James writes:

On Wednesday, The Wall Street Journal published my story about a new lawsuit brought against Dedalus, the foundation dedicated to the Abstract-Expressionist painter Robert Motherwell. The piece also related my concern over the unchecked power of many artist foundations.

At the conclusion of the story, I wrote:

Artist foundations have come to serve as the art market's rating agencies, with catalogues raisonnés providing triple-A stamps of approval. As such, these foundations regularly make determinations that can have a significant monetary impact on the value of art, as the Killala lawsuit maintains. At the same time, because these same foundations derive income from the sale of work in their possession by the same artist, there is the potential for conflict of interest, in fact or appearance, in their evaluations of works submitted for authentication.

The American Association of Museums (AAM) and the Association of Art Museum Directors (AAMD) both have best-practice guidelines and enforceable standards of conduct for museums. Not so artist foundations. Despite their considerable influence, artist foundations follow no industry standards, are allowed to operate in complete secrecy, and are accountable to no outside individual or entity beyond the attorney general and the Internal Revenue Service, with only the courts offering glimpses of their operations. Surely it is time that changed.

So far I have seen many more private responses to the story than public comment. This is perhaps an indication of the reach these foundations enjoy in the world of art and the fear many have of upsetting them. Upon publication an employee at a major auction house wrote me a note that sums up much of what I've heard from others:

In so many ways I've always thought of the art world as the "last frontier"...we've certainly evolved quite a bit from the days when deals were conducted with a wink and a handshake, but we still maintain a comfortable distance from the Sarbanes-Oxley reality of most transaction-based cultures. So there's a part of me that agrees with you and supports your demand for accountability in areas of the art world which wield considerable and unchecked power, but there's also a part of me which is already nostalgic for the "Wild West" aspects of our world which have yet to be over-regulated by lawyers.

All of that said, you've raised an important point and I agree with the message. I hope the article is well-received.

Killala v Dedalus is not the first such claim against an artist foundation. In its latest issue, ArtNews magazine features an extensive article about Simon-Whelan v. The Andy Warhol Found. for the Visual Arts. called "The Trouble with Warhol" by Eileen Kinsella (not available online). Another case to consider is Thome v. The Alexander & Louisa Calder Foundation,

Artist foundations are repeatedly finding themselves in major litigation. I believe that one of the reasons may have to do with their culture of secrecy. Foundations have stated that to open up their decision-making to greater transparency, in art authentication and catalogue-raisonne scholarship, could expose them to lawsuits and provide road maps for forgers. A counterargument could be made that such secrecy has already exposed them to lawsuits, since aggrieved parties now turn to the courts as their only resource to open up artist foundations to greater scrutiny. In addition, by not sharing the details of their decisions with others, artist foundations silence a discussion about connoisseurship that could help the wider public recognize and understand what's real, what's questionable, and what is a fake work of art.

Without transparency, much of my reporting on the Motherwell story had to rely on court documents, which are publicly available, and on public tax filings. A government online database called Pacer, or "public access to court electronic records," contains the full text of Killala's complaint against Dedalus and the dealer Julian Weissman, and can be downloaded for about $2.40 (case 1:2011cv00702 document 1). The Foundation Center also provides an essential resource for those who want to view publicly available tax returns--known as the 990 Finder. Dedalus's 2009 return (available here in PDF) was recently posted, revealing, for example, that Jack Flam earned $442,867 in compensation and benefits as the president of Dedalus that year.

The only group that so far has not agreed with my editorial is an organization known as the Catalogue Raisonne Scholars Association, a division of the academic College Art Association (CAA). CRSA President Nancy Mathews wrote this to the Wall Street Journal:

Panero confuses artist-endowed foundations with catalogue raisonné projects, although many artist foundations do carry out such projects. He then questions the authority of catalogue raisonné scholars to form an opinion about what works are "authentic" (created by the artist in question) and what works are not. In doing so, he overlooks the seriousness of such scholarly practice, which is an outgrowth of research that takes place over many years and encompasses every aspect of an artist's work, life, and artistic environment. While Panero claims that art authentication is secretive and unexamined, in fact there is a great deal of discussion and information about the authentication process, including the guidelines developed by the Catalogue Raisonné Scholars Association available at www.catalogueraisonne.org.
Nancy Mowll Mathews
President, CRSA

The CRSA website describes its organization as "founded in 1994 to serve the interests of authors of catalogues raisonnés of works of art." I would describe this as accurate, since her blanket defense does much to "serve the interests of authors of catalogues raisonnés" but little to address the questions raised by my story--the allegations of misjudgment at the Dedalus Foundation in the lawsuits, and the broader issue of transparency at artist foundations. Ms. Mathews says I have confused "artist-endowed foundations with catalogue raisonné projects," but the confusion actually takes place at the foundations themselves. Right now, fiduciary trustees of multi-million dollar enterprises that derive their income in part from the systematic sale of art in their collection are often also in charge of evaluating the collections of others, as the scholars behind the catalogues raisonnés. This evaluation can have a significant impact on the value of art competing with the foundation's own collection in the marketplace. Ms. Mathews's organization gives no advice on the proper relationship of fiduciaries and scholars at artist foundations, an oversight that should cast the value of CRSA and its guidelines in serious doubt.