rothko family had been contacted about an image use permission for one of the fakes and wanted to know what Nasr knew. The painting was in, she said, and again used the “comprehensive catalog entry” line.

Here Nasr again said that the language was so strange…she knew the people in the Rothko office and spoke to them all the time, she wondered aloud from the stand why she would use such formal words, it didn’t make sense to her.  But she did not dispute writing the email and the defense could now make the point that while the language might seem unfamiliar to her, Nasr had used it on at least three occasions.

On cross examination, the defense also showed a 2002 fax that Nasr had sent to Freedman praising the Hilti ‘Rothko’ and comparing it  to the artist’s Seagram Building series in the colors used.  While Nasr here backpedaled and stated that such a comparison could have been made “looking at two postcards” it was another instance the defense will be able to point to that Freedman was given the impression that Nasr thought the work was authentic.

There was also a close look at the matter of Nasr’s name appearing on the list of people who had “viewed” the painting.  This is a very closely related document to the one sent to the De Soles when they bought their fake, but in this case it was actually distributed at the ADAA fair in 2002, where the fake Rothko sold to the Hilti Foundation was exhibited.  Nasr’s name is one of the people on that list and quoted Nasr as saying that the painting  would be in the supplement.

Nasr had picked up this list while at the fair and noticed her name on it.  She recalled thinking it was odd for a gallery to hand out such a list an art fair and did not like seeing her name used in this manner.  She said she had never authorized Freedman to use her name in this way.  However, Nasr did nothing about it. Nasr did not complain to Freedman at the booth, and she didn’t do anything about it.  Why?  Because, Nasr said, Freedman was a very powerful woman and her gallery was in a position to be very helpful in terms of access to other Rothko works and she didn’t want to alienate her.

I have written before that there is a very uneasy relationship between galleries and catalog raisonne projects.  Dealers and scholars must interact in these matters—without such collaboration, the book will be incomplete—but the opportunity for corruption is thus introduced. 

The answer to the Nasr letters is undoubtedly lurking somewhere in this part of the equation.  I simply don’t buy the idea that Nasr was so naïve as to think that the letters would not be used by Knoedler to sell the works.   Was she trying to gain favor with Freedman for some reason?  Was there someone else at the National Gallery who caused this letter to be drafted and sent, which is why Nasr found the language so strange? Is she taking the blame for someone else’s mistake somehow?  Or was Nasr intimidated by Freedman, who obviously could be quite demanding, and simply wrote the letters to make Freedman go away? 

The plaintiffs’ redirect questions focused on the fact that Freedman never told Nasr that she had already gotten 19 paintings from the same source as the ‘Rothkos’, or that IFAR had been unable to authenticate a ‘Pollock’ or that John Elderfeld had cast aspersions on some of the ‘Diebenkorns’.  Had she known any of this, Nasr wouldn’t have written the letters.   Like many others in the art world, Nasr said she “trusted” Ann Freedman and thus gave the works the “benefit of the doubt.”  Maybe this is the answer, then…the considerable reputation of the gallery had everybody falling all over themselves to be part of an exciting art world discovery.

In short, I think this was one that went the defense’s way.  Unlike the positive reinforcement of some of the Rosales works from hired help like Stephen Polcari and EA Carmean, Laili Nasr received no compensation from Knoedler and no other factors would otherwise suggest that there was a quid pro quo.  Indeed, she is a person who has spent 15 years working on books that authenticate Mark Rothko’s art and she wrote two letters and a fax that plainly state that these things were OK.  Additionally, she saw Knoedler publically using her name and the quote about it being included and never challenged them.  Here is at least one instance where Ann Freedman can point to and argue with success that one of the foremost experts gave her an assurance upon which she relied. 

Nasr’s letters left a lot of people shaking their head in the courtroom during the break, myself included.  The letters were indeed unusual.  Nasr commands a great deal of respect and is known to be very careful, so this is probably the exception that proves the rule.  It just happened to be a very public one.

Ruth Blankschen

After the break for the last part of the day, Ruth Blankshen, a CPA who, since 2007, has been the Chief Financial Officer for Knoedler, LLC.  She is CFO of Hammer Galleries, as well, and has the same job for 8-31 Holdings, which owns the two entities.  I must say I was surprised.  I thought Knoedler went out of business, but it appears to still be a going concern.

She is a hostile witness for the plaintiffs, obviously, since her boss is on the hook for $24 Million if they lose this case.  She tried to run out the clock a bit by being difficult, making the attorney questioning her spend 10 minutes establishing that Knoedler pays her salary but she does a lot of work for 8-31 as well.

The general thrust of the questions seemed to be to establish that 8-31 and Knoedler were not operated at an arms-length, despite the various corporate documents that require them to be.  Money seemed to flow between them without invoices and 8-31 did not perform the services it was supposed to.  This makes sense; the plaintiffs want the jury to start thinking of them as one entity.  If 8-31 tries to play it like Ann Freedman was concealing wrong-doing from them, the fact that they shared office space, phones and email, and pushed money around freely will undermine that. 

Blankschen will be on tomorrow as well and is sure to try and drag it out some more.  This is probably damaging stuff, but it can be made to seem both boring and technical and I think she will try to do just that.

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