Steven Rodgers, a recent graduate of Southern Illinois Law explains the ways in which the tax code subsidizes art museums through fractional giving, from the introduction:
“The Revolution (Mural)” by David Alfaro Siqueiros
Julia L.M. Bogdanovich, a senior editor of thePennsylvania Law Review has authored an interesting comment examining how artists could pay taxes with in-kind payment. She uses a comparative approach highlighting both Mexico and the United Kingdom. From the Introduction:
According to popular accounts, in 1957 David Alfaro Siqueiros marched into Hugo B. Margáin’s office with a radical and risky proposal. There, the famous muralist bluntly told the new Director of Income Tax that the recent income tax reforms were unduly burdening Mexico’s artists because they “did not know about accounting or tax laws” and had no money with which to pay their obligations. “The only thing we have are paintings,” Siqueiros insisted. However, rather than seek a complete tax exemption for artists, he told Margáin that artists could instead pay taxes with their artwork. Because their art was valuable, Mexico could amass an enviable collection. Tasked with ensuring the success of the new tax system,8 perhaps Margáin was inclined to be creative, or perhaps he was an art aficionado. Regardless of his motives, Margáin replied, “It doesn’t seem like a bad idea.” Under Margáin’s leadership, the Mexican Ministry of Finance and Public Credit accepted Siqueiros’ proposal and launched a program called Pago en Especie (Payment in Kind) in November 1957, when it collected its first income tax payment in art.
- Julia LM Bogdanovich, Devising an Artful Tax: An Appraisal of Payment-in-Kind Income Taxes in Mexico and the United Kingdom, 164 U. Pa. L. Rev. 983 (2015).
Many nations assign to artists moral rights over their creations. One of the core moral rights is the right to claim or exclude works of art in your body of work. But not in the United States. NPR reports on the bizarre case involving Peter Doig and the art he’s trying to disclaim.
Professor Ho-Young Song (Hanyang University School of Law, Seoul) has published an article in the recent issue of the Penn St. Journal of Law and International Affairs examining how works of art are restituted after an illegal export. Once considered by some a tenuous way to regulate the illicit trade in art, illegal export has grown as a regulatory check with more and more impact. From the abstract:
Worldwide, many cultural properties have been wrongfully exported to other countries in times of war and colonization. Furthermore, cultural properties are currently constant targets of illegal transaction due to their substantial economic value. Illicit trade in cultural properties is now the third largest black market after drug and firearms. There are several international treaties aimed at combating the illicit export and enabling the restitution of cultural properties. Despite these efforts, more legislative and judicial cooperation between countries will be necessary to truly solve the problem. This article reviews international legal instruments for restitution of illegally exported cultural property, and suggests some new judicial principles that should be applied by domestic courts for supplementing drawbacks of international treaties. The author suggests to adopt “lex originis” rule for choice of governing law instead of traditional “lex rei sitae” rule and to apply to shifting burden of proof to a certain extent to find a solution for disputes over cultural properties.
- Ho-Young Song, International Legal Instruments and New Judicial Principles for Restitution of Illegally Exported Cultural Properties, 4 Penn. St. J. L. & Int’l Affairs 718 (2016).
- Yates Donna, ‘Uigwe « Trafficking Culture’ (14 March 2014) <http://traffickingculture.org/encyclopedia/case-studies/uigwe/> accessed 23 August 2016.
Daniel Grant reports on a recent Visual Artists Rights Act case involving the Burning Man re-purposed bus known as La Contessa.
A recent court decision in Nevada raises this question and, perhaps more fundamentally, the issue of whether or not VARA might need to be rewritten or updated to account for a broader definition of art. On June 8 of this year, a three-member Appeals Court panel affirmed a 2009 lower court ruling that called the demolition of a refashioned school bus—turned into a Spanish pirate ship on wheels and used for events as part of the annual Burning Man late-August to early-September festival in Black Rock Desert, Nevada between 2002 and 2005—not a violation of VARA, because the vehicle in its new form did not constitute fine art but “applied art.”
The 16’ x 60’ pirate ship, called La Contessa, was created by two artists, Simon Cheffins and Gregory Jones, who transformed an out-of-commission school bus into a replica 16th century Spanish galleon that included a hull, decking, masts, and a hand-crafted figurehead. La Contessa added to the sometime circus nature of Burning Man, used for rides, marching band performances, children’s treasure hunts and even two weddings. After the conclusion of the festival, the vehicle was put into storage on nearby land controlled by a woman, Joan Grant, with a lifetime tenancy of the property. However, in 2005, Grant’s home burned down and she abandoned her tenancy, which was then taken over by a limited liability company controlled by a Michael Stewart. “La Contessa” remained on the property and was not reclaimed by Cheffins and Jones the following year, and in late 2006 Stewart dismantled and then burned the wooden structure so that a scrap metal dealer could remove the underlying school bus. In 2009, the artists brought a VARA lawsuit against Stewart, losing in district court and more recently on appeal. “The focus of our inquiry should be on whether the object in question originally was—and continues to be—utilitarian in nature,” the Appeals Court ruled, although noting that the ship has “some artistic or aesthetic merit.”
In a concurring opinion, one of the three judges, Margaret McKeown, expressed concern that the ruling being issued was not workable and required “a more nuanced definition of ‘applied art’ that balances between the risk of unduly restricting VARA’s reach and the risks of turning judges into art critics.”
Ann Marie Sullivan a third year law student at John Marshall Law School has written an interesting piece thinking about the intersections of cultural heritage and new media. From the abstract:
The application of new media to cultural heritage is consistent with the policy objectives that the copyright law of the United States stands to promote. However, the practical application of the law currently hinders these objectives, often stifling the creation and dissemination of new media works of cultural heritage. In this context, copyright law presents a problem and not a solution, a barrier and not a protection, dissuasion of creation and not encouragement and incentive. Defining the legal scope and reach of digital property and new media within the realm of art and cultural heritage law is critical for the benefit of creators, consumers, cultures, and society as a whole. Unless a modification is made, or a solution adopted, the problems presented by legal uncertainties and inadequacies will continue to operate in a manner contrary to the main purpose of copyright, “To promote the Progress of Science and useful Arts.”
In case you haven’t seen it yet, 60 minutes examined the rapid fall of the Knoedler Art Gallery in 2011. The piece does a thorough job of giving background on the Knoedler Gallery, the role of the Cataloge Raisonne, and scientific testing.
I found particularly interesting this exchange between Anderson Cooper, and Domenico de Sole, one of the collectors, and the chairman of Sotheby’s which underscores the role of reputation and trust in the art market:
Anderson Cooper: Do you feel you did enough due diligence as a buyer?
Domenico de Sole: My due diligence was to go to the best, most prominent gallery in the United States dealing with a person with a stellar reputation, and pay a price that was reasonable, it was fair.
Domenico de Sole was the person who bought that $8 million fake Mark Rothko and told us he believes Knoedler Gallery and its President Ann Freedman either knew or should have known that this lucrative collection could not possibly be genuine. Greg Clarick is his attorney.
Greg Clarick: The red flags began with the notion that Glafira Rosales, who was an unknown person to Knoedler, who Knoedler never investigated, came in and she started delivering what turned out to be an endless stream of never-before-seen paintings was enough to raise a huge red flag.
Anderson Cooper: Strangers don’t walk off the street into a gallery saying that they have access to a never-before-seen collection of some of the greatest masterpieces
Greg Clarick: That’s right. Second, the works had no provenance.
Anderson Cooper: No chain, no history?
Greg Clarick: They had no history. They had no documents.
Anderson Cooper: So there was no evidence these paintings had ever been painted by the artists?
Greg Clarick: That’s correct.
Not only that, there were no bills of sale, no insurance records, no shipping documents, and no museum exhibitions for any of the paintings. Greg Clarick told us the gallery had motivation to overlook the paintings’ shortcomings.
Greg Clarick: Over the period of this fraud, Knoedler sold these paintings for about $67 million. Knoedler made over $40 million in profit from selling these paintings. And at the same time, Knoedler made essentially no money at all from selling other paintings.