The Legislative History of NEA and NEH

Art like life should be free, since both are experimental.

~George Santayana

by Emily Lanza*

NEA NEHOn March 16, 2017, the President of the United States announced his proposed budget for 2018, which outlines his plans to eliminate the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH). Notwithstanding the political arguments surrounding this issue or a likelihood of manifestation of these plans, in order to fully grasp their intended role and current impact on the arts and humanities communities, it is important to consider why Congress created these agencies in the first place, over fifty years ago.

Legislative history not only reveals the past but also informs the present, specifically the basic role of an agency or program. Thus, in order to create a more comprehensive and convincing argument in favor of these agencies having a future, we must first turn to the past. This article considers the significance of the two agencies from a legislative history perspective and examines how the legislative history can affect the future of these programs.

Overview of NEA and NEH

The United States is one of few nations not to have a Ministry or Department of Culture. Instead some of the duties a Ministry of Culture would undertake are designated to the NEA and NEH. Both agencies are part of the National Foundation on the Arts and the Humanities (“National Foundation”). The National Foundation was established by the National Foundation on the Arts and the Humanities Act of 1965 (“Act”) to promote a broadly conceived policy of support for the arts and humanities throughout the United States. The NEA provides financial grants to individuals, nonprofit groups, and the States to support engagement in the creative and performing arts while the NEH provides grants to support academic and scholarly humanistic teaching, learning, and research.

As independent agencies, the NEA and NEH each have a chairman and an advisory council. Appointed by the President with the advice and consent of the Senate, the chairman of NEH and the chairman of NEA are leaders in his/her particular field. William Drea Adams, an educator and the current NEH chairman, had previously served as President of Bucknell University and Colby College. With a background in arts administration, Jane Chu currently serves as the chairman of the NEA and is also herself an accomplished artist and musician. 

While congressional appropriations are the primary source of funding for both agencies, the NEA and NEH can accept tax deductible donations including gifts of stock and other property. However, under government ethics restrictions, these agencies may accept donations from an organization that is eligible for an endowment grant “only if that organization confirms in writing that it has not received a grant in the past three years and does not intend to apply for a grant for the next three years.”

Legislative History of the National Foundation on the Arts and the Humanities Act of 1965

Bills proposing the National Foundation were introduced in the House of Representatives and the Senate on March 10, 1965. The Special Subcommittee on Arts and Humanities of the Senate Committee on the Labor and Public Welfare and the Special Subcommittee on Labor of the House Committee on Education and Labor held hearings on the proposed Foundation during February and March of 1965. By September of 1965, an amended Senate Bill (S.1483) passed both houses, and President Lyndon Johnson signed the National Foundation on the Arts and the Humanities Act of 1965 into law.

Congress heard over fifty witnesses during seven days of hearings to discuss the proposed National Foundation on the Arts and Humanities, providing a robust legislative history. Three themes arise from the legislative history of this Act and the foundation of NEA and NEH: (1) the need to support the arts and humanities financially; (2) such support is in the national interest; and (3) that the federal government should accept the role and responsibility of providing this support.

The Need for Financial Support of the Arts and Humanities

According to the legislative history for establishing the National Foundation, Members of Congress and the relevant stakeholders at the time naturally focused on the financial needs of the arts and humanities, as the fundamental purpose of these agencies is to provide grants. However, Congress did not intend the National Foundation to serve as the only or primary supporter of arts and humanities in the United States, instead it was to act as a catalyst that “stimulate[s] private philanthropy for cultural endeavors and State activities to benefit the arts.” Congress noted that private financial support in the arts and humanities was “lagging,” as the number of endowment and foundation gifts to arts and cultural institutions was dropping. In order to encourage such donations, Congress authorized the proposed agencies to match funds donated from private sources, for Congress believed that financial support originating from multiple sources best reflected the operations of a democratic society.

Similarly, through the agencies’ state grant programs, Congress intended to increase the opportunities for access to the arts and humanities for everyone across the country. Congress hoped that encouraging and supporting the arts and humanities at the local level would allow a greater number of citizens to enjoy and appreciate the arts beyond those that live in the nation’s cultural centers. Thus, this collaborative approach between the federal and state governments towards funding the arts and humanities represented a recurring theme in the legislative history, ultimately shaping the structure and activities of the agencies.

National Interest in Supporting the Arts and Humanities

The importance of the arts and humanities to the nation was another predominant theme during the legislative history of the National Foundation on the Arts and the Humanities Act of 1965 and the creation of NEA and NEH. Together Members of Congress and stakeholders at the Hearings discussed the role of the arts and humanities in developing a successful democratic society. More specifically, many people explained that the arts and humanities teach us to think, to express ourselves, and to solve problems – all valuable and necessary qualities of productive citizens of a democratic society. Barnaby C. Keeney, President of Brown University and the Chairman of the Commission on the Humanities, eloquently stated:

“Only through the best ideas and the best teaching can we cope with the problems that surround us and the opportunities that lie beyond these problems. Our fulfillment as a Nation depends on the development of our minds; and our relations to one another depend upon our understanding of one another and of our society. The humanities and arts, therefore, are at the center of our lives and are of prime importance to the Nation and to ourselves. Very simply stated, it is in the national interest that the humanities and arts develop exceedingly well.”

Related to the civic benefits of the arts and humanities, Members of Congress and stakeholders also discussed the role of arts and humanities in education and employment – two issue areas of particular relevance to many throughout the country. Several witnesses, including the Commissioner of Education, mentioned the role of arts and humanities as a necessary component of a well-rounded education program from grade school to university. Similarly, others considered how the arts and humanities provide opportunities for employment and encourage people to realize their potential in their chosen fields by allowing them to acquire and develop certain skills – namely the skills involving expression and critical thinking.

Lastly, Members of Congress emphasized that the arts and humanities benefit the whole nation by assisting with our understanding of other peoples and cultures and by maintaining a positive image of the United States throughout the world. According to Senator Kennedy, arts and humanities “provide a vehicle for understanding and respect between men of all races and cultures.” Both the Senate Report associated with the Act and the Hearings explained that dedicated federal agencies to the arts and humanities “would serve not only to deepen our understanding of our friends and allies throughout the world, but would strengthen the projection of our Nation’s cultural life abroad, and enable us better to overcome the increasing ‘cultural offensive’ being waged by Communist ideologies.” Congress noted that the arts and humanities act as important cultural ambassadors both at home and abroad.

Federal Government Role in the Arts and Humanities

While legislative history reveals that Congress generally agreed about the importance and the need for financial support of the arts and humanities, perhaps the most critical issue discussed during the Hearings was the federal government’s role and responsibility in these areas. Those involved in the legislative history of the Act believed that the federal government’s interest and leadership in the arts and humanities would serve as the most effective manifestation of the national importance of these fields. Several remarked that the federal government’s involvement in the arts and humanities would “set[] a national tone of interest” and thus generate more visibility for the arts and humanities at the national level. Similarly, other stakeholders at the Hearings noted that the federal government is the best entity to foster cooperation between organizations and other government agencies by offering coordination and direction at the federal level.

Moreover, the legislative history demonstrates that many Members of Congress were keenly aware of the federal government’s involvement in another academic field: science. In the 1960s at the height of the space race, the U.S. government placed significant emphasis on science and technological development, which was viewed at that time as a priority for national security. One witness remarked during the first day of the hearings that a “substantial proportion of our attention and our national budget is directed toward motion in space. Our aspirations and goals are linked, literally, with the moon and the stars.” Congress intended with the National Foundation on the Arts and the Humanities Act to correct the imbalance between federal support for science and federal support for the arts and humanities.

Using the Past to Guide the Present & Future

So what does the legislative history of the National Foundation on the Arts and the Humanities Act of 1965 tell us about the present and future of the NEA and NEH? One of the points of delving into an Act’s legislative history is to understand congressional intent. In the case of the National Foundation on the Arts and the Humanities Act, Congress intended to bestow on the federal government the responsibility to support, both financially and administratively, the arts and humanities. In order to justify this responsibility, Congress repeatedly referred to the basic fundamentals of our society and nation that are as relevant today as fifty years ago and, consequently, will likely be as relevant fifty years from now.

These fundamental principles include democracy, productivity, and leadership. In 1965, Congress understood that these principles, which are entwined with the arts and humanities, make up the foundation of our society and country. Congress favored a democratic approach towards funding the arts and humanities in which the federal government collaborates with private donors to fund projects that would enable a greater number of people across the country to enjoy and benefit from the arts and humanities. Congress also highlighted that the arts and humanities foster the productivity of the nation’s citizens, by providing opportunities to develop critical skills necessary for success in the context of education and employment. Likewise, the arts and humanities are important vehicles to demonstrate American influence and leadership at home and abroad.

While the specific concern about the threat of “Communist ideologies” may be indicative of the 1960s, the service that arts and humanities can provide to the nation as a whole is still relevant today. Such relevance stems from the universal and democratic principles that shape our identity as a nation and society, which Congress discussed and debated while creating the NEA and NEH during the legislative history of the National Foundation on the Arts and the Humanities Act of 1965.

In 2016, Congress appropriated $148 million (0.003 percent of the budget) to the NEA and the same amount to NEH. Considering the $3.9 trillion budget of the federal government, the NEA and NEH offer bargain services to provide the basic fundamentals of an enlightened citizenry, democracy, productivity, and leadership. Cutting these agencies, while only a small part of the federal budget, would have a disproportionate impact on the prosperity of the nation. The nation cannot afford to ignore the lessons and insight revealed by the legislative history of these two agencies formed only fifty years ago. 

Select Sources:

  • Executive Off. of the President of the U.S.: Office of Mgmt.& Budget, America First: A Budget Blueprint to Make America Great Again,5 (2017), available at https://tinyurl.com/k9aj588.
  • Pub.L.No.89-209,79 Stat.845 (1965). Preamble to the Act “To provide for the establishment of the National Foundation on the Arts and the Humanities to promote progress and scholarship in the humanities and the arts in the United States.” Pub.L.No.89-209,79 Stat.845 (1965).
  • 20 U.S.C.§ 954(b),(c),(f).
  • 20 U.S.C.§ 956 (a), (b),(c),(f).
  • See, e.g.,NEA,2015 ANNUAL REPORT 14 (2016), available at https://www.arts.gov/sites/default/files/2015%20Annual%20Report.pdf.
  • 20 U.S.C.§ 959(a)(2).“Other property” can include works of art.
    NEA, ABOUT THE NEA: DONATE, available at https://www.arts.gov/about/donate.
    H.R.6050,89th Cong.(1st Sess.1965) (introduced by Rep.Thompson,D-
    NJ).
  • S.1483,89th Cong.(1st Sess.1965)(introduced by Sens. Pell D-RI, Javitas R-NY, Gruening D-AK). Hearings were held on February 23-26 and March 3-5,1965.
    President Lyndon Johnson remarked at the signing of the bill that “What this bill really does is to bring active support to this great national asset, to make fresher the winds of art in this great land of ours.The arts and the humanities belong to the people, for it is, after all, the people who create them.” The American Presidency Project,“Remarks at the Signing of the Arts and Humanities Bill,” http://www.presidency.ucsb.edu/ws/?pid=27279.
  • S.REP.NO.89-300 (1965). National Arts and Humanities Foundations: Joint Hearing Before the Special Subcomm. on Arts and Humanities of the S.Comm.on Labor and Pub.Welfare and the Special Subcomm. on Labor of the H.Comm.on Education and Labor,89th Cong.5,54 (1965)(hereinafter “Hearing”) (statements of/by Sen.Jacob K.Javits, Sen.Edward M.Kennedy, Rep.John E.Fogarty, Dr. Barnaby Keeney, Pres., Brown University; and Chairman,Commission on the Humanities, Roger L.Stevens, Chairman, John F.Kennedy Center for the Performing Arts; testimony and statement of Francis Keppel, Commissioner of Education; John A.Ryan,President,Philadelphia Federation of Teachers, and American Federation of Teachers,AFL-CIO; Rep.John E.Fogarty; Rockefeller Panel Report on the Future of Theater,Dance,Music in America; statement of Alvin C. Eurich, Pres., Aspen Institute for Humanistic Studies; remarks of Sen.Pell; statement of Francis Keppel, Commissioner of Education).
  • Philip Bump,”Trump reportedly wants to cut cultural programs that make up 0.02 percent of federal spending,” Wash.Post. (Jan.19,2017), available at https://tinyurl.com/lsl5rjm.

*About the Author: Emily Lanza is currently Counsel for Policy and International Affairs at the U.S. Copyright Office. She received her J.D. in 2013 from the Georgetown University Law Center. Prior to law school, she studied archaeology and worked for museums in various capacities. She can be reached at emilyla8@gmail.com.

From the Author: While many of the readers of this article are already aware of the importance of arts and humanities funding, this article, instead intends to select concepts from the legislative history that may be used to inform future discussions.

Disclaimer: The opinions expressed here are solely of the author and do not express the views and opinions of the U.S. Copyright Office.

WYWH: Recap of “Art, Law and Crisis of Connoisseurship Conference”

By Marie H. Kramer*

Screen Shot 2015-12-10 at 5.28.08 PM.pngOn Tuesday, December 1, 2015, the conference titled, “Art, Law and Crises of Connoisseurship” took place at The Society of Antiquaries of London, Burlington House, London, UK. It was an international conference organized by ArtWatch UK, the Center for Art Law and the London School of Economics Cultural Heritage Law (UK). The program featured nineteen speakers, including artists, art historians, scientists and lawyers from Western and Central Europe as well as the United States, discussing how the ‘eye’ of the connoisseur interacts with art history and law. The conference was divided into three parts.

Part I: The Making of Art and the Power of Its Testimonies

Michael Daley, Director of ArtWatch UK and one of the program organizers, opened the conference with his essay “Like/Unlike; Interests/Disinterest,” which focused on the 1991 trial of Professor James Beck in Italy. Columbia U. Art History Professor Beck was accused of aggravated criminal slander (which carried a possible three year imprisonment) for his critical comments on a restoration of the sculpture, an effigy of Ilaria del Carretto in Lucca Cathedral. Beck had opined that the restorer ruined the sculpture by stripping its ancient patina to remove scratches and covering it with oil to create a new, shiny surface. Beck was ultimately acquitted of the charges setting precedent for the protection of future criticism of art restoration. After the trial, Beck and Daley joined forces to set up ArtWatch International, an organization dedicated to advocate for the protection of art against harmful restoration. The full story of the trials can be found in the book, Art Restoration: The Culture, the Business and the Scandal, co-written by Beck and Daley, which also includes criticism of the cleaning of Michelangelo’s Sistine Chapel frescoes. Daley showed examples of the restoration effects on the Sistine Chapel, where delicate layers of shadow that the master painted himself, were removed under the guise of ‘cleaning’ off dirt deposits.

Next, Euphrosyne Doxiadis, a Greek painter and scholar, spoke about her three decades of research and criticism of the Rubens attribution of Samson and Delilah in the National Gallery in London. Her research of the provenance and the work revealed engravings and other painted ‘eye witnesses’ (copies made of the original Samson and Delilah painting by Rubens) that she contends do not match the version currently hanging in the National Gallery. Additionally, using her artist’s eye and the availability of high-resolution digital photographs, she observed visible differences in brush strokes from known Rubens paintings, as well as the use of different pigments. This is especially important because Rubens only used different red pigments to shade and highlight his red areas, rather than the white pigment used to lighten the red dress of Delilah in the National Gallery version. Now, still, Doxiadis continues to struggle to get her opinions heard and recognized by the National Gallery.

Jacques Franck, a French art historian and painter trained in Old Master techniques, explained “[w]hy the Mona Lisa would not survive modern day conservation treatment.”  Franck, who is a recognized authority on Leonardo da Vinci, has conducted an extensive investigation of the techniques used by Leonardo, especially his ‘sfumato’ (‘smoky finish’) method, in which colors and shades melt into one. Franck, who believes he has discovered how Leonardo accomplished this technique based on his years of personal experimentation, explained to the conference attendees that Leonardo applied ultra-thin layers of glaze and pigment to make his transitions, each layer only a few micrometers thick. Franck suggests that, clearly, modern conservation techniques that ‘clean’ off any of these thin layers of glaze would destroy the Mona Lisa and other Leonardo masterpieces.

With a continued focus on Leonardo Da Vinci, Ann Pizzorusso discussed the master’s work from the perspective of a geologist. Pizzorusso is a US professional geologist and a Renaissance scholar. She explained how geology can be used as a tool for determining attribution. Specifically, she noted that Leonardo was renown, not only as an artist, but also as a scientist. Leonardo carefully studied geology and botany, making extensive drawings of the world around him. Comparing the Virgin of the Rocks compositions hanging in the Louvre and in the National Gallery of London, Pizzorusso noted some odd differences. She could plainly identify the various rock formations in the Louvre version, but not so with the National Gallery version. Additionally, she noted that the plants in the National Gallery version, according to a botanist she consulted, were imaginary – not the precise petals and foliage of actual plants – a mistake she doubts Leonardo would ever make. Thus, she questions the attribution of the painting in the National Gallery.

Robin Clark, Sir William Ramsay Professor Emeritus at University College London, an inorganic chemist and spectroscopist, gave a fascinating discussion of the use of Raman microscopy (RM) to identify pigments in the palette of artwork. He explained how every pigment has a distinct pattern of scattered photons that can be seen after focusing a laser beam through a microscope—collectively referred to as its Raman spectrum. This unique pigment identifier is invaluable in determining the composition of the pigments and can give tremendous insight for authenticating and dating artwork, as well as conservation and restoration.

Unfortunately Segolene Bergeon-Langle, France’s Honorary General Curator of Heritage and a member of the Louvre’s preservation and conservation committee, was unable to attend the conference, but she provided her remarks, and Daley presented her main points about the relationship between science and art. She contends that scientific analysis can cause restorers to overlook the original artists’ formulations. For example, during the restoration of Leonardo da Vinci’s The Virgin and Child with Saint Anne, in the Louvre, the Louvre’s international advisory committee on the restoration concluded that there was blanching (whitening) of a layer of varnish due to moisture or ageing that needed to be removed. Bergeon-Langle strongly disagreed, recognizing that the whitened area was not a later varnish to be removed, but was original to the painting – and perhaps a device used by the painter. She resigned from the restoration advisory committee in protest to the removal of the varnish and ‘over-cleaning,’ which left a visibly brighter composition. As an advocate for responsible stewardship, she contends that different fields of science and connoisseurship need to work together, so that the proper scientific questions are asked, and to permit art connoisseurs to work with scientists to collaboratively analyze and understand the true meaning of the results.

Michel Favre-Felix, a French painter and President of ARIPA (Association for the Respect of the Integrity of Artistic Heritage), discussed how some art restorers have dramatically changed certain works of art because they failed to look at the testimony of historical copies. One of the restorations he discussed was Veronese’s The Pilgrims of Emmaüs. The original, painted in 1560, had been changed more than once over the past 450 years; but there had been engravings made over the course of history, as well. Each restoration made changes that compounded prior mistakes. For example, a restoration in the 1950s deemed that the neckline on the cloak worn by the Pilgrim Luke was an overpaint from the 19th century, and removed it, notwithstanding an 18th century engraving showing that very neckline. These errors and others were compounded again in the Louvre’s more recent 2003-2004 restoration. The piece today makes a good example for the study of art restoration and perhaps, what not to do.

Kasia Pisarek, an independent art historian and research specialist on attribution in London, discussed modern attribution, specifically, the case of La Bella Principessa, a chalk and ink drawing on vellum depicting the profile of a girl appearing to be 15th century. It was recently attributed as a lost drawing by Leonardo da Vinci, but Pisarek proposed several arguments against such a finding. For example, she questioned the story that the vellum came from the Sforziad manuscript in Warsaw, noting that, among other problems, the hole punches that would have held the vellum sheet in place do not match the supposed original source of the drawing, the Sforza family album, which has five holes. Additionally, she discussed how the style and technique of the drawing are very different from Leonardo’s, but that several of his works and a sculptured bust by Cristoforo Romano might have been the sources for the drawing. The controversy will continue—indeed, convicted art forger Shaun Greenhalgh has recently claimed that he forged this “Leonardo” modeled after a girl he knew in 1975.

The first part of the conference was concluded with a brief discussion and a Q&A moderated by one of the conference organizers, Irina Tarsis, of Center for Art Law. A heated discussion ensued surrounding La Bella Principessa’s attribution that could only be categorized as a battle of experts.

IMG_20151201_145913

Part II: Righting the Record – Diverse Experts as Authority

Tatiana Flessas, professor of cultural heritage law at the London School of Economics and one of the conference organizers, introduced the early afternoon speakers, starting with Brian Allen, Chairman of the London Old Master dealers Hazlitt Ltd. Allen discussed what he termed ‘the new art history’—a change in the teaching of connoisseurship, especially in the UK, since the 1980s. He has noticed that universities are focusing on the social history of art, and not training art history students to differentiate artists by their stylistic traits. The effect is that fewer art historians will be able or willing to make attributions, and forgeries can be missed.

Peter Cannon-Brookes, former museum curator with strong interests in conservation and security, presented his essay, “Reconciling Connoisseurship with Different Means of Production of Works of Art.”  He follows Brian Allen’s discussion of the change in connoisseurship and how well modern art historians and connoisseurs really understand art from long ago. He questioned whether the more modern analysis of art—post-war era art to the present—could apply to art created in the past, and the processes used throughout the ages.   

Continuing with the theme of the changing nature of connoisseurship, Charles Hope, former Director of the Warburg Institute, discussed how modern connoisseurs have been unable or unwilling to support their basis for attributions. Often, two types of connoisseurship are at odds with one another: that based on expertise acquired over a long time and that based on using historical evidence and reason. In more distressing terms, Hope highlighted the fact that decisions about attribution are not based on the actual evidence to support the attribution, but left to a decision by vote.

Martin Eidelberg, Professor Emeritus of art history at Rutgers University, next discussed how science alone will not solve authentication issues, that there needs to be a collaboration among different disciplines in addition to extensive time for study. While creating a catalogue raisonné of the paintings of Watteau, he discovered how the provenance and scientific analysis of the paintings were not always a reliable means to determine accurate authorship and could lead to various misattributions.

Robin Simon, Editor of The British Art Journal and Honorary Professor of English, UCL, explained his discovery of multiple fake paintings, which were hanging in the MCC (Marylebone Cricket Club). Simon discovered that a single artist, between 1918 and 1948, painted over fifty paintings depicting cricket matches that purportedly dated from the 16th-20th centuries. After outing the pictures, they were removed from the MCC and quietly given to dealers, although a few fakes still remain in the MCC. Interestingly, Simon learned that the fake paintings were later sold to a wealthy collector who believed them to be authentic. So, the fakes have worked in two swindles.

A guest lecturer at the LSE and Director of the Art Law Foundation, Anne Laure Bandle, discussed her PhD paper on the sale of sleepers at auction and the liability of the auction house in such dealings. She focused on the notable Thwaytes suit against Sotheby’s for negligent advice regarding the value of The Cardsharps—allegedly missing the current expert attribution to Caravaggio. The High Court ruled in favor of Sotheby’s, finding that it had met its due diligence by using highly qualified experts who reasonably concluded that the quality was not sufficient to indicate a Caravaggio, rather than just a ‘follower.’

The next speaker, Elizabeth Simpson, Professor at the Bard Graduate Center in New York, departed from the field of fine arts to discuss the use of connoisseurship in the study of ancient art. Specifically, she explained how the ‘eye’ of the connoisseur has been used to identify the artists of ancient Greek artifacts. For example, by studying the stylistic traits of ancient Greek vases, scholars have been able to determine that two separate artists created works on two sides of the same vases – the Lysippides Painter (black-figure technique) and the Andokides Painter (red-figure). Connoisseurship also reunited disconnected ivory pieces stored in the Metropolitan Museum of Art into the ancient chair or throne from which they came. The ivory pieces had been excavated without any record of the source or context of the figures. An investigation of the pieces and comparison to similar ivories with known provenance revealed how they fit together and their source (Anatolia). 

Part III: Wishful Thinking, Scientific Evidence and Legal Precedent

During the final portion of the program, participants discussed the implications of expert connoisseurs and science in the courtroom.

Irina Tarsis, an art historian, New York attorney, Founder and Director of Center for Art Law, and one of the program organizers, contextualized the litigation involving the renown Knoedler Gallery. Although of impeccable reputation, the Knoedler closed after more than 160 years in business in the face of at least ten lawsuits against the Gallery for selling forgeries. The Gallery sold over fifty paintings, many of which were thought to be by well-known abstract expressionists. They had been consigned by Glafira Rosales, who has now admitted to the forgeries. Thus, the question is, what was the duty of the Gallery to ensure appropriate authentication?  Interestingly, Tarsis reported that none of the museum purchasers have brought suit yet. Several of the private collectors who have brought suit have settled. Thus, the issue of a gallery’s due diligence regarding authentication and attribution in these matters has not been decided by the courts. The question also remains whether there is insurance coverage for all of the remaining claims and potential claims. The usual insurance policy may cover theft or damage to works of art, but not necessarily for loss due to misattribution. Further, the Knoedler may have a policy covering errors and omissions by its staff, but unlikely covering acts of fraud. The message is clear that collectors and dealers cannot rely on the representations of even a highly reputable gallery alone, without performing their own due diligence into authentication to protect themselves. Between December 1st and December 10th, one of the two Knoedler cases slated to go to trial in the January 2016 was settled.

Nicholas Eastaugh, Founder/Director of Art Analysis and Research Ltd., London, discussed the science of analyzing fine arts – the term he uses is ‘technical art history and materials science.’  He performs chemical analyses of the materials used in a painting and searches for anomalies in those paintings. For example, he analyzed Red Picture With Horses, supposedly a 1914 painting by Campendonk, but found titanium white pigment, which was not available at that time, evidencing a forgery by Wolfgang Beltracchi. He also uses high resolution digital imaging, X-rays and ultraviolet fluorescence to see below the painted surface. Earlier sketches and drawings (pentimenti) can show the true artist’s creative process in altering the composition along the way, rather than someone who is simply making a copy.

Megan E. Noh, Associate General Counsel of Bonhams, discussed recent legal trends in authentication disputes. One important change is that artists’ foundations and authentication boards have disbanded or stopped issuing certifications of authenticity. For example, there are no longer boards to authentic works by Basquiat, Warhol or Lichtenstein. This trend is coupled with increased litigation concerning authenticity. Modern litigants rely more on scientific evidence, but it often becomes a battle of the experts. Authenticators, however, are understandably cautious in giving opinions for fear of liability. Noh suggested some possible solutions, such as indemnification agreements or ‘no sue’ agreements to protect authenticators. In New York, there is an attempt to amend the Art and Cultural Affairs Law to protect authenticators by requiring enhanced pleading by plaintiffs filing suit against authenticators, and fee shifting requirements for the prevailing party. Favorable case law may also help reduce liability for authenticators.  Indeed, since the conference, a French court has overturned a 2013 judgment that required art expert Werner Spies to reimburse a collector for the price of a work that turned out to be another Beltracchi forgery, but that Spies authenticated as genuine in a catalogue raisonné. The French court held that an authenticator for a catalogue is not to be held to the higher standard of care as that of an expert consulted in the sale of a work.

Conclusion:

This fascinating conference brought together international experts in various fields of art, art history, science and law. The speakers recognized that controversy abounds as experts continue to reach different opinions regarding attribution of works of art, as well as what efforts to make to properly conserve works of art. As the value of art generally rises, the stakes are high. Disagreements over attribution are increasingly brought into the courts, where the battle of the experts in connoisseurship and science is left to the decision of judges and juries (those furthest from the art world). The eye of an experienced connoisseur, who can distinguish artistic styles, is still desperately needed. The ability to perform such a close inspection and analysis should be supplemented by modern scientific advances, but should never be replaced. Papers from the conference are being prepared for publication in 2016. In the meantime, the take away from the conference is to do due diligence and seek unbiased opinions for authentication or intervention in art handling from a combination of sources, including connoisseurs and scientists.  The conference also raised topics that warrant further exploration, such as ethical guidelines for conservators and how to seek and determine a consensus in opinions.

Suggested Readings:

About the author: Marie H. KramerPennsylvania attorney living in the United Kingdom, studying art and cultural heritage law. She can be reached at marie@kramerlegalbriefs.com 

Art Price Indices: Op Ed

Note from the editors: The subject of art investment and art as an alternative asset is of great interest to the regulators creators and collectors. Center for Art Law has published writing on related subjects before and we are delighted to be bringing an opinion on the subject of art indices from a seasoned art dealer and educator, Carole Pinto.

For additional readings on the subject of art markets, visit http://www.hec.edu/Knowledge/Strategy-Management/Micro-economics/The-Art-Market-Understanding-Changes-in-Prices

* * * 

By Carole Pinto*

The boom in prices of artwork sold at auction since the financial meltdown of 2008 has led to the proliferation of articles written by people who attempt to apply the tools used to interpret the financial markets to the art market.  Much of the data provided by art dealers, advisers, consultants and fund managers, among others, is often used as a means to promote their inventory, while more objective data, such as the Mei Moses Indices and the Art Market Research, do not comprise a broad enough base to reflect significant and data driven movements (meaning in the art market).

A multitude of private equity art funds, including Philip Hoffman Fine Art Fund, The Collectors Fund and the Art Fund Association and a myriad of art advisory firms as well as advisors in the personal banking departments of financial institutions such as Bank of America, Citibank, Deutsche Bank, HSBC, JP Morgan Chase and Goldman Sachs regularly consult with high net worth clients on the advantages of including artwork in the long-term portion of their portfolio, underlining the positive aspects, but often disregarding risk of erosion of asset value over time.  The pleasure of admiring a work of great beauty combined with a potential appreciation in value over a fairly lengthy period of time has to be weighed against the illiquidity of the art market, the possibility of not recuperating the purchase price due to the high cost of getting in and out of the market (commissions of auction houses, for buyers and sellers, on average 25%), the impact that fashion and trends have on the value of a work of art, currency fluctuations and factors such as the geopolitical climate and world economic conditions.

What is the purpose of art market indices? The benefits? What analytical financial data is currently available to the public? One must keep in mind that less than 50% of all artwork sold worldwide is done so publicly, so any market data that is available is drastically skewed because it is based on publicly shared data.  To begin with, it is important to realize that the art market is not one big market, but a series of smaller markets representing over $66 billion in recorded sales annually, according to the most recent Bloomberg Business Report.  It is the largest unregulated market in the world. Contrary to the heavy regulation and transparency of the financial markets, the art market has almost no regulatory oversight. Art assets acquired by funds are not subject to the same level of investor protection measures as securities and other financial instruments. Aside from anti-fraud provisions, auction regulations, cultural property laws, and general consumer protection and contract law, there is little regulation and the art market can be used for money laundering and tax avoidance purposes.

The difficulty of regulating the market lies not only in the resistance of dealers to imposed rules, but also in the fact that works of art are not fungible, and that their value is impossible to calculate against any independent measure at any given point in time.  Two works by the same artist, executed in the same year, with the same subject matter, with comparable dimensions, in the same condition can command vastly different prices due to the quality of the work which unfortunately is not quantifiable.  

There are also major differences between collecting and investing in art one is a passion and the other profit.  Typically, investors in the stock market are advised to diversify their portfolio in order to mitigate risk, since some stocks prices rise while others tend to underperform.  Even though many art collectors have eclectic tastes, their approach is not to buy a basket of artwork a few Impressionist paintings, some old Masters, Chinese porcelain, etc.–but to concentrate on a few artists or types of art that appeal to them.  

The increase in sheer wealth of the top .01% of the worlds population in India, China, Russia, and North and South America has created a bifurcation in the market, resulting in a widening spread between blue chipartwork by well-known artists and the rest of the market. Many of these active players investin art in the same way they invest in other hard assets such as precious stones and metals, as well as real estate, reducing their exposure to currency and political or economic risk. Exponential growth in the market means a lot more players in the field, with a greater risk for mistakes where provenance, ownership and authenticity are concerned. In addition, there are more middlemen in the market today, leading to a diffusion of responsibility when it comes to authentication of a work of art.

In light of the aforementioned caveats, there are a number of specific factors that have to be taken into careful consideration when contemplating art as an investment vehicle:

Artwork traditionally has to be held for a minimum of 10 to 15 years before realizing potential profits. The notion of flipping art for a quick profit is highly risky and is reserved for a select group of savvy dealers. Additional costs associated with buying art include storage, transportation and insurance, appraisal for tax purposes, and buyer and seller premiums.

The lack of liquidity in the art market makes it difficult to unload a work of art for quick cash. One must keep in mind the high cost of entry and exit from the auction market, with a commission of 25% for both buyer and seller, means a work of art has to increase by at least 50% before profits can be realized. Fashion and trends cause tremendous fluctuations in the valuation of works of art. What was considered hotten years ago might have fallen out of fashion, and collectors have to sometimes wait years before the item they want to sell becomes popular once again. It is difficult to assess the value of a work of art at any point in time given the impossibility of obtaining sales data from an important segment of the market, private dealers. This lack of data (price information is available for less than half of all artwork sold) combined with a lack of transparency of the market impacts the validity of any market data analysis.  

There are a few tools that have been made available to the public that try to analyze trends in the art market. Art indices provide a limited tool, and as such it is important to understand what data they include and what they leave out. Art indices are informal records of prices for a select group of works sold at auction, and are not subject to any kind of external scrutiny or regulation.  As an exercise demonstrating this, one only has to subscribe to any number of companies that compile data obtained from the public market, and carefully read the information pertaining to what the numbers actually reflect.  

Art indices also fail to include works that do not sell at auction, which reflects a number of art works that could exceed 50% of those presented at auction. Indices tend to track only the most successful art sales, and do not take into account artwork that is not considered valuable enoughto be resold.

Screen Shot 2015-11-16 at 11.14.59 AMThe Mei Moses Family of Fine Arts Indices, named after two New York University professors, Jianping Mei and Michael Moses, has high name recognition, a long history and a broad base that covers over 30,000 repeat sales. They publish a World All Art Index as well as seven indices representing different categories of collecting. The information is updated annually, though Mei Moses recently indicated that a semi-annual update for the World Wide Art Index will soon be made available according to online information. Quarterly tracking estimates for these indices based on this year’s results are also available. It is noteworthy that the Mei Moses indices do not take into account transaction costs (shipping, insurance, sales tax, buyer/seller premiums), and they only reflect the prices of artwork that has turned around twice in the marketplace.  The source of information is data from Sothebys and Christies, but does not include online sales.  Furthermore, access to the Mei Moses indices is subscription based, costing anywhere from $100 to $250 year.

Another source, Art Market Research, which has existed since 1985, publishes 500 indices covering a variety of categories including vintage wine, Old Masters, jewelry, etc. Some of the data is published in the Wall Street Journal, the Financial Times, BusinessWeek and the Economist, but a complete listing is available to online subscribers. Here too, sale prices that result from online purchases are not made available, meaning the data are less representative of the broader market than prior to online transactions. The existence of online sites limits the information available to collectors in their quest for asset valuations, and combined with a growing number of private sales (both by dealers and auction houses playing the role of dealers) means price comparison is becoming more difficult and less meaningful for understanding market trends.

Artnet indices, again only available to subscribers, cover Contemporary, Impressionist and Modern art. Subscribers can also access artist-specific indices or indices devoted to a subset of an artists work. Citadel Art Price Index includes the results from seven auction houses, but given the multitude of smaller auction houses around the world, the results appear to reflect a very limited dataset.

Sites such as Art Price and Art Net rarely indicate whether a work of art was offered privately before coming to auction and therefore is not fresh to the market, which puts downward pressure on the price. They do not indicate whether or not a dealer is cornering the market, therefore pushing prices up. It is imperative to know key players in the market in order to understand why certain prices are obtained for specific artworks. Price guarantees made by auction houses to sellers are also not indicated, nor are factors such as the geopolitical climate or world economic conditions, all of which have an impact on the art market.

Historically auction houses and other private entities have maintained indices for internal use, which are not available to the public at large. For example, in the mid 1970s, Sothebys auction house attempted to create such an internal index, which was used as a marketing tool to entice clients to purchase art sold there. Then as now, data available was limited to public sales and sales conducted by Sothebys in private transactions.

An integral part of data missing from the indices is how important the aesthetic quality, the intrinsic beauty of a work, is to its valuation. Financial and statistical tools overlook art history–the period in the artists life during which a work was created, the social, political and artistic movements that influenced its creation, or factors impacting the artists personal life–all of which contribute to the artistic creation and works reception in the marketplace. Those choosing a brand name artist without reference to the quality of the work and advice from dealers and experts in the field are exposing themselves to additional risks.   

In the opinion of this author, art should be purchased for the purpose of pleasing the eye, as food for the soul. The great art collector Paul Mellon once described collecting art as an investment in pleasure, a treasure for the eye.” Those who believe that price charts and tabulated data alone can serve as a fireproof guideline for investors could benefit from considering art for both its financial and cultural capital.

About the Author: Carole Pinto is a private dealer and art advisor who teaches a course on the Art Market at Hunter College. She is a regular contributor to the Fine Art Connoisseur magazine. Her work experience includes curatorial work at the Metropolitan Museum of Art and Brooklyn Museums, art investment at Sothebys, Corporate Finance at Salomon Brothers and consulting at the New York State Council on the Arts.

Rockwell-not Case Review: Knispel v. Gallery 63 Antiques

By Chris Michaels*
Screen shot 2015-01-13 at 1.53.22 PM

Yelpers report… Gallery 63 Antiques is no more.

How much would you pay for a piece of classic Americana? According to a complaint filed on 23 December 2014, twenty years earlier, in 1994 Barry and Isabel Knispel were willing to pay $347,437 for an original Norman Rockwell oil painting titled “Mending His Ways.” In early 2013, however, the Knispels learned that the oil they purchased and thought was by Rockwell was, in fact, painted by Harold Anderson, an American painter and illustrator, known for his Christian-themed images.

Pursuant to the complaint, in 1994 the Knispels, New Jersey-based art collectors, were solicited by a New York City art gallery, Gallery 63, to purchase several paintings, one of which was represented to be an original Norman Rockwell painting. The Knispels paid the purchase price of $347,437 and, at the time of sale, Gallery 63 arranged to have the painting appraised by Casper Fine Arts & Appraisals to authenticate and value the painting. Laurence Casper, now deceased, provided a written appraisal of the painting, which confirmed its authenticity as an original Rockwell, although it noted that the painting had not previously been recorded as a Rockwell.

The Knispels, relying on Casper’s appraisal and Gallery 63’s guarantee that the painting was an original Rockwell, completed their purchase. Ever since the purchase, the Knispels have displayed the painting in their home and have maintained insurance coverage for the retail replacement of the painting, which was valued at $1,750,000.

CM jan2015

Harold Anderson’s “Patching Pants” as displayed in a 1940 MobilOil advertisement.

In 2013, insurance company which provided the insurance policy for the Knispels’ painting, required that paintings in the collection be examined to ensure authenticity and value. It was not indicated in the Complaint why an appraisal was needed at this time or why one was not conducted earlier. The New York Fine Art Appraisers examined the painting and determined that it was an illustration by Harold Anderson for a MobilOil advertisement, titled “Patching Pants.” With the new attribution, and to the understandable dismay of the Knispels, the painting was thus valued at only $20,000.

The complaint filed by the Knispels avers that the defendants should have discovered that the painting was not an original Rockwell because the forgery was “open and obvious” and that the defendants breached their obligations under the sale contract by failing to deliver an original Rockwell. The complaint also alleges that the defendants knowingly and deliberately provided the Knispels with false information or were grossly negligent in their appraisal abilities.

In this case, Plaintiffs potentially face a statute of limitations defense based on the fact that approximately 20 years have passed between purchase and identification of the misattribution, as well as claims of forgery. The complaint notes that the forged signature was “open and obvious” to appraisers, so this raises the question of why the forgery went unnoticed for so long. As an aside, this issue should be viewed as a warning to collectors who have not had their collections appraised recently. Not only will retail replacement values likely change over the course of 20 years, getting an independent appraisal of a collection allows sophisticated collectors the chance to pro-actively address any issues that may arise.

Plaintiffs are represented by Donald A. Ottanuick, Esq., of Cole, Schotz, Meisel, Forman & Leonard, P.A. of Hackensack, New Jersey. Defendants may still be looking for council. It appears that they being named as a defendant previously, also in a case dealing with a break of warranty and misattribution.

Sources:

  • Complaint, in Knispel v. Gallery 63 Antiques, et al, Sup. Ct. N.J., (Filed on Dec. 23, 2014).
  • Levin v. Gallery 63 Antiques Corp., No. 04-cv-1504 (KMK) (S.D.N.Y., Sept. 26, 2006).

About the Author: Chris Michaels is a litigation attorney in the Philadelphia office of the Atlanta, GA-based law firm, Cruser & Mitchell, LLP, where he actively pursues his interest in the field of art law. He may be reached at (518) 421-7238, chriswmichaels@gmail.com, or on Twitter @CMichaelsartlaw.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

Ethical Conflict Surrounding Cambodian Cultural Property

This year, we are celebrating the 30th anniversary of the Convention on Cultural Property Implementation Act 97 P.L. 446, 19 USC 2601 et seq. Pursuant to the language of the Act, a Cultural Property Advisory Committee (the “Committee”) undertakes investigations of requests to implement agreements between the United States and other State Parties seeking to protect their cultural property. The Committee prepares reports with respect to each request and submits them to the President of the United States to review and decide whether to enter into a bi-latter agreement to apply import  restrictions on the cultural patrimony or not. The Committee is made up of 11 people: 2 members representing the museum community (M); 3 experts in the fields of archaeology, anthropology  ethnology, etc (A); 3 experts in the international sale of cultural property (T); 3 representatives representing the interest of the general public (P).

Current make up of the panel is as following:

Name Type
Nina M. Archabal M
Barbara Bluhm Kaul P
Lothar von Falkenhausen A
Patty Gerstenblith, Chair P
Rosemary A. Joyce A
Jane A. Levine T
Katharine L. Reid M
Marta A. de la Torre P
Nancy C. Wilkie A
James W. Willis T
Vacant T

Apparently Cambodia has asked that Jane A. Levine, head of Worldwide Compliance at Sotheby’s, to recuse herself from its deliberations on import restrictions for Cambodian antiquities because Sotheby’s is currently involved in a high profile litigation over ownership of a Khmer statue from Cambodia. In addition. next week, between February 27 and March 1, 2013, the Cultural Property Advisory Committee will hold meetings at the Department of State to “review the proposal to extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Kingdom of Cambodia Concerning the Imposition of Import Restrictions on Archaeological Material from Cambodia from the Bronze Age Through the Khmer Era (MOU) [Docket No. DOS-2012-0063].”

Details about the story are available from the New York Times article, cited below.

Source: The New York Times; Archaeological Institute of America; Bureau of Educational and Cultural Affairs; GPO.gov

NAZI ART LITIGATION ALERT: SEIZED SCHIELE PAINTING CASE CLEARED FOR…

Nazi Art Litigation Alert: Seized Schiele Painting Case Cleared for

By David Bario
Am Law Litigation Daily
October 08, 2009

One Schiele painting in New York has been off limits to art lovers ever since it was seized by Manhattan’s district attorney in 1997 while on loan from Vienna. The 1912 painting “Portrait of Wally” has remained in U.S. custody, locked in a Queens warehouse, as government lawyers and heirs to a Jewish art dealer battled with Austria’s Leopold Museum over allegations that the work was stolen by the Nazis.


Now, thanks to a ruling by Manhattan federal district court judge Loretta Preska, the long-simmering litigation over “Portrait of Wally” may finally be headed for trial–and the painting may be closer to seeing the light of day. Late last month, Judge Preska denied motions for summary judgment by the Leopold Museum and the Justice Department, finding that the question of whether the Leopold knew the portrait was allegedly stolen when it was brought to the U.S. is a triable issue of fact. Here’s the judge’s 110-page opinion. [Hat tip to Courthouse News.]

The backstory shares elements with other cases involving allegedly looted Nazi art, though the Schiele case has garnered particular attention in part because of the number of reversals involved.

Manhattan assistant U.S. attorney Barbara Ward is leading the government’s case. Bondi’s heirs are represented by Howard Spiegler of Herrick Feinstein. We reached out to the Leopold Museum’s lead lawyer, William Barron of Smith, Gambrell & Russell, to see how he felt about the prospects of a trial. Barron told us that he was still having the judge’s opinion translated into German for the museum foundation’s board and could not comment

FINGERPAINTING DA VINCI — AMAZING!

Da Vinci expert Martin Kemp has renamed the work, "La Bella Principessa." A smudged fingerprint has convinced art experts that a painting thought to have dated back to the early 19th century is the work of revered Italian artist Leonardo da Vinci.

Da Vinci expert Martin Kemp has renamed the work, “La Bella Principessa” after the young lady in the portrait.

Little is known of the painting before it appeared in an illustrated Christie’s catalogue in the late 1990s labeled as “German, 19th Century” under the name of “Young Girl in Profile in Renaissance Dress.”

It sold for $19,000 at the auction to respected New York art dealer Kate Ganz who kept it for 12 years before selling it on for a similar price in 2007. The work is now locked in a Swiss bank vault with an estimated value of more than $160 million.

Peter Silverman had seen the work during the original auction back in the 1990s. “I was actually an under-bidder because I thought it was a wonderful thing but I didn’t have the knowledge at that time to go all the way,” he told CNN.

More than 10 years later, he was walking in New York with a Swiss friend whom he describes as a “major collector of contemporary art.”

“He popped into the Ganz gallery and saw this thing on her desk which was for sale. And he came out and said, ‘Peter I don’t know what I’m looking at here; I’m a contemporary collector. But I certainly would like you to have a look at it because it doesn’t look 19th Century to me.’ So I went and looked at it and I bought it right way for him.”

Silverman then began the long process of proving that every expert and art lover who had seen the painting over the past decade — and earlier — had been wrong to assume that it was the work of anyone other than one of the world’s greatest artists.

    “I kept saying to myself, this is absurd, it can’t be,” Silverman told CNN. “A da Vinci coming out of the woodwork, just like that, nobody recognized it, fully illustrated, seen by the whole world at Christies, in the hands of one of the top dealers in the world. I was puzzled, sort of stymied.”

    He started researching followers of da Vinci who may have produced the work in their mentor’s style, but kept coming back to the same conclusion: That it was a da Vinci.

    “My one claim to fame in this whole thing is that I saved it from obscurity,” Silverman told CNN.

    In January 2008, Silverman bumped into Nicholas Turner, former Keeper of Prints and Drawings at the British Museum, at an exhibition at the Louvre in Paris.

    He showed Turner an image of the print on a digital camera who agreed it looked like a da Vinci.
    Other experts agreed but it was evidence from the Paris-based firm Lumière Technology that Silverman says was “the icing on the cake.”

    Last June, using a “multispectral” digital technology it pioneered, the firm took images of the layers of pigments used to create the work.

    Within the pigment, they found a partial hand print and a finger print which matched others found on two known works of da Vinci.

    “To capture it took less than two hours, after that we had to study more than 20 gigabytes of data,” Jean Penicaut, CEO of Lumière Technology told CNN.

    Da Vinci scholar Martin Kemp, Emeritus Professor of the History of Art at Oxford University, was called to lend his expertise and also concluded it was a da Vinci.

    He has just finished writing a 200-page book on the work which is expected to be published later this year.
    Professor Kemp told the Antiques Trade Gazette that his first reaction to the find was that “it all sounded too good to be true — after 40 years in the Leonardo business, I thought I’d seen it all!”

    Kemp told the gazette that the portrait must date from around 1496. He believes it is of Bianca Sforza, daughter of Ludovico Sforza, Duke of Milan and his mistress Bernardina de Corradis. He has renamed her portrait, “La Bella Principessa.”

    In addition to the left-handed print, Kemp used extensive research to conclude that the work, da Vinci’s only on vellum (mammal skin), was created as a cover of a book of poetry in honor of the sitter.

    “All the information that Martin Kemp has discovered about it; the lefthandedness, the quality of the work, the fact that it’s on vellum and was meant for a book. There are many different aspect which together make it a Leonardo,” Silverman said.

    But he added, “if it hadn’t been for all these technological advances and these great people working with me on this it still would be in limbo.”

    The portrait is due to on display in Sweden next March at a show called “And There Was Light: The Masters of the Renaissance Seen in a New Light” to be held in Gothenburg.