It seems the economic apocalypse will play out in many and varied ways in the art market.
In America, dealer Lawrence Salander has been arrested and charted with counts relating to larceny, fraud, forgery and perjury. Along the way, he managed to fleece tennis über-brat John McEnroe and film legend, Robert De Niro. The amounts are significant: prosecutors claim that up to $US 88 million has been soaked up by illegal dealings.
And we have our very own drama unfolding here in Australia. Until very recently, no major art auction was complete without Ron Coles and his hefty cheque book in attendance. Now, he has disappeared into thin air, leaving behind a chaotic mess of bad debts, dodgy paintings and accusations of fraud on a grand scale.
Through his prosaically named Sydney-based business, ‘Ronald Coles Investment Gallery’, Coles recruited many clients who had little or no experience in the art market. They gave Coles cash on the understanding that he would acquire investment art on their behalf, and store it for them. It seems that investors believed that Coles was holding a collection of art on their collective behalf worth $A 23 million. Local auction house, Bonhams & Goodman estimate that the collection seized in the course of the police investigation is worth somewhere in the vicinity of $A 400,000. Allegations are now leaking out that there are forgeries of work by at least four major Australian artists amongst the works seized by police. Needless to say, investors are not happy. Not happy at all.
If convictions follow from legal action the question must be asked: how did these people get away with so much for so long?
Unfortunate fact of life: the feeding frenzy witnessed in the art market over the last decade was fuelled largely by people whose overriding concern was the investment potential of the art they were acquiring. That, in itself, is not altogether surprising; it’s been shown that, to varying degrees, the great majority of art buyers do consider the investment value of an artwork prior to acquiring it. But what distinguished buyer behaviour this time around is that people were handing over large sums of cash to dealers for artworks that they never intended to take into their possession. They did not spend weeks painstakingly researching and examining an artwork’s various aesthetic and historical qualities, falling in love with it by degrees. No. These artworks were acquired as places to park disposable income or retirement funds, with the expectation that said investment would increase in value over a set period of time.
It seems that for some dealers the temptation to initiate a painting ponzi scheme was too great to resist. Why sell a painting just once? Why not sell it to five people, none of whom ever expects to take it home and hang it above the sofa? As long as the cash keeps flowing via new investors, there’ll always be money in the bank to pay off clients who decide they want to ‘realise’ their investments.
But there’s nothing new under the sun. It all reads like a chapter out of Stan Lauryssens’ recently published autobiography, Dali & I. According to his own account, Lauryssen did much the same thing when dealing in work by Salvador Dali in the 1970s and 80s.
Images: Lawrence Salander: NY Daily News; Ron Coles: Sydney Morning Herald