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September 28, 2000

CONTENTS:




 - COURT PAPERS SHOW TERRA BOARD SPLIT
- SOTHEBY'S LIKELY TO FACE FINE, NO CHARGES
- Brothers who stole stamps sentenced to prison
- New chapter on (Public Library) security

COURT PAPERS SHOW TERRA BOARD SPLIT

By Robert Becker (Chicago Tribune)
A month before the messy battle over the future of the Terra Museum of American Art spilled into a Cook County courtroom, one vision for the institution was being carefully crafted behind the backs of some of its board members, court records allege.
That vision, the records allege, called for shuttering the museum at 664 N. Michigan Ave. and moving its famous collection of paintings and prints to Washington, D.C., along with the Terra Foundation, which owns the museum and another art museum in Giverny, France. The author of the plan, the documents allege, is Paul Hayes Tucker, a board director and president of the foundation.
But according to several Terra Foundation board members--among them Maggie Daley, wife of Chicago Mayor Richard M. Daley, and former Waste Management Inc. chief Dean Buntrock--they were kept in the dark about a proposed move until Tucker introduced it during an Aug. 24 board meeting.
"They were stunned," said one attorney involved in the case. Tucker subsequently elaborated on those ideas in a paper titled "A Vision for the Future," which advocated relocating the foundation to the American Pharmaceutical Building on the Mall in Washington. There, the foundation could house "a host of scholars, curators and other educators who would be Terra Fellows," according to the paper. As for the Terra Museum's $100 million collection of American painting, which includes works by Whistler, Cole and Sargent, it "should be in the same city as the foundation itself," wrote Tucker. "It would be foolish to have it any other way."
Accordingly, Tucker proposed "a strategic partnership with the National Gallery [of Art]" in Washington. Tucker closed his assessment--which is contained in court records--by telling board members, "I look forward to reviewing all of this with you in Giverny."
Board members met Tuesday in Giverny. According to the court papers, the board had been expected then to consider formally a move of the foundation and its Chicago collection until a Cook County judge ordered them to back off at least for a few weeks.
The order came in response to a lawsuit filed by two of the directors. They accuse Judith Terra, widow of museum founder Daniel Terra, Tucker and others of mismanaging millions of dollars of museum assets and plotting to move the facility to Washington.
Circuit Judge Dorothy Kirie Kinnaird ruled Monday that the Terra Foundation board could hold its meeting but could not make a final decision on the proposed move or try to oust any directors. Kinnaird also allowed Illinois Atty. Gen. Jim Ryan's office to join the case.
Ryan's office wants Judith Terra, Tucker and former U.S. Sen. Alan K. Simpson (R-Wyo.) removed as directors of the foundation. It also seeks appointment of a receiver to conduct an accounting of the foundation's assets.
Buntrock and fellow foundation director Ronald Gidwitz, former chief executive of the Helene Curtis beauty products firm, filed suit against Judith Terra, Tucker and others, alleging that their opposition to the move would result in their ouster from the board. The suit says Judith Terra is pushing to move the foundation to Washington, where she resides, to "obtain a prominent place in social circles" there.
Neither Buntrock, Gidwitz , Terra nor Tucker could be reached for comment Tuesday.
Stephen Carlson, who represents the Terra Foundation board, called the lawsuit "frivolous."
"It's a meritless claim," said Carlson. "And ultimately the foundation will prevail."
Minutes of the foundation's August board meeting were filed with the suit and quote Maggie Daley as saying that she did not recall any previous discussions about plans for the foundation or museum to leave Chicago.
But Tucker told the board, according to the minutes, that the Chicago museum "needs a great deal of money to be brought up to par with other museums" and there is a "problem attracting attendance." Tucker concluded that the best way to "maximize" resources was to "align with another institution, close the Chicago museum" and focus on the foundation's property in Giverny.
But Buntrock noted "that we had never discussed this at the board level," the minutes say. But Tucker suggested, according to the minutes, "that we definitely make a decision in September." In the paper he prepared for board members, Tucker advocated Washington as the new site for the foundation, saying the city had "the best resources for the understanding and advancement of American art."
The Pharmaceutical Building, he wrote, "would be an ideal site," with ample space and a location adjacent to the State Department. As to the collection, Tucker said a partnership with the National Gallery would be advantageous because the gallery "is the pre-eminent museum in the city and the most respected in the art world."

SOTHEBY'S LIKELY TO FACE FINE, NO CHARGES

By PAUL THARP
Sotheby's and its former top execs will likely have to cough up as much as another $40 million in government fines to keep people from going to jail in its price-fixing scandal. Sotheby's and government lawyers are close to reaching a deal that would close the book for good on the case, sources said.
"There's still the government claim to contend with, but the company expects to settle this soon," said one source familiar with the case. "It's going to be a fine, but it's not going to be that large, comparatively, because the company has already borne a very large expense - it's already had the $256 million assessment."
The fine could range from $10 million to $40 million, the source said. "The government is very serious about price-fixing matters - it's tantamount to committing murder."
The auction house and its rival, Christie's, are together paying $512 million into a pool to satisfy claims by angry customers and shareholders who've sued over the price-fixing charges.
The pact sent Sotheby's shares soaring 15 percent yesterday, closing at $23.44, up $3.13, but well off their 52-week high of $36.38.
Despite the civil settlement, the Justice Department is still threatening to bring criminal charges against Sotheby's former chairman, Alfred Taubman, 75, and his former president and CEO, Diana "Dede" Brooks. Taubman is paying nearly three-quarters of Sotheby's $256 million share of the claims pool. Brooks isn't paying into the pool, but she could be tapped for criminal fines. Brooks owns about 1.3 million Sotheby's shares, which are valued at about $30 million, based on yesterday's closing price.
Christie's isn't involved in the criminal end of the case because it won immunity back in January when its CEO, Christopher Davidge, blew the whistle on the price-fixing allegations.
Taubman, Sotheby's and Christie's had no comment on the settlements. Taubman has made a fortune on his Sotheby's investment. He bought control of the auction house in London in 1983 for $37 milion, and made more than $100 milion taking it public. He still controls 63 percent of the voting power. Unitl recent weeks, Taubman had resisted a settlement, sources said. One party familar with the matter said:
"Some think he had been using Sotheby's as a shield to protect himself financially."
But another friend in the Detroit area said:
"Basically, it was a really tough year, but he just wants to pay up and move on."
In the Midwest, and particularly Detroit, Taubman is very protective of his reputation as a philanthropist.
"I'd wager the guy has his name on more buildings than Donald Trump," said one friend.
One of the University of Michigan's most generous benefactors, he contributed $30 million to the university's A. Alfred Taubman Health Care Center and Taubman Medical Library. This latest gift to the university is the largest gift he has made to any institution.

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Brothers who stole stamps sentenced to prison

By Torsten Ove, Post-Gazette Staff Writer
John and James Kennedy were stamp collectors, after a fashion. Problem was, they collected other people's stamps.
For 25 years, the brothers gleaned names from coin and stamp publications, including a 1980 American Philatelic Society members list, then ransacked collections
Yesterday in federal court, U.S. District Judge Maurice Cohill Jr. sent them both to prison.
John, 59, of Morgantown, W.Va., got 27 months and was ordered to pay nearly $300,000 in restitution to four insurance companies and four collectors, including a 76-year-old Mt. Lebanon man who lost $150,000 in stamps and other valuables in a 1997 burglary.
James, 60, of Wakeman, Ohio, was sentenced to 21 months in prison and ordered to pay $74,000 in restitution.
The brothers called the homes of collectors repeatedly until they were sure no one was home, then broke in, tore up the premises and made off with stamps, coins and other collectibles.
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New chapter on (Public Library) security

Savannah Morning News
PUBLIC LIBRARY officials who want to make the Bull Street Library a safer place should take this week's recommendations by a panel of three Chatham County police officers to heart.
The officers were asked what could be done to improve security in the wake of last month's after-school altercation between large groups of middle school and high school students on the library's second floor. Librarians had to call Savannah police to quell the disturbance, which eventually spilled outside onto the library's front steps. Two private security employees who were on duty were essentially ineffective.
Unruly or potentially dangerous behavior has no place at any public building. While library administrators understandably want to create a welcome atmosphere and accommodate anyone who enters the building, they can't compromise on safety. To do so simply invites trouble. It will end up driving people away from the library, which no one wants. Three county officers spent a week secretly monitoring the behavior of library patrons and staff to see what security improvements could be made. Their recommendations, which were presented Tuesday to the Chatham-Effingham-Liberty Regional Library Board, are mostly common sense. For example, the officers urged that the library's staff and guards be given two-way radios. The library is a large building that covers several floors. If those responsible for security can't communicate, then it's almost impossible to quickly respond to situations before they spin out of control. Indeed, the officers noticed that when disruptive groups entered the building, it took too long for security officers and staffers to quiet them down. That must change.
The officers also noted that the Bull Street Library has 16 security cameras. That seems ample. However, the monitors for those cameras are located in a normally unoccupied staff room. Worse, none of the activity is videotaped. This expensive equipment is largely being wasted. If the library is going to have security cameras -- and it should -- then someone should be watching them. And if a pair of eyes isn't always available, then a videotaping system is a must.
The officers urged that patrons be required to show photo identification to help identify those who have been kicked out of the library for bad behavior. Such a rule may be difficult to enforce. However, many older students already have photo IDs for their schools. A process that allows the library to screen out habitual troublemakers seems reasonable.
More doable is a recommendation that small children be signed in and out of the children's section by a parent or guardian, who must remain in the building at all times. These days, any adult who leaves a child in a public place without proper monitoring is asking for trouble. Besides, taxpayers don't pay librarians to be baby-sitters.
One of the more revealing recommendations has to do with police protection. Basically, the officers said the library doesn't need it. Instead, private security guards who are properly trained can do the job -- provided some of the other measures are implemented. If library officials hire their own guards, as opposed to asking for help from the Chatham County Police Department, then they must set strict criteria. Bill Johnson, the library's interim director, said the library staff hopes to come up with a plan that maintains safety without making patrons feel unwelcome. He should find these recommendations extremely helpful.