Earlier this year, there was a piece in The New Yorker about a scandal brewing in the art world.
Not that I know much about the art world, but I know enough to know that the terms “scandal brewing” and “art world” are regularly combined in the same sentence. Many of the scandals are around forgeries, in which a work of dubious provenance is vetted by one expert or another, only to be found out years later by one expert or another that the work is an expertly rendered dud. (A couple of years ago, I read a novel called The Art Forger. It wasn’t all that great from a literary perspective, but it was a good read. And it included a lot of information on the lengths to which forgers go to make a convincing replica – down to research on the types of pigments and canvases that were available at the time the real artist was working. It’s a tough job and, while nobody has to do it, it does require a lot more than replicating the image.)
Anyway, the scandal The New Yorker article got into involved a Russian oligarch and a Swiss middleman, with a backdrop of Monaco and Geneva. Although there weren’t Russian oligarchs in the 1960’s and 1970’s, this one has all the makings of one of those caper/heist films like Thomas Crown Affair or To Catch a Thief.
The oligarch is Dmitry Rybolovlev, who forged his oligarch-ery on a mess of potash; the middleman is Yves Bouvier, who owns a high-end warehousing and transfer facility for $$$ works of art. At some point, he branched out into becoming a go between between the “got art” brigade, and the “need art” folks. Like any good scalper, he marked things up.
Problem was the mark up.
For Modigliani’s “Reclining Nude With Blue Cushion”, Rybolovlev paid $118M. (Let’s not even think about what Modigliani made when he sold this work in Paris in 1917. Maybe 10 francs?) Soon after the purchase – the owner he bought it from was famed hedgie Stephen Cohen – Rybolovlev found out that Cohen had sold the piece for $93.5.
Then there was the Da Vinci, “Salvator Mundi.”
Rybolovlev paid $127.5M. The prior owner got $50M. That’s more than 25% on the Modigliani, and more than 150% on the Leonardo. Which would be okay if these finder’s fees had been properly disclosed. Apparently not, or so it has been claimed.
Rybolovlev, who reckons that he has spent about $2B on 40 works purchased through Bouvier over the years, is now going after him with a vengeance, claiming that he’d been swindled. And now the Feds are getting in on the act.
Justice Department prosecutors are now examining various art deals Bouvier struck on behalf of clients, including transactions involving not only the Modigliani but also works by Klimt and Rothko, focusing on the extent to which he may have misrepresented to clients how much he’d marked up prices, people familiar with the matter say. Of those works, the Leonardo is perhaps the most famous. If the investigation advances, Bouvier could face fraud charges in the U.S. (Source: Bloomberg)
Bouvier’s mounting a caveat emptor defense, maintaining that he was just charging what the market could bear. Which, given that he got what he asked for, seems to be the fact of the matter.
But, of course, this will only work if it can be proven that Bouvier hadn’t given his clients documentation with fake information on the price he’d paid for the work, and minimizing his skim.
The art world is not known for its transparency. When works are sold at an auction, buyers know what they’re up against. But in these one-on-ones, well…
If it turns out that Rybolovlev didn’t get things in writing, he may be out of luck – and Bouvier in luck. C.f., caveat emptor.
However that plays out, I’m guessing that Rybolovlev didn’t amass his potash fortune by being a nice guy. And I suspect he’s not thrilled to have been played the chump by Bouvier.
I hope Bouvier socked some serious coin. I suspect that, even if he’s found to be (technically) innocent, I’m guessing his art world middle man days are over.