"The Art Industry is Corrupt." Is This a Fair Statement?
By Serena Mundy
Inigo Philbrick Before His Arrest
The case and trial of Inigo Philbrick rocked the art world. His lawyer proclaimed “the [art] industry is corrupt from top to bottom. I suspect many more cases like this would appear if the art world were investigated thoroughly.” The Philbrick affair unveiled many questions concerning the corruption and immorality of the art market. A hugely successful contemporary art dealer, Philbrick pleaded guilty to defrauding clients of more than $86 million by selling singular works of art multiple times and defaulting on loans. His lawyer claimed that Philbrick was merely a ‘symptom’ of the corruption. How much truth is there to this statement? Has this case revealed the tip of an immeasurable iceberg?
The art world reacted with outrage, insisting it mostly consists of honest people. Afterall, the statement is largely unfair – how can an entire market be judged by one bad seed? Additionally, corruption is not limited to the art market – take the cases of Anna Sorokin and Angela Gulbenkian for instance. The Eiffel Tower was famously sold twice! Vast monetary sums often attract crime. Philbrick is merely an example of this - when asked by Judge Stein of New York’s Southern District Court what his motivation was, he responded ‘the money, your honour.’ However, this instance of unmasked corruption in a high-end contemporary art dealer is unrepresentative of the art industry as a whole. The industry is highly diverse, ranging from small-time collectors to huge auction houses. The statement is therefore unrepresentative and blind sighted to other industries.
The question that must therefore be probed is why we see so much corruption in this industry and whether it will change. The main problem with the market is that parts of it are unregulated, unlike other industries, like finance. For example, it is not mandatory to reveal buyers and sellers, and pricing and prices do not have to be opaque, opening it up for misconduct. However, auctions are regulated, limiting corruption there. The art world does not necessarily desire more regulation. However, more regulations are coming in, for instance the fifth anti-money-laundering directive of 2018. This directive makes it more difficult for art market participants to accept money over £10,000 without extensive checks of where it’s coming from. Additionally, associations such as The Society of London Art Dealers (SLAD) regulate art dealers. Yet how can an industry so diverse be regulated?
Therefore, while the case and trial of Inigo Philbrick shed light on corruption within the art industry, they are not representative of the whole market. They merely represent a man who got in over his head, something possible in any industry. The statement, therefore, is largely unfair.
Notes
https://www.theartnewspaper.com/2021/12/02/is-the-art-market-corrupt-to-the-core-balderdash
https://www.theartnewspaper.com/2021/11/18/dealer-inigo-philbrick-pleads-guilty
https://news.artnet.com/opinion/kenny-schachter-on-the-2019-fall-new-york-auctions-1708122
Adam, Georgina. “Fraud: how corrupt is the art world? Plus, Andy Warhol’s Catholicism and Moscow’s new museums.” The Week in Art. 26/11/21.