Art collectors call for boycott of Russian auction house Phillips

0

As the financial world unites to launch powerful sanctions against Putin’s oligarchs, art auction season has started in London as if nothing has changed.

On Thursday, Phillips – the Russian auction house – will hold an auction of 20th century and contemporary art where a series of three images by artist Francis Bacon are expected to fetch up to $73 million.

Matthew Girling, the former CEO of Bonhams, a rival auction house, told The Art Newspaper that people should boycott Phillips for his Russian ties. Phillips is part of the Mercury Group, which is Russia’s largest luxury goods company. It was founded in 1993 by Russian entrepreneurs Leonid Fridlyand and Leonid Strunin, who are believed to be close to Putin.

Phillips said he did not expect the sanctions to affect his business. Neither Fridlyand nor Strunin are on any US or UK sanctions list and Phillips told The Art Newspaper he would not do business with anyone who was on a sanctions list.

Still, doing business with a powerful Russia-based company is “outrageous,” Andy Hall, a retired hedge funder, oil trader, art collector and philanthropist told The Post.

Leonid Fridlyand is one of the founders of the Mercury Group, owner of the Phillips auction house. Russian society has been the subject of boycott calls.
Pascal Le Segretain

“Some people say they don’t want to mix business and politics, but that’s ridiculous,” Hall said. “Even Exxon is pulling out of Russia – which it didn’t do when Russia invaded Crimea. All bets are off now. The art world is delusional if it feels it can escape it.

Hall, whose collection of more than 5,000 pieces includes notable works by Ed Ruscha, Barbara Kruger and Julian Schnabel, told the Post he bought something from Christie’s – another competing auction house – on Wednesday , but would not buy from Phillips.

Girling, the former CEO of Bonham, said “only a boycott” would attract the attention of Mercury owners to hopefully influence Putin to change his current course of action.”

“We have seen how the world of banking, travel, leisure, sport and culture has responded to the crisis,” he told The Art Newspaper. “Can the art market just ignore it and carry on as normal?”

Leonid Strunin
Leonid Strunin is one of the founders of the Mercury Group, a Russian company that owns the Phillips art auction house. Some collectors are calling for a boycott of the Phillips auction on Thursday.
Sputnik via AP

Russian banks were virtually cut off from the global financial system when they were disconnected from the SWIFT payment device. Russian teams have been barred from global sporting competitions and oligarchs like Roman Abramovich are under pressure to sell their teams. (Abramovich said on Wednesday he would sell the Chelsea football team to the UK.)

But like real estate, the art market has benefited from temporary exemptions from anti-money laundering regulations in the United States over the past two decades. It’s also the largest unregulated market in the world – and it has become a powerful weapon for Putin’s oligarchs to launder billions of dollars.

“Art markets are the perfect way to move money around and not trace beneficial ownership,” Louise Shelley, director of Terrorism, George Mason University’s Transnational Crime and Corruption Center, told The Post. Indeed, bidders are often shrouded in secrecy and store their physical assets – and therefore any trace of ownership – in clandestine and confidential places.

“Therefore, to allow this to continue as the UK attempts to tighten its financial system shows a lack of commitment to closing loopholes,” Shelley said of Thursday’s auction.

Phillips auction house's Instagram page displayed a Ukrainian flag and also issued a statement condemning the incursion into Ukraine;  Yet some collectors have said that such a signal of virtue is not enough.
Phillips auction house’s Instagram page displayed a Ukrainian flag and also issued a statement condemning the incursion into Ukraine; Yet some collectors have said that such a signal of virtue is not enough.
Phillips Auctions/Instagram

Phillips CEO Stephen Brooks posted on social media that the auction house “unequivocally condemns[s] invasion” of Ukraine. The company displayed a Ukrainian flag on its Instagram page.

But some art watchers say that’s not enough.

“Anyone involved in this auction has blood on their hands,” an outraged art consultant who did not want to be named told The Post.

Meanwhile, Hall said that while people don’t want to boycott Phillips for moral reasons, practical reasons should keep people from bidding: The risk is that Phillips’ accounts will be frozen and shippers will find out that they don’t see the proceeds of their sales.

“Phillips is running a good operation, but so are German companies during WWII who were intimately involved with the Nazis,” Hall wrote on his Instagram account. “Will art buyers show solidarity with Ukraine or will the art world display its usual hypocrisy?”

Phillips CEO Stephen Brooks
Phillips CEO Stephen Brooks says the auction house condemns the Russian invasion, but some collectors say it’s time to boycott the Russian art dealer.
LinkedIn

Unofficially, senior Phillips executives are reaching out to investors like Hall to convince them to continue doing business with the auction house, Hall said.

Many of the most high-profile works to be auctioned on Thursday are by artists popular with Russians, such as a 1980s triptych by Francis Bacon that is expected to fetch up to $73 million. This seller is the architect Norman Foster. According to the London newspaper Telegraph, five Monets from the collection of Daniel Snyder, American owner of the Washington Commanders, formerly known as the Washington Redskins, are also up for auction.

Art consultants in London this week who did not want to be named say they are busier than ever – although there may be fewer Russians buying.

A director of Sotheby’s – another auction house – told the Telegraph that they check bulletins every hour to see if any of their buyers and sellers are on government sanction lists.

“I wouldn’t want to be an auctioneer this week,” a senior auctioneer told the newspaper.

On Tuesday, Phillips launched a whisper campaign to let potential buyers know that their sellers are not on any sanctions list or have any connection to Putin, according to people familiar with the matter. But the list is growing rapidly.

Phillips, Sotheby’s and Christie’s are expected to generate more than $800 million in sales this week, up 35% from last year.

Share.

Comments are closed.