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How the super-rich took over the museum world

The wealthy have always influenced the art scene, but in recent years, they've dominated it and more.

"Untitled" by Keith Haring at the Museum of Modern Art (MoMA). In less than 20 years, MoMA has spent almost a billion dollars reinventing itself. Most of that money has come from the museum's board of trustees, but MoMA in fact gets substantial public support through the tax write-offs its wealthy donors receive as well as its own nonprofit status. The public is in effect subsidising the museum without getting any corresponding say in its governance.

Leon Black, MoMA's chairman, has a net worth estimated at US$7 billion, most of it derived from Apollo Global Management, the private equity company he heads. Of MoMA's 51 trustees who have a vote, at least 45 work in finance, the corporate world, real estate or law, or are the heirs or spouses of the super-rich. MoMA appears to choose its trustees overwhelmingly for their wealth, and the board now reads like a roll call of the 0.01 per cent.

WITH the recent opening of its sleek new quarters, the Museum of Modern Art has solidified its position as one of the world's leading showcases for high culture. Designed by the "starchitect" firm of Diller Scofidio + Renfro, the renovation cost US$450 million; that comes on top of the US$425 million the museum spent on an earlier makeover, in 2004. That redesign came under sharp criticism, and within a decade a new overhaul was deemed necessary. In less than 20 years, MoMA has spent almost a billion dollars reinventing itself.

Most of that money has come from the museum's board of trustees. For the 2004 renovation, 50 trustees donated US$5 million each. For this go-round, board members have again opened their wallets, along with David Geffen, who does not sit on the board but provided a whopping US$100 million. The vast fortunes that make such do-overs possible raise questions about the composition of MoMA's board at a time when such boards in general face growing scrutiny.

Earlier this year, both the Metropolitan and Guggenheim museums announced they would no longer accept donations from those members of the Sackler family linked to OxyContin, the powerful painkiller implicated in the opioid crisis. In July, Warren Kanders resigned as a vice chairman of the Whitney Museum after weeks of protests directed at his ownership of a company that manufactures tear gas canisters that had been used against migrants on the United States-Mexico border. And on Oct 18 - three days before MoMA's reopening - more than 100 activists picketed an exclusive preview party, calling on one of its board members, Laurence Fink, and his company, BlackRock, to divest its holdings in private prison companies.

Individual cases like these reflect a more fundamental reality about museums: their dominance by the super-rich in an age of mounting anger over income inequality.

MoMA is a prime example. Of its 51 trustees who have a vote, at least 45 (by my count) work in finance, the corporate world, real estate or law, or are the heirs or spouses of the super-rich. Only a handful come from outside these gilded ranks, among them the writer and actress Anna Deavere Smith and the Harvard professor of history and race Khalil Gibran Muhammad. As has been widely reported, both MoMA and the Met expect wealthy newcomers to give millions of dollars as the price of membership. (Because donations to museums are for the most part tax-deductible, the giving is leavened with a sizable dose of self-interest.) Art has always depended on wealthy patrons; see the Medicis, Frick and Morgan. In contrast to Europe, where museums receive significant (though now decreasing) state funding, most American museums rely heavily on private donors. And, since the late 1990s, when MoMA's current push to expand began, its trustees appear to have been chosen overwhelmingly for their wealth, and the board now reads like a roll call of the 0.01 per cent.

To take a random sample: MoMA's president, Ronnie Heyman, is the chairwoman of GAF, a roofing manufacturer that her husband, Samuel Heyman, acquired in a hostile takeover. Philip Niarchos is heir to the fortune of the Greek shipping magnate Stavros Niarchos. Jerry Speyer is the chairman and a founding partner of Tishman Speyer, the real estate colossus that owns Rockefeller Center. Marlene Hess is the daughter of Leon Hess, the oil tycoon who owned the New York Jets. John Elkann is heir to Italy's Agnelli family, Joel Ehrenkranz is a senior partner in a wealth management firm and Zhang Xin is a Chinese billionaire businesswoman.

Many of MoMA's trustees are devoted collectors of modern and contemporary art, and the museum has benefited accordingly. One longtime trustee (and former president), Agnes Gund, has funded or donated to the museum more than 800 works. And realistically, without the generosity of its trustees, the Modern might have a hard time keeping its doors open.

Yet its dependence on the kindness of billionaires comes at a price. Today's museum world is steeply hierarchical, mirroring the inequality in society at large. In May, the activist group Art + Museum Transparency, seeking to break "the culture of silence and fear" in the industry, published a spreadsheet featuring salaries anonymously entered by hundreds of museum employees. According to it, MoMA curators seem very well paid; people in more junior positions much less so.

On May 31, 2018, when MoMA hosted its annual Party in the Garden fund-raiser, about 250 unionised museum workers and their supporters gathered outside to protest low wages and minimal overtime pay. All the while the compensation of its director, Glenn Lowry, has steadily climbed and now approaches US$2.3 million (including salary, bonuses and benefits) - one of the largest such packages in the country.

Among the biggest losers in the current system are artists themselves. With art now considered an asset class similar to equities and commodities, collectors are forever on the lookout for rising stars whose work can be bought at bargain prices and then resold for many multiples as their reputation soars. When the market moves on, careers are often shattered (except in the case of a few ever-in-demand stars).

And even those artists who do remain popular usually benefit only from the initial sale of their work; as its value appreciates, the profits go mainly to collectors and auction houses. Museum trustees have ready access to curators and gallery owners who can point out emerging artists whose work they can buy at an early stage and benefit as the demand for it grows. And with so many rich people collecting contemporary art, and the public's interest in such art growing, museums often seek to devote more space to it to keep donors interested and openhanded.

The Metropolitan, for one, has paid dearly for such expansionism. In 2011, the museum, in a push to accommodate more modern and contemporary art, agreed to an eight-year lease on the longtime Madison Avenue home of the Whitney, which the Whitney was abandoning for its new Renzo Piano-designed palace downtown.

The Met had to spend US$13 million to renovate the building and US$18 million a year to run it, contributing to a US$10 million deficit. The museum was forced to shed around 100 employees, cut benefits for curators and conservators, reduce its number of annual shows and suspend a planned US$600 million renovation of its modern and contemporary wing. The Met also decided, for the first time in a half-century, to impose a mandatory admission fee on all out-of-state visitors.

In September 2018, the museum finally managed to rid itself of this millstone by announcing that the Frick Collection would take over the former Whitney building. Another casualty of the mess: Thomas Campbell, the museum's director, who was forced to resign.

Perhaps the most serious concern raised about baronial boards is the possible constraints they place on what museums can exhibit.

With its more than 40,000 square feet in added gallery space, the Modern is seeking to upend hierarchies, remake the canon and break from its longstanding white, male, Eurocentric orientation. On a recent visit to the museum, I saw many dazzling and socially engaged works, such as Jacob Lawrence's epic series on the great African-American migration from South to North, Michael Armitage's paintings of African despair, and Janet Cardiff and George Bures Miller's chilling "The Killing Machine". I did not see much, however, about such urgent matters as income inequality, deindustrialisation or the rise of populism. Why, I wondered, was there not more on the impact of Wall Street on Main Street or the continuing fallout from the 2008 financial crisis - the root of so much unrest in the world today?

A spokeswoman for the museum said that its trustees have no decision-making role in its exhibitions, which are determined solely by the museum's "strong curatorial staff" in regular consultation with artists. Yet a board's influence need not be overt to be profound; curators are no doubt savvy enough to know how far they can go in challenging a system of which their trustees are such pillars. In the end, it's hard to measure the impact of trustees' wealth on a museum's content, and no doubt someone will be able to point to this or that exception, but it's a subject that deserves much more discussion than it has received.

For the superwealthy, membership on museum boards brings many benefits, including an increase in social status, access to other powerful people and an enhancement of one's image. Steven A Cohen offers a good example. As the head of SAC Capital, the hedge fund he founded in 1992, Mr Cohen amassed a fortune exceeding US$9 billion, but he sought respect and recognition as well, and the art market surely helped him attain them. Over time, he and his wife, Alexandra, put together a collection of works by Picasso, de Kooning, Pollock, Warhol, Koons and others valued at US$1 billion.

Mr Cohen and his firm later came under investigation for insider trading. One of his managers was convicted and sentenced to nine years in prison, and SAC Capital had to pay US$1.8 billion in fines. Mr Cohen himself never faced criminal charges, but in January 2016 he was barred from managing outside investor money for two years.

That spring, Mr Cohen joined MoMA's board. In June 2017, the museum announced that he and his wife were donating US$50 million to its capital campaign and that to acknowledge the gift, it was naming its largest contiguous gallery the Steven and Alexandra Cohen Center for Special Exhibitions. The Cohens, Glenn Lowry declared, are "incredible philanthropists" whose "longtime generosity to the museum exemplifies their deep commitment to sharing the art of our time with the widest possible audience". The value of such a statement to Mr Cohen's reputation was inestimable.

MoMA's chairman, Leon Black, is also an avid art collector. In 2012 he bought a version of Edvard Munch's "The Scream" at auction for US$119.9 million - the most ever paid for a work at auction at the time. Mr Black's net worth is estimated at US$7 billion, most of it derived from Apollo Global Management, the private equity company he heads, which specialises in buying up companies, restructuring them and selling them for a profit.

Some say that private equity saddles companies with debt and strips them of their assets before selling them off; others say private equity invests in companies to enhance their productivity and make them profitable. Both cases no doubt occur, but in most instances, as studies have shown, the benefits accrue overwhelmingly to executives and investors at the expense of workers.

In November 2018, MoMA announced that Mr Black and his wife were donating US$40 million to the museum and that in appreciation it was creating the Debra and Leon Black Family Film Center, spanning two floors of the Ronald S and Jo Carole Lauder Building (Estée Lauder money). The gift was announced at MoMA's annual film benefit and gala dinner. Sponsored by Chanel, the evening featured a presentation of the work of the night's honoree - Martin Scorsese - in the Roy and Niuta Titus Theaters (Helena Rubinstein money). The guests then dined in the Donald B and Catherine C Marron Atrium (Paine Webber and private equity money). Such celebrity mixing helps deflect attention from the part that companies like Mr Black's have played in the continuing transfer of wealth from the middle class to the moneyed elite over the past 30 years.

Is there an alternative to the current system? An obvious one would be to substantially increase public funding for the arts in general, and museums in particular. The budget of the National Endowment for the Arts has remained largely flat for the past 20 years. In 2018, MoMA received a paltry US$22,000 in government funds (from New York City), compared with the US$136 million it got from private sources. In fact, MoMA does not seek or receive federal or state funding.

Such a position is understandable, in light of the periodic public uproars over provocative works, and even their censorship, such as the infamous cancellation of an exhibition of homoerotic photos by Robert Mapplethorpe in 1989. But MoMA in fact gets substantial public support through the tax write-offs its wealthy donors receive as well as its own nonprofit status. The public is in effect subsidising the museum without getting any corresponding say in its governance.

In return for nonprofit status, the government could require MoMA and other museums to allocate a certain portion of board spots to people whose lives are not devoted to making money. The presence of art critics, historians, architects and nonprofit leaders could force museums to consider a much broader array of viewpoints. (Museum boards are already diversifying when it comes to race.) As for more direct public funding of museums, this might seem a long shot in modern-day America, but the current political moment has created new opportunities. If taxes on the rich were raised, which most Democratic presidential candidates support, more public funds could be earmarked for museums - and for libraries, performing arts centres and other cultural institutions. These are popular in communities across America, and providing support could become an effective rallying cry.

MoMA, the Met, the Whitney and other top museums are vital and essential repositories of American culture, but their dominance by the 0.01 per cent makes them highly vulnerable at a time of such social ferment. If they don't change, the protests will only grow and get louder. NYTIMES