Art Association Ethics Codes Don’t Protect Collectors from Misconduct

From all the professional codes of ethics that exist in the numerous associations of people involved in the arts, one might guess that the art sphere is a well-policed realm of integrity. And perhaps it is, the periodic reports of some art advisor or dealer or appraiser admitting to some crime notwithstanding. Last fall, art advisor Lisa Schiff pleaded guilty in federal court for stealing $6.5 million from clients, while Nevada art appraiser Michael Jon Schofield admitted in court that he had inflated the value of several artworks as part of an insurance fraud. Currently, South Florida art dealer Leslie Roberts faces charges of selling fake Andy Warhols (and another was convicted of the same crime two years earlier). And New York dealer Inigo Philbrick sits in prison for stealing $86 million from clients, while the once reigning “Queen of the Art Scene” Mary Boone must occupy herself in some way after closing her two New York art galleries following her conviction for tax evasion back in 2019.

To be fair, Lisa Schiff was never a member of the Association of Professional Art Advisors, nor was Inigo Philbrick part of the Art Dealers Association of America (ADAA). Mary Boone, however, was a member of ADAA, as were Larry Salander (who pleaded guilty in 2010 to stealing more than $100 million from clients and investors) and Knoedler & Co. (which closed in 2012 after a series of lawsuits from clients claimed that forty multi-million-dollar abstract expressionist paintings they had purchased from the gallery were all forgeries). Boone, Salander and Knoedler had all been members in good standing of the dealers association, which promptly threw them out after the two gallery owners pleaded guilty and the Knoedler gallery was shuttered.

So, can we applaud the art advisors association for not including Lisa Schiff and the dealers association for not having Inigo Philbrick as a member, or was it just dumb luck? And did the criminal activities of Boone, Salander and Knoedler really come as a surprise to other members of the ADAA?

Membership in certain associations does confer status—presumably there are requirements for membership, including being experienced, knowledgeable and ethical. Linda Selvin, executive director of the Appraisers Association of America, told Observer that the organization’s lawyers regularly send cease-and-desist letters to appraisers who “misidentify themselves as being members when they are not. It is prestigious to be a member.”

SEE ALSO: What Collectors Really Want from Galleries, According to Artsy’s Casey Lesser

She noted that the association has “an intense application process,” involving 120 hours of online coursework and reviews of sample appraisals, as well as professional references and a paper trail that shows one has worked in the field for at least five years.

The association does have a code of ethics and an ethics committee, which only meets when a complaint has been lodged against a member, usually by a dissatisfied client. (The group takes action when the complaint comes to the association in writing.) On occasion, the committee sides with its own member, finding that the appraiser did an adequate job, but the client was just unhappy with the stated valuation. Other times, the member will be directed to retake one or more of the online courses—“we prefer to help our members who are trying to do a good job,” Selvin said, although one member who was convicted of felony charges “left on his own.”

Many art galleries in New York and elsewhere place an emblem at the front desk of their shops, announcing that they are members of an association, there to assure would-be clients that the dealer here is a straight-shooter vetted in some way by said association. Making that last quality clear, the Art Dealers Association of America has a lengthy code of ethical conduct on its website: Dealers should be certain that what they are selling is authentic and hasn’t been stolen, that they are aware of any defects in the artwork, informing clients of what they know on a written sales receipt. Ethical treatment of artists and consignors is also stipulated.

Meanwhile, the Association of International Photography Art Dealers’ website states that “AIPAD Members have agreed to a Code of Ethics: Members agree to conduct dealings with the public, museums, artists and other dealers with honesty and integrity.” Members of the Fort Worth Art Dealers Association, it is claimed on its website, “are pledged to the maintenance of a high standard of ethical conduct and professional integrity,” while the San Francisco Art Dealers Association “seeks to promote the highest standards of connoisseurship, scholarship and ethical practice within the gallery community.” The Belgian-based international art and antiques dealer association Confédération Internationale des Négociants en Œuvres d’Art (CINOA) has its own stated ethical standards calling for “high levels of ethical behaviour.” The Association of Art Museum Directors and the Association of Art Museum Curators both have codes governing the behavior of their members.

But among the numerous art dealer and gallery associations around the country—including those in Bismarck (North Dakota), Boston, Charleston, Denver, Fort Worth, Houston, Portland (Oregon), San Francisco, Santa Fe, Scottsdale and Seattle—written codes of ethical conduct aren’t particularly common. That isn’t a license for bad behavior on the part of the member galleries, just a result of the fact that these associations don’t exist to police their members but to coordinate their marketing efforts. The Scottsdale Gallery Association, in partnership with the City of Scottsdale, for instance, organizes the “Scottsdale Art District Art Walk” each Thursday evening and the special event Gold Palette Art Walks numerous times throughout the tourism season. The Seattle Art Dealers Association was formed 35 years ago to “support the gallery guide that we have been publishing” to let visitors know about where galleries are located and what they are exhibiting, Greg Kucera, a gallery owner in Seattle and a founding member of the association, told Observer. “The publication has become more important than the association itself.”

The Seattle Art Dealers Association does not have a code of ethical conduct, although the organization’s website notes that it “was created in May of 1990 to uphold high ethical standards among its members and to promote cultural and educational activities.” How those standards are upheld is not clear since, as Kucera said, “we don’t have a protocol for dealing with problems.” One area dealer, Kurt Lidtke, who Kucera was quick to acknowledge “was not a member,” was sent to federal prison in 2011 for four years for conspiring with a professional burglar to steal art from his former clients.

When news broke of what Lidtke had been doing, “many of us thought, ‘Oh, that explains a lot.’” Dealers may hear things or suspect things but be reluctant to speak or act openly. “People may be intimidated bringing up problems,” Kucera added.

Having a written or unwritten code of ethical conduct is meaningless if organizations are reluctant to discipline wayward members. For instance, the owner of Harcourts Modern and Contemporary Art Gallery in San Francisco declared bankruptcy and fled the country as a result of improper business practices, yet “none of us had any inkling of the problems,” John Pence, then president of the San Francisco Art Dealers Association, told Observer. “We don’t know the inner workings of each other’s businesses.” Similarly, the Middendorf Gallery in Washington, D.C., resigned its membership in the Washington Art Dealers Association in the midst of civil lawsuits over its financial dealings with collectors and other dealers but was never called to account by the association. “We hadn’t been aware of what was going on before the suits were filed,” Christopher Addison, the association’s past president, said.

As in the case of Lawrence Salander and Knoedler Gallery, good people can go bad, requiring even long-time clients of a gallery to keep tabs on the dealers with whom they have relationships. Kim Maier, executive director of the Association of Professional Art Advisors, which published its code of ethical conduct on its website, told Observer that the code “serves members and their clients by establishing clear professional standards that promote transparency and best practices in art advising. Upon invitation by APAA’s board of directors and acceptance into the organization, all members agree to the code of ethics, reaffirming their commitment annually when their membership is renewed.”

That is perhaps more of an honor code than one the association can actively enforce, but Maier added that “in the extremely rare cases when we have become aware that a member’s activities do not align with our standards, we have asked that person to resign.”

Erika Bochereau, secretary general of CINOA, told Observer that “concerns regarding potential ethical breaches can arise through a variety of channels, such as formal complaints from clients, media reports, legal actions or discreet communications from professionals within the trade,” and disciplinary actions have resulted. “Outcomes have ranged from formal warnings and mandated corrective measures to, in more serious cases, suspension or expulsion from the member organization.” In many instances, the violations were not so much of willful wrongdoing as just poor business practices, with the organization mandating “corrective measures,” such as “repairing damaged goods, providing additional documentation or research to clarify an item’s provenance or authenticity, issuing a refund, or improving transparency in business practices.”

What this boils down to is that clients of art galleries and art advisors have to look out for themselves, known in legal parlance as doing one’s due diligence. Henry and Anne Marie Frigon of Scottsdale, Arizona, began a positive relationship with Richard H. Love, owner of R.H. Love Galleries in Chicago, starting in the early 1990s, learning about art from him and buying eleven works of American Impressionist paintings from his gallery. Between 1997 and 2002, the Frigons decided to sell these works, consigning them periodically to R.H. Love Galleries. The gallery sold them for less than the agreed-upon prices, and the dealer kept the difference between the actual sales price and the amounts told to the Frigons. In a lawsuit by the Frigons, an Illinois district court judge found in favor of the collectors, concluding that “no reasonable person could foresee the Gallery converting the paintings for its own profit.” Lucky for them, though it strains credulity—during the period when the Frigons were selling their paintings through Love, the gallery was being sued by other people for that very grift.

What’s new in collecting