Auction house follies

David Ebony

The Art of the Steal: Inside the Sotheby's-Christie's Auction House Scandal by Christopher Mason, New York, G.P. Putnam's Sons, 2004; 406 pages, $26.95 hardcover.

I recall sitting with a group of journalists at a Sotheby's post-evening-auction press conference in the late 1990s, squirming in my seat as we were being harangued by the company's then CEO, Diana (Dede) Brooks. Tall, blonde and vivacious, Brooks was trying to put a positive spin on the results of a mediocre sale. "Just because we didn't sell a few lots tonight is no reason to report that the auction was a total failure, as some of you have done in the past," she scolded. I was flabbergasted that Brooks, whose striking countenance exuded the authority of a powerful no-nonsense businesswoman in charge of her domain, would even bother to lecture a bunch of miserable scribes. It was amazing to me that the first woman ever to run an international art auction firm, the world's largest, and one who apparently shouldered great responsibilities, could be so detail-oriented as to fret about a few disparaging press reports. In Christopher Mason's fascinating book The Art of the Steal: Inside the Sotheby's-Christie's Auction House Scandal, one discovers just how "hands on" her micromanagement style was, and how important the press was to her. The book explores the course of her actions and those of some colleagues and competitors, which nearly brought down the world's two biggest auction houses in 2000.

At the core of Mason's well-researched report is a headline-grabbing tale of price-fixing. The antitrust division of the U.S. Justice Department found that secret meetings held between the top executives of Sotheby's and Christie's were intended to eliminate competition and increase profits by agreeing to raise buyers' commissions and establish nonnegotiable terms for sellers wishing to bring items to auction.

The main characters involved in this complicated scheme are named and identified by Mason in a "Dramatis Personae" preface. Aside from Brooks, the primary co-conspirators were Sotheby's former chairman and principal stockholder, A. Alfred Taubman (his mysterious first initial, we learn, stands for Adolph), Christie's former chairman, Sir Anthony Tennant, and its former CEO, Christopher Davidge.

For the most part, Mason paints a rather sympathetic portrait of Taubman, a self-made mega-millionaire from Detroit, who garnered his fortune by developing shopping malls. The author emphasizes Taubman's philanthropic activities as well as the loyalty and respect that he consistently won from employees and friends. Taubman's devotion to his wife, Judy, a former Miss Israel, is also noted, as is his concern for the rest of his family. However, despite Taubman's apparent Midas touch, evidence of his business savvy is all but absent in Mason's account. Instead, we find a somewhat vulgar, vain and doltish character, who is bad with numbers, could not remember the names of the artists whose multimillion-dollar works hung on his walls, and lied about his age among other things.

Brooks, Taubman's onetime protegee, claimed he instructed her to meet with Davidge to fix prices in April 1993. One stunning revelation in the book is that Brooks brazenly began her part of the conspiracy the day after her brother, Andy Dwyer, was forced to resign as head of a large family-run company under allegations of illegal accounting practices. Brooks pleaded guilty to her crimes in the fall of 2000. During the sensational trial the following year, her testimony was instrumental in convicting Taubman. He was fined $7.5 million and jailed for a year and a day. Due to her cooperation, Brooks received a relatively light sentence of six months of home detention, 1,000 hours of community service and a $350,000 fine.

Tennant, a British aristocrat who helped raise the fortunes of the Guinness company before becoming Christie's chairman, was accused by Davidge in court of instigating the price-fixing conspiracy. According to Davidge, Tennant, after at least a dozen meetings with Taubman, instructed him to collude with Brooks. Davidge is portrayed here as another serf-made millionaire, who, like Taubman, was desperately struggling to overcome his working-class roots and find a place in high society.

Anticipating that the conspiracy would eventually come to light, Christie's had decided early on to cooperate with the authorities and provide the antitrust lawyers with evidence of misconduct in exchange for guarantees that the company would be exempt from certain penalties resulting from the case. Nevertheless, the UK-based company sustained serious damage. Since collusion was at the time regarded as a civil rather than a criminal offense in Britain (UK anti-trust statutes have since been changed to conform more closely to those in the U.S.), no one went to jail. But Christie's, like Sotheby's, was forced to pay hundreds of millions of dollars to settle a class-action suit stemming from the case. In the aftermath of the conspiracy, many employees at both houses lost their jobs, and, at Sotheby's, numerous employees' stock-based retirement funds were wiped out as public shares in the company plummeted.

Gathered from the author's 2,400 interviews with more than 300 sources, and from thousands of pages of trial transcripts and press clippings, the information contained in The Art of the Steal is impressive. The book is chock-full of details about the machinations of the high-end auction business, including useful appendices showing the evolution of its pricing structure since 1995.

Mason points out that accusations of collusion between the two companies were nothing new. Christie's and Sotheby's sparked an uproar in 1975 when they announced identical buyer's premiums within days of each other. And in 1981, a UK art dealers' association brought legal action against the auction houses for price-fixing, but the litigation was inconclusive and the firms' penalties were minuscule. From the time the new fixed rates were implemented in 1993 until early 2000, when the crime was uncovered, both auction houses raked in record-breaking profits. Both companies expanded their operations during that period and opened grand new locations in New York. Christie's moved into its spectacular Rockefeller Center space, and Sotheby's built an elegant addition to its York Avenue headquarters.

Among the most interesting parts of the book are Mason's discussions of the period immediately following the revelations of the collusion between the two auction giants. Second-tier auction companies, such as Phillips, suddenly came to prominence; the auction-house dilemma also proved to be a boon to many galleries, which gained numerous customers who felt betrayed by Christie's and Sotheby's. Both houses, however, survived the scandal and eventually resumed their dominance of the field, as evidenced by their healthy earnings this year [see "Front Page," Sept. '04].

While The Art of the Steal is, for the most part, thoroughly engaging and seems historically airtight, the author occasionally treats his material in semi-fictional, cloak-and-dagger fashion. He even succumbs to a kind of made-for-TV-movie-style reconstruction of crucial scenes, complete with awkward-sounding imaginary dialogue that he extrapolated from his sources. For example, re-creating the jurors' private deliberations as they are in the midst of convicting Taubman seems unnecessary if not tacky, and a hypothetical exchange between the ailing 78-year-old Taubman and a fellow prison inmate near the end of the book comes across as a bit preposterous.

"So what are you in for?" the inmate asked.

"Price-fixing," Taubman replied.

"What the hell's that?"

When Sotheby's former chairman explained that he had been convicted of fixing seller's commissions with the chairman of Christie's, the inmate seemed incredulous.

"That's a crime?" he asked.

"Yeah. But I didn't do it," Taubman said.

"That's what everyone says," the inmate told him, laughing.

"Ask anyone here, they'll tell you they didn't do the crime. They're totally innocent. They were framed."

Mason too often lingers on a "lifestyles of the rich and famous" type of expose that begs to be excerpted in Vanity Fair. One particularly annoying example of this is a long-winded description of Davidge's lavish wedding in India to his third wife, Amrita Jhaveri, a onetime Christie's representative in Bombay. The former CEO's extravagances are closely examined earlier in the book, so the wedding scene, complete with details about what the guests wore, adds little to the story and slows the narrative flow. The author need not have worried about the book's appeal to a wide audience. The subject matter itself is rich and captivating. In addition, Mason's delivery, generally that of an eloquent and knowledgeable insider, makes The Art of the Steal an engaging read as well as an invaluable sourcebook on the recent history of the auction world.

COPYRIGHT 2004 Brant Publications, Inc.
COPYRIGHT 2004 Gale Group