The Deal of the Art

On May 14, the hammer of a Sotheby's auctioneer dispatched Claude Monet’s Meules for $110.7 million, a world record sale for an Impressionist painting. Two days later Jeff Koon’s Rabbit broke the auction record for a work by a living artist, going for $91 million.

Insane piles of money, mysterious buyers whispering down phone lines – welcome to the glamour of the art auction-house. But could there be any shady dealing behind such anonymous, multi-million dollar deals? You bet there is. There's no reason to infer that Meules and Rabbit were anything but honest and exciting art transactions. But the same traditional auction procedures are also used to launder colossal amounts of dirty money.

The popular media often documents this use of art for evil. Riviera is a current TV series set on that millionaires' playground, the  Cote d’Azur, in southeast France. In it, Julia Stiles plays Georgina Clios, who discovers that her late husband acquired his billions, and his art collection, in an underworld of violence, secrets, and murder.

Prestigious art houses like Sotheby’s and Christies offer tempting anonymity for those trying to game the markets.  Auction houses do not require an art broker to disclose who is bidding on a lot. In a typical shady case, Russian billionaire Dmitry E. Rybolovlev was outed as the buyer of a Toulouse-Lautrec painting of two women on a bed, Au lit: Le Baiser. It went up for sale at Sotheby’s in London in 2015, and Rybolovlev bought it through a Swiss dealer, Yves Bouvier.
Rybolovlev, a mastermind of offshore shell companies, is now in a legal battle with Bouvier over issues that include money from the Sotheby’s sale.

Rybolovlev’s story typifies anonymity, but that of Edemar Cid Ferreira exposes laundering. The US Justice Department used civil forfeiture to seize Jean Michel Basquiat’s 1981 painting Hannibal and later returned it to Brazil. Ferreira is a former Brazilian banker who was convicted of money laundering and other offenses. He had smuggled Hannibal into the US from Brazil, via the Netherlands, with shipping documents that valued the contents at $100.

Quelle horreur!  The painting had been appraised at $8 million. (The abstract expressionist Hannibal features a red dollar sign at the bottom of the canvas – a neat touch of prophetic irony).

At present, US lawmakers are slowly drafting legislation to strip away at least some of the secrecy associated with shady art deals.  One can never know what lies behind any mysterious smile on a multi-million dollar canvas.

Isn't that so, Ms Mona?

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