True tales of secrecy, opacity and outright thievery in art

Two outsiders tried to crack the art business. They did not like what they found

This article was originally published on 3 May, 2024 by in The Economist.

 

In 1989 Larry Gagosian, who has since become the world’s most powerful art dealer, was asked whether there was anything he would like to see change in the art market. “That is like asking Dante what he would change about the structure of Hell,” he replied, implying, a bit devilishly, that the way things were suited him.

 

It is an imperfect metaphor. Hell is much easier to access—and understand—than the art world. Secretive yet gossipy, illiquid yet always transactional, art is an industry that remains mysterious even to its active participants. Earlier this year the murkiness was spotlighted in an American courtroom after Dmitry Rybolovlev, a Russian billionaire, sued Sotheby’s for fraud, alleging that the auction house had known a Swiss art adviser was fleecing him whenever he bought masterpieces. He lost—these days juries are not especially sympathetic to Russian oligarchs—but the case drew attention to the often opaque practices of art’s wheeler-dealers.

 

“The art market is like a stockmarket where all the shares and their owners are secret,” explains Orlando Whitfield in “All That Glitters”. Mr Whitfield spent years in the art business and watched as his friend and boss, Inigo Philbrick, became one of the most successful young contemporary-art dealers in London—and then one of the most notorious. In 2022 Mr Philbrick was sentenced to seven years in prison, after pleading guilty to wire fraud. In total Mr Philbrick’s scheme involved $86m; the FBI has declared it the largest known art fraud in American history.

 

Mr Whitfield and Mr Philbrick met when they were students at Goldsmiths, University of London and tried to break into art dealing together. Mr Whitfield’s father had been an auctioneer, while Mr Philbrick’s was a museum director in Connecticut. (The painter Frank Stella was Mr Philbrick’s sometime babysitter.) As students, they put together a few novice deals, at one point trying to buy a pair of doors and even a building’s wall that Banksy, a popular street artist, had painted on.

 

Mr Philbrick scored a job with Jay Jopling, founder of White Cube, a prominent gallery in London, and impressed him. Mr Jopling tapped Mr Philbrick to start a new gallery and manage some personal art investments. This is where the perfect picture started to develop some cracks. Mr Philbrick would gain Mr Jopling’s approval to buy a painting but would sometimes go above the agreed price because he wanted to close the deal; he would change the figures before emailing them to accountants.

 

Those were small sins, compared with what later transpired. Mr Philbrick ended up selling the same works to multiple people, lying to secure loans, faking documents and more, as he travelled around on private jets. “The manic complexity of Inigo’s scheme now seems to me analogous to the art market as a whole—deliberate, wilful obscurity as a modus operandi,” writes Mr Whitfield.

 

After Mr Philbrick fled to Vanuatu in the South Pacific, he sent Mr Whitfield documents from his transactions, hoping his friend and former colleague would collaborate on an article to tell Mr Philbrick’s side of the story. But soon Mr Whitfield realised these were the “Pentagon Papers of the art world” and decided to write his own story of what had transpired. “All That Glitters” is the result.

 

While Mr Whitfield shifted from art to writing, Bianca Bosker, a journalist, did the opposite and jumped from journalism into the art world. She worked at galleries, a painter’s studio and the Guggenheim Museum to understand and to chronicle the taste and buying habits that make the $65bn art world hum. She had reported in China before, but “I’d had an easier time sniffing out answers in Chengdu than Chelsea,” she claims in “Get the Picture”.

 

Both books are like “Liar’s Poker”, but for art. Just as Michael Lewis drew back the curtain on the “big swinging dicks” of Wall Street trading floors in his memoir from 1989, these authors double as anthropologists, observing the peculiar social habits of art collectors and vendors. They recount how people rely on art dealers as personal concierges and social co-ordinators, and how, oddly, those who look at a lot of art rarely remark on it. “Discussing the art was like complimenting the crown mouldings at an orgy,” writes Ms Bosker. “I mean, you can—only it’s not why everyone’s there.”

 

The “financialisation” of art (what some call “speculecting”, a portmanteau of speculation and collecting) has been driving up prices for paintings since the 1990s. Practices that are illegal on Wall Street—trading on inside information, manipulating markets, lying to clients—are permissible in the art business. Interestingly, Mr Whitfield posits that more oversight of banks after the global financial crisis of 2007-09 encouraged some financiers to approach art-buying as an outlet for their risk-taking. “The best thing about the art market is that it’s completely unregulated. However, the worst thing about the art market is that it’s unregulated,” a trader at Goldman Sachs told Mr Whitfield.

 

At stake, beyond the million-dollar deals, are some bigger questions, like why people assign value to objects depending on who created them. Though he never actually purchased it, Mr Philbrick was paid to buy an artwork called “Untitled (Welcome)” for an Israeli-Canadian billionaire. The piece by Félix González-Torres was a sculpture of sorts, involving door mats. So when the buyer’s minion came to London, Mr Philbrick tried to recreate it. He bought 100 plastic mats from a hardware store and laid them on his gallery’s floor. “No amount of Diptyque room spray or frantic wafting of auction catalogues would fully banish the smell” of the new rubber, Mr Whitfield recalls, but it did not matter. The delegate saw what looked like the avant-garde work and checked it off his list.

 

There is also the question of harm. Is taking a few extra million dollars from millionaires such a big deal? Mr Philbrick may not think so. Recently released from prison several years early, he is posting photos of his ankle bracelet and life after prison with his wife (who featured on the reality-tv show “Made in Chelsea”) on Instagram. A documentary by the BBC about Mr Philbrick is forthcoming, and “All That Glitters” is being made into a show for HBO.

 

Some still predict that Mr Philbrick could make a comeback as a dealer. “Americans love second acts,” one high-flying art dealer tells your correspondent. He points to Jordan Belfort, known as “the Wolf of Wall Street”, who served a sentence for insider trading but has hatched a second career as a writer. (His latest book, “The Wolf of Investing” was published in 2023.) Michael Milken, the junk-bond king who was charged with securities fraud in 1989 but has reinvented himself as a philanthropist, holds his annual conference in Los Angeles; the bigwigs of global business and finance attend it each May.

 

Whether Mr Philbrick even wants to break back into the art world is a question only he can answer. There is ongoing legal wrangling over art works he sold, including a painting by Jean-Michel Basquiat, called “Humidity”. Fittingly, “Humidity” is a portrait of the artist Andy Warhol standing next to—who else?—his art dealer.