Art Institute alleges fraud Sues trading firm over investments
By Thomas A. Corfman, Tribune staff reporter. Tribune art critic Alan G. Artner contributed to this report
December 11, 2001
The Art Institute of Chicago is accusing a Dallas-based trading firm of defrauding it of millions of dollars invested in hedge funds that promised protection from any plunge in financial markets. In a lawsuit filed in Dallas on Monday, the venerable Chicago institution also disclosed that agents of the Federal Bureau of Investigation had visited the Art Institute about a month ago seeking records and other information about its investments with the trading firm. As much as $43 million in museum endowment funds placed with the firm appear to be at risk, the Art Institute said. One fund containing $23 million from the museum is said to have lost as much as 90 percent of its value, according to the complaint. Moreover, according to the museum's lawsuit, executives with the firm, Integral Investment Management LP, have refused to answer questions about the status of the funds. Those same executives also deceived Art Institute officials about the safety of the fund's trading strategies and locked up most of the money in risky investments such as "delinquent consumer debt," according to the lawsuit. "The primary reason we took legal action is to get more information on how our funds have been invested as well as safeguard any remaining funds that may be held on our behalf by Integral," said Edward Horner Jr., executive vice president of development/public relations and a member of the Art Institute's board.
Executives at Integral Investment Management couldn't be reached for comment.
The losses come as a shock to the museum's board, which includes some of the best known business people in Chicago. The museum board's chairman is John Bryan, former chairman of Sara Lee Corp. Thomas J. Pritzker, chairman of Hyatt Hotels Corp., is the museum's vice chairman, and David J. Vitale, president and chief executive of the Board of Trade, is board treasurer. The museum's investment with Integral represents more than 6 percent of its massive, $667 million portfolio, a museum official said. The investments were made in so-called hedge funds, controversial investment vehicles that promise substantial profits but can sometimes result in unexpectedly large losses. Hedge funds have helped fuel a huge, 46 percent growth in the museum's investment portfolio since 1997, according to Art Institute financial statements. Hedge funds now account for 59 percent of the museum's total portfolio, far surpassing more traditional--but still risky--investments such as stocks and bonds. For reasons unrelated to the case, the Art Institute's investment portfolio lost 5 percent of its value during the fiscal year ending June 30, the museum's financial statements show. Museum officials said they do not expect any dramatic hedge fund losses other than the Integral investments chronicled in the lawsuit. "The Art Institute is in sound financial condition, and the vast majority of our investments are safely and properly invested," Horner said, adding that the board has started a comprehensive review of the museum's finances. The museum began investing with Integral about a year ago, after executives with the investment firm told museum officials that the museum "could not lose any of their investments, even in a declining market, unless particular stocks ... fell in value by more than 30 percent," the complaint charges. After the Sept. 11 terrorist attacks, Integral executives repeatedly told the museum's investment adviser, Atlanta-based Kennedy Capital Advisors, that the funds in which the museum invested had not sustained significant losses. But on Oct. 23, the firm sent a letter to investors reporting the 90 percent loss in value in one fund.
About a month ago, while museum officials were pressing Integral for information, FBI agents contacted the museum about the investment, adding to the "Art Institute's growing concern," the complaint says. http://www.chicagotribune.com/
Alfred Taubman resigns from his real estate business
BLOOMFIELD HILLS, Mich., Dec 11 (Reuters) - Real estate investment trust Taubman Centers Inc. said on Tuesday its founder and chairman, A. Alfred Taubman, has resigned, less than a week after he was convicted in an art auction price-fixing scheme. The company, which owns and develops shopping centers throughout the United States, said Taubman's son, Robert, has been appointed chairman. Robert Taubman, 47, is already Taubman Centers' president and chief executive. After a dramatic and well publicized court case, Alfred Taubman on Wednesday was convicted of scheming to fix auction commissions from his perch as chairman of Sotheby's Holdings Inc. ``It is of course difficult for me to step away from the leadership of the company I founded,'' he said in a prepared statement. ``But I believe this is the right thing to do at this time.'' Taubman, 76, is also relinquishing his position as a board member, and Taubman Centers said it does not intend to fill his vacated seat.
Cyprus is determined to pursue the return of every illegally removed object of its cultural heritage
"The issue of the return or restitution of cultural property to the countries of origin constitutes an area in which international relations are put to a test, a noble test, to ensure that cooperation among state and non-state actors can positively affect the lofty goal of protecting the cultural heritage of mankind", the Permanent Representative of Cyprus to the United Nations Ambassador Sotos Zackheos said in his speech before the 56th Session of the United Nations General Assembly, on 10 December in New York. Ambassador Zackheos referred to Cyprus's 9000 year-old civilization and its rich cultural heritage, which provides a unique insight into many civilizations that existed on the island during its long and eventful history and pointed out that many Cyprus artefacts can be viewed in museums throughout the world, while many more have become objects of illicit trafficking, especially those removed illegally from the territory of the island under Turkish occupation since 1974.
"The plundering of the cultural heritage of Cyprus in this area has been so widespread that it led to a decision by the United States, which we warmly welcome, to impose in April 1999, an emergency import restriction on Byzantine ecclesiastical and ritual ethnological material from Cyprus, unless such material is accompanied by an export permit issued by the Government of Cyprus", he said.
"Our determination to investigate the fate and pursue the return of every illegally removed object of our cultural heritage to their rightful owners is unshakable. We look to the international community to extend its solidarity and support in our effort to protect an invaluable part of the cultural heritage of humanity," he added.
Ambassador Zackheos welcomed the creation of the International Fund for the return of Cultural Property by UNESCO and the adoption of an International code of Ethics for Dealers in Cultural Property. Cyprus, as a state party to the 1954 Hague Convention and a signatory of its second protocol adopted in 1999, "follows with interest the work undertaken to address the illicit sale of cultural objects on the Internet and the need for member states to adopt the appropriate international legislation in the field", he said.
He stressed that the combating of illicit trafficking in cultural property, is a task that requires perseverance and multi-faceted collaborative efforts, noting that one of the major areas in this direction is the promotion of the international documentation for recording data of cultural property and the dissemination of information in order to assist in its recovery.
"Cyprus supports all efforts in this regard including the establishment of the UNESCO online network that will include a regularly updated inventory of stolen cultural artefacts, including those removed illegally, from areas of conflict and occupied territories", he concluded.
From the Republic of Cyprus Press and Information Office (PIO) Server at http://www.pio.gov.cy/
Whitlam calls Elgin a barbarian
BY DALYA ALBERGE, ARTS CORRESPONDENT
GOUGH WHITLAM, the former Australian Prime Minister, dismissed Lord Elgin yesterday as “a worse barbarian than Alaric the Goth” for removing the Marbles from the Parthenon. Speaking at a Unesco conference at University College London, which was looking at the moral arguments for returning works of art to their countries of origin, he accused the British Museum of covering up its mistreatment of the Marbles in the 1930s and called for them to be returned. Greece has been demanding their return since 1829. It has intensified the campaign to have them back in time for the 2004 Olympics in Athens. Mr Whitlam, referred to an international conference held at the museum in 1999 after the historian William St Clair alleged that the Marbles were damaged by overcleaning in the 1930s. “Despite promises to Parliament and Unesco, the museum has not published the papers, perhaps in an attempt to avoid further revelations by William St Clair,” he said. A British Museum spokesman said that the conference had shown that there was no cover-up. The reason that the museum had not published the findings was that some of the speakers, “including some of the Greeks, have yet to submit them: We are all ready”. http://www.thetimes.co.uk/ From: Christopher Seal cseal@jps.net To: Museum Security Network securma@xs4all.nl Subject:
Re: Bronzes at heart of tussle for African art
Dear Ton,
Re: "Bronzes at heart of tussle for African art": I would suggest that the political and economic situation in Nigeria, and, indeed, all of Africa, is currently so fluid that the prospect of sending any of the Benin bronzes there should fill anyone with an interest in museum security with trepidation. All of Africa, Egypt included, is in flux to a degree that the possibility of civil war, riots, looting, and concomitant destruction of important art objects is distinctly possible.
Nigeria, for example, is a state with a large and expanding Muslim population. While up to now there have been only minimal signs of Muslim extremism as regards works of art, to send the Benin bronzes there would be to expose them to the danger of destruction in the foreseeable by iconoclasts, as happened in Afghanistan. England, in particular, suffered from iconoclast Christians in the 17th century to such an extent that a great majority of the achievements of English medieval art, both great and small, was irrevocably lost. I would hate to see the same happen to the Benin bronzes, which are the heritage of world culture, not just one region's. At the present time it would be best to send perfect casts to Nigeria, awaiting a better and safer time.
Christopher Seal
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LIMA. The most popular museum in Peru, the Gold Museum in Lima, is at the heart of an argument which is stirring archaeologists the world over, but is also stirring the Peruvian government. After countless tests and 20 years of argument, the pre-Columbian gold pieces in the collection have been declared fakes. http://www.theartnewspaper.com/news/article.asp?idart=8392
THREE US MUSEUMS APPOINT CELEBRITY ARCHITECTS
LONDON. The problem: a museum with a fine collection, an international reputation and a building that has been extended in stops and in all directions. The answer: commission an international architect to rejigg the building and integrate the exhibition space in a signature style. Three US institutions aim to entice more visitors through their doors by doing just that: http://www.theartnewspaper.com/news/article.asp?idart=8391
MASSES OF MINIMALIST JOY FOR BERLIN
BERLIN. The Egidio Marzona collection of minimalist, art Povera and conceptual art, recently acquired by the German government, is on display in Berlin’s Hamburger Bahnhof until 24 February 2002. http://www.theartnewspaper.com/news/article.asp?idart=8370
MUSÉE DE L’HOMME FIGHTS FOR SURVIVAL
PARIS. Staff at the Musée de l’Homme, France’s leading museum of anthropology, ethnology, and prehistory, called a strike last month to protest at the imminent removal of about 300,000 non- European ethnographic objects from its collection. The pieces were to be put in storage before being transferred to the new Musée de quai Branly, scheduled to open in 2004. http://www.theartnewspaper.com/news/article.asp?idart=8353
SOTHEBY’S OWNER CONVICTED OF PRICE FIXING
NEW YORK. Sotheby’s former chairman and majority shareholder, A. Alfred Taubman, has been convicted in a Manhattan court of colluding with Christie’s to fix the commission charged to sellers during the period 1993-1999. He faces up to three years in prison and a heavy fine when he is sentenced on 2 April next year. http://www.theartnewspaper.com/news/article.asp?idart=8352