“Dark Side of the Boom”
by Georgina Adam

by Tom Mullaney

The global art market has registered exponential growth since the turn of the century, both in activity as well as in prices paid at auction. This ever-upward trend is driven not only by the prices but also by contemporary art’s association with fashion, glamour and celebrity culture. Between 2005 and 2015, global art sales doubled to more than $63 billion, dipping slightly to $56.6 billion in 2016.

As May approaches, Sotheby’s and Christie’s are preparing their contemporary auction sales that usually feature several masterworks primed to set record-winning bids. This year, Christie’s is hoping to smash the $484 million record for a single collection (set by the Yves Saint Laurent and Pierre Bergé trove in 2009) when the David Rockefeller collection of 2,000 items goes on the block.

The excitement will roll out in both auction houses’ sales rooms and over the internet. Then, the results will be trumpeted by the mainstream media and the art press worldwide.

Until the halfway mark of the last century, Art was seen as a special part of human creation that existed on a higher plane. The Abstract Expressionists, like de Kooning and Rothko, viewed art as a life-or-death struggle to capture the transcendent. That view has been abandoned in the intervening years.

Art seemingly left that higher plane as works by pop art luminaries such as Robert Rauschenberg and Andy Warhol helped lead to art’s monetization and its current identity as a mere commodity. Art is now less about meaning and more about last month’s auction price.

That auction world is the public side of today’s booming art market. But like any market involving very large sums of money, it has a less attractive, darker side.

The experienced art writer Georgina Adam, who has written for The Art Newspaper and The Financial Times, leads us on a fascinating tour of its lesser-known byways in her new book, “Dark Side of the Boom.” It was published in London last year and is set for a March 15th, 2018 publication in the U.S.

Her book is a breezy yet thorough account of explosive changes in the 21st century art world and the myriad ways less scrupulous characters seek to game the market to their advantage. Those many excesses are the stuff of endless lawsuits that keep lawyers busy billing countless courtroom hours.

(On another connection between lawyers and art, the 2015 Panama Papers exposé revealed the secret workings of Mossack Fonseca, one of the world’s foremost facilitators of offshore tax havens. The papers also contained revelations about a number of shady art deals, formerly shrouded in secrecy).

Such suits take years to wind their way through the courts and end with no real resolution. A frustrating note in reading about all this less-than-legal behavior is the many lawsuits that remained unsettled at the time of publication. Many will reach secret settlements before going to trial, thus keeping the public forever in the dark, which is exactly how jilted and embarrassed gallerists and collectors want it.

“Dark Side” first examines how the foundational forces of supply and demand impact the art market and then dives deeply into a full range of excesses in the wake of explosive growth: price manipulation, forgery, false authentication, investment schemes, speculation and money laundering.

The book opens with a lesser-known corollary of the art boom: the equally explosive growth of art warehouses, also known as “Freeports.” They exist all over the world as specially-designated areas within a country’s borders that serve as tax-free and duty-free zones where art from around the world can be stored, shipped and traded – not to mention kept from the tax authorities’ eyes.

The one Adam selects is located in the tiny duchy of Luxembourg famous, in the wrong sense, for the actions of its main investor, Yves Bouvier, known throughout the world as the “Freeport King.”

Inside these “Über-warehouses for the ultra-rich”, as The Economist called them, are rows upon rows of armored strongboxes stuffed with art and other valuables, legally purchased or possibly looted, whose owners want the holdings safe and secret. Unlike traditional storage facilities, these have seven-ton steel doors, state-of-the-art security and, in the event of a fire, a prevention system that replaces the flammable oxygen with inert gas, thus avoiding the use of damaging water.

Adam points to the need for an ever-greater supply of art to satisfy the growing global demand for it. She visited the massive studio of Chinese artist Zhang Huan in the suburbs of Shanghai. Huan employs 80 assistants but, for work on large-scale projects, the number rises to 200.

Back in the United States, Los Angeles artist Sterling Ruby also works on a grand scale. His studio is in a former truck factory. Ruby is quite prolific with a packed exhibition schedule (18 in 2016 alone) and representation by five galleries worldwide who each want a constant supply of new work.

Much of the demand for newer art is coming from newer collectors, especially in China. These purchasers want to counter the West’s dominance of the market and attest to their rising cultural status.

Museums also are demanding large-scale projects since, Adam writes, public institutions “need to attract the public with a ‘wow’ factor.” That translates into striking works that will attract crowds and are also big enough to fit into their ever-larger buildings.

However, all this growth poses a risk, according to one art dealer, Stéphane Custot. “Over-production is a serious problem... And it has got to change, because it could eventually destroy confidence in the contemporary art market.”

Adam reports that the estate of Andy Warhol transferred over 100,000 works to the Andy Warhol Foundation upon his death. A big 21st century problem exposed by Warhol’s stash is how social media has blurred the notion of authorship. The proliferation of art editions and digitization, allowing for the use and re-use of several artists’ art, has led to cries of appropriation. Richard Prince, Jeff Koons, Luc Tuymans, and other noted artists have been accused of abusing the “fair use” standard.

For example, in 2009, photographer Patrick Cariou brought suit against Prince. He charged that Prince had illegally appropriated Cariou’s photos, published in 2000, to make a series of 30 paintings, Canal Zone, in 2008. Prince’s dealer, Larry Gagosian, sold 8 for $10.5 million, while another 7 were exchanged for other artwork valued between $6 and $8 million. Cariou and Prince settled on confidential terms, leaving unsettled the legal definitions of “fair use” and “transformative.”

The issue of false attribution is another red-flag matter that leads to many suits, usually by buyers incensed at an expert’s negative judgment on their precious painting. Adam quotes a dealer who said, “People really do think that by suing you they are going to make their picture genuine!”

What Adam calls “a tsunami of forgery” has reached flood-stage proportions arising out of the huge sums associated with art activity. That being said, fake art is not just a modern problem. Even Michelangelo is known to have faked a sleeping Cupid, artificially aging it and selling it to Cardinal Raffaele Riario.

A more recent, equally shocking case brought down M Knoedler & Co, a prominent New York gallery that had been in business for 165 years. Knoedler was discovered to be selling counterfeit works by Robert Motherwell, Jackson Pollock and Mark Rothko. What was bizarre was the identity of the forger: an aged Chinese painter living in Queens, New York. The intermediary who sold the forgeries, Glafira Rosales, admitted to selling 60 works to Knoedler for just over $33 million; the gallery resold the works for more than $80 million.

Mark Jones, the former director of the Victoria and Albert Museum offers this kernel of wisdom on forgery: “Each society, each generation, fakes the thing it covets most.”

Adam has written a book filled with finely-researched detail and broad access to leading art figures. She’s not afraid to name names or follow the evidence wherever it leads. Unfortunately, that means going right up to the courtroom doors, whereupon she loses the scent as private negotiations thwart her prying eyes and pen.

I closed the book feeling I had taken a fine post-graduate course on the market and its vices. You will too. Yet, after reading all the episodes of skullduggery, loopholes and lax regulation, you may never be able to look at a painting in the same way again.


“Dark Side of the Boom” is published by Lund Humphries, London, 2017



TOM MULLANEY is the New Art Examiner’s managing editor. His art journey began more than fifty years ago in a college Art History class and as an arts journalist since for publications in Chicago and New York.



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