Safeguarding and tracing artworks an imperfect art
A fast-growing industry of art registries, consultants, financing services, over-the-telephone appraisals, mail-order art catalogs, and other publications wants to tell investors, for a fee, how to safeguard and value their artwork. But the success rate of these art experts is not high. Many go in and out of business at a fast clip; others struggle to expand their small clientele.
Take, for example, art registries, in which a collector has his or her works photographed or indelibly marked.
This is supposed to assist police and insurance companies in recovery efforts. A stolen work could be immediately identified, and an object that is damaged could be compared to the photograph to facilitate a claim.
A variety of entrepreneurs have tried this. Almost every venture has flopped -- and the business has been fraught with con artists.
Some people were actually criminals, such as the man in England who photographed valuable works in people's homes in order to paint copies and later replace the originals with forgeries.
Five years ago, a New Yorker set up a registry in which he served as a middleman between collectors and insurance companies, receiving fees from one to photograph and document artworks and paying somewhat reduced premiums to the other.
The registry, however, reportedly pocketed the money that should have gone to the insurance companies, and the principal fled town when a claim was actually made.
More-honest companies have failed for other reasons. Some collectors, for instance, don't want marks placed on their objects or tags glued to them.
And each registry has its own manner of ``fingerprinting'' works. There is no standard approach in the trade, and the stored information is useless if other people don't know about it or use it themselves.
``Everyone needs to join up in order to make this sort of thing work,'' says Charles Koczka, a senior agent at the United States Customs Service, who specializes in investigating art theft. ``You need to have one central data bank for people to go to.''
Another example of a good idea gone nowhere is a publication that alerts the entire industry to stolen works of art. Ronald Feldman, a dealer in contemporary art, tried in the late 1970s to market a newsletter (International Guide to Missing Art Treasures) for other dealers and collectors so that they would not find themselves purchasing a stolen object.
Law-enforcement officials and insurance companies have long complained that art thefts would be greatly lessened were it not so easy to recirculate questionable works back into the art market. A central source of this information might thus be to everyone's benefit.
Unfortunately, the newsletter lasted only a few issues. Mr. Feldman blames other art dealers for its demise: ``They were generally unhappy with the idea. If you have a publication like this, it becomes harder to launder works that the dealers know are possibly stolen.''
The newsletter also had problems obtaining either photographs or clear descriptions of stolen works.
``I would have also needed a computer -- one as big as a building -- to store all the information,'' he says. ``That's very expensive.''
The Federal Bureau of Investigation does have a computer listing of reported stolen works, but it does not make this information available to the trade.
The Art Dealers Association circulates a listing of recently stolen works to its members. But they are but 90 people -- a small percentage of the total.
The International Foundation for Art Research has a somewhat larger membership, to which it sends out its monthly newsletter of thefts (Stolen Art Alert).
But neither it nor the Art Dealers Association has a computer to quickly store and access information on certain works, artists, or patterns of theft.
Richard Hislop, the London-based publisher of the widely read Art Price Index, which includes worldwide auction prices for works, has a computer, but as yet he has not been able to start a stolen-art periodical.
There are other services available to art collectors and dealers, such as over-the-telephone appraisals of works of art (Art Scan and Telepraisal), art-financing companies (ArtMaster, General Art Equities, International Fine Art Consultants, Rosenthal Art Equities, and Sotheby's), and mail-order art catalogs (American Express, Art Data Bank, Christie's Contemporary Art, Franklin Mint, and hundreds of others).
Each of these services, however, meets certain needs -- but fails in other crucial areas.
For instance, Art Scan and Telepraisal charge $20 and $30, respectively, to provide estimates of a work's value. That is less than a professional appraiser will usually ask.
But the fact that they don't actually see the work to check its authenticity, condition, and medium -- they must rely on the phone caller's knowledge and ability to describe what he has -- lessens the value of the appraisals.
An art credit card, such as the one ArtMaster is attempting to market, would make it easier and faster for middle-class people to purchase art than waiting for a bank to approve a loan.
But few major galleries accept even the more mainstream credit cards.
``I'm not giving up 3 percent of what the work sells for to some [credit card] company,'' says dealer Ivan Karp -- a comment echoed by many others.
Art financing services still make sense, as banks are often reluctant to make loans for such fickle commodities as works of art.
But the high interest rates some companies charge -- from 3 percent above the prime rate to 24 percent (Rosenthal Art Equities also demands a certain percentage of the profit when the object is sold again) -- may make bank requirements look attractive again to collectors and dealers.
Many services seem to exist because someone found a solution and tried to convince others that they had a problem.
That may have worked in other areas of business, but the art world seems to be more stuck in its ways.