OVERVIEW: Art in Embassies Program Gave Podestas, Jeff Koons, Rockefellers, Clintons, Marina Abramovic, Rothschilds even Alefantis access to a private shipping channel that could bypass airport security credit: @Swordfish69
Jeff Koons ‘Rabbit’ Sets Auction Record for Most Expensive Work by Living Artist
Robert E. Mnuchin, an art dealer and the father of Treasury Secretary Steven Mnuchin, made the winning bid for Mr. Koons’s 1986 “Rabbit” from an aisle seat near the front of the salesroom. He was seated near Peter Brant, the collector and private museum-owner, and Jeffrey Deitch, the dealer.
It was the ultimate prize among six works offered at Christie’s from the collection of the magazine publisher S.I. Newhouse Jr., who died in 2017. Estimated to raise at least $50 million, this sculpture, made in an edition of three and one artist’s proof, was the last example left in private hands, according to Christie’s.
The price, surpassing the $90.2 million with fees achieved, again at Christie’s, for Mr. Hockney’s 1972 painting, “Portrait of an Artist (Pool With Two Figures),” confirmed how Mr. Koons’s metal sculptures have become the ultimate billionaire trophies produced during the contemporary art boom of the 1980s and ’90s. The Hockney milestone came at the expense of Mr. Koons, the previous record-holder, whose “Balloon Dog (Orange)” sold at auction for $58.4 million in November 2013.
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Blacksmith21 ago
That is insane - American artists like O'Keefe, Klee, Pollack, etc. don't even command prices like that. This reeks of a money laundering operation.
What really throws me is Mnuchin being involved. But art is art, regardless of who or what created it. I love art, but the industry is filled with freaks and creeps.
Nice find.
TheMystic ago
Caught this on the news tonight. I remember reading on this board awhile ago about Koons and possible money laundering through artwork.
When I heard the amount, the name Koons and that it was a damn rabbit, I knew you guys would be on top of it!
I am also scratching my head over the Mnuchin connection. Then I read this article and this part stood out. The sculpture was projected to sell for $70 million but exceeded expectations when Robert Mnuchin outbid several Asian investors.
Could the Asian investors be from China? Right now they are probably freaking out about what a Trump reelection could do to their economy. Could they have been trying to launder money into our country to financially help the cause of outing Trump? I wonder if Koons will ever get that 91 million or just a big middle finger when it comes time to pay up? Was Robert Mnuchin prepared to outbid them whatever the cost in order stop the transaction? Who knows but something is up, this is really weird.
Are_we_sure ago
The selling price was 80 million, the commissions and fees bring it up 91 million. The auction house had estimated it at 50-70 million, so it exceeded expectations, but not hugely. That article makes it look like Mnunchin came it at the last minute. That's incorrect. There was about 4 bidders going through most of the bidding which started at 40 million.
They certainly could be, but Asia is a pretty huge place with a lot of serious players in the art world, Japan, China, Saudi Arabia and the United Arab Emirates come to mind. India has wealth too, but not sure if they have any serious collectors in this market.
No. The money laundering aspect of this makes absolutely no sense. They spent 91 million bucks on this. There's only 4 people in the world willing at the moment to spend more than $60 million on this, you will need to hold on to this for a long time to get back what you paid.
Wonder no longer. Koons gets exactly $0 of this money. Why? He didn't own the piece up for sale. He created back in the 80's and sold it. The guy who eventually bought it died and now his estate put it up for auction, after the auction houses take their cut, his estate will get $80 million dollars and his heirs will get some chunk of that once it all works out. Koons, as a living artist, gets to charge a lot of money for new works, but he made nothing from this sale.
How does this make sense? If the Chinese were going to pay $60 million and Mnuchin paid $70 million, what exactly was gained? The Chinese still have $60 million bucks and the guy who owns the sculpture just got $10 million more.
It's not really weird. There's a strong market for Jeff Koons work and post war American art has been selling really strongly.
TheMystic ago
You are correct about the money not going to Koons. I forgot that it was a piece that had already been sold and the proceeds would go to the auction house and estate of the deceased owner.
I still think something is up within the art world though and some of the outlandish prices being paid are payment for other things.
Are_we_sure ago
I think a giant part of this is we who don't have $91 million dollars can't conceive of spending $91 million dollars on anything. If we came into that much money we would buy a big house and big vacation house. So the whole thing doesn't make sense to us.
Well, these are folks who either grew up with big houses and vacation houses or got so rich they have already had those things for decades, so another luxury vacation home isn't going to do it for them. But owning a singular piece of art may excite them, the idea of owning David Hockney's Portrait of an Artist (Pool with Two Figures) ($90.3 million), something that there is only one of,...that gets there juices going. That will also make your other rich friends envious maybe. And also it marks you as someone, not just with a lot of money, but taste and discernment, perhaps.
The other thing about our suspicions, is we should test them against the other alternatives, especially easier alternatives. For instance, isn't there a lot of other easier ways to make "payments for other things" that using art. I can think of dozens. The old suitcase or duffle bag full of money being one of them.
TheMystic ago
I see some of your points, but you have to admit you can't just pay someone 90 million in cash....how many duffel bags would that be?
Plus they need the tax write off and a way to hide the money. If you went around paying everyone cash in such large sums, it won't take long before you have the feds breathing down your neck.
I have been around the business world a little bit and have seen some of the ways they get around things. A couple of examples.
We will get approached by clients to give money to a charity of their choosing or one they have started themselves. I wonder how much money is really going to these charities and how much is going into their pockets.
We also see a lot of them use third party accounting firms. You run all your invoicing through them and they take a fee off your invoice usually 2-4%. I seen one publicly traded company have a problem when the third party accounting firm pocketed the money, did not pay the invoices and later claimed bankruptcy leaving many people across the country high and dry. It was later found out the CFO was also getting paid big kickbacks from the 3rd party firm. Surprise, surprise no one went to prison either.
Haha, I really don't know where I was going with this other than there is a lot shady stuff like this going on and I'm totally okay with never being filthy rich because some of them are crappy individuals willing to do things I could never do.
Are_we_sure ago
And also you never use an amazingly high profile art auction for this either. Do you realize that both of the scenarios are incredibly unlikely.
High profile auctions are the best protected segment of the art world, because the auction houses have to do Know Your Customer, Due Diligence. Sotheby's or Christie's ain't gonna let you roll up with $90 million in cash and get in on the auction. So you have already had to get your money into the banking system and to get into an auction, you need to explain how you have $90 million to spare
Also how often do you have to make single payment of $90 million?
If you have that much money, you set up a couple of companies and send invoices between the two. Often these would be owned by one or more shell companies and ownership in a place like Cyprus or the Cayman Islands would be helpful. For $90 million you would probably have a network of companies.
What tax write off? How do you write this off on your taxes? Putting money in obscure art may hide it, but not the piece with the highest price tag by a living artist. You not hiding anything at that point.
Who would you need to pay cash in high sums? As long as you are not banking, you can find an awful lot of people who will take the cash. In fact, experts say cash that never sees the inside of bank is the hardest to trace.....but that much cash is an issue.
This is not an example of money laundering and doesn't involve art.
This is not an example of money laundering and doesn't involve art.
Haha. Yeah, I think you got sidetracked....your examples appear to be straight out fraud.
A couple of interesting example of real life money laundering are Paul Manafort. He got secret payments in Ukraine, moved the money to a countries with shady banking, I think it was Cyprus and others. Then he did a couple of things. He used the cyprus money to fund a shell company and used that shell company to buy three pieces of new york real estate. Free and clear no mortgage. Then he quietly had the deeds transferred from the shell company to him personally for $0. Then he took out multiple mortgages on the properties (and lied on the applications) to get money he could use. He know had bank checks he could deposit and use as he wished.
He also spent $900,000 on rugs from one store and $800,000 on clothing from another store....or at least he appeared to. What he was probably doing was paying 4x times the normal price for a rug use wire transfers from cyprus banks and then getting a rug and 75% of his price back in cash. He could then either use the rug or sell it to a different store for cash.
The other example is the Russian Laundromat, a single money laundering network that moved $20 billion in cash out of Russia. https://www.occrp.org/en/laundromat/the-russian-laundromat-exposed/
Mrs_Ogynist01 ago
Hmmm... interesting thought.