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Getty to review acquisition ethics

The Getty has recently announced that they will form a special board to look into the acquisition practices of the institute. While this is a move that should be welcomed, it will be seen by many as too little action, taken far too late – an attempt to avoid future legal proceedings based on the institute’s actions in the past.

From:
Los Angeles Times [1]

October 30, 2005
New Getty Panel to Examine Operations
The committee will look at the acquisition of antiquities and how the beleaguered trust and chief Barry Munitz spent tax-exempt funds.
By Jason Felch and Robin Fields, Times Staff Writers

After months of mounting troubles, the J. Paul Getty Trust announced Saturday that its board of trustees had formed a special committee to investigate its acquisition of antiquities and its use of tax-exempt funds.

The committee, composed of five board members, will review issues related to an Italian criminal inquiry into allegedly looted antiquities and an investigation by the state attorney general into spending by the trust and its chief executive, Barry Munitz.

John Biggs, chairman of the trust’s board and head of the new committee, said through a spokesman that the panel would also “review the institution’s corporate governance, including policies and procedures, and then make whatever recommendations — if any — we feel are appropriate for the full board to consider.”

In announcing formation of the committee, the trust said in a statement that it had retained a prominent Los Angeles attorney, Ronald L. Olson, to assist with the independent review.

“The creation of the special committee reflects the serious commitment by all of our trustees to ensure that the J. Paul Getty Trust, its board and each of its members and employees meets all legal requirements as well as the highest ethical standards while carrying out the trust’s mission,” Biggs said in the statement.

The announcement marks the first response by the country’s third-largest private foundation to the investigations and to an ethical breach by its former antiquities curator.

In addition, the Getty has been beset by what current and former employees have described as low morale since the resignation of the Getty Museum’s popular director, Deborah Gribbon, more than a year ago.

The $9-billion trust, with its landmark center on a Brentwood hillside, is the world’s richest art institution. The museum is probably its best-known branch. The trust also operates the world-renowned Conservation Institute, which restores and protects art worldwide; the Research Institute, with an 800,000-volume library; and a grant program, the Getty Foundation.

Since the beginning of this year, Biggs and other board members have offered few public comments on the trust’s problems other than to say it had done nothing inappropriate or illegal.

After The Times reported in June on Munitz’s use of the trust’s tax-exempt money to fund perks and lavish travel, the board was publicly chastised by Sen. Charles E. Grassley (R-Iowa) for not taking a more assertive role.

“I’m concerned that the Getty board has been spending more time watching old episodes of ‘Lifestyles of the Rich and Famous’ than doing its job of protecting Getty’s assets for charitable purposes,” Grassley, chairman of the Senate Finance Committee, said in a statement several months ago.

His committee is reviewing laws that govern nonprofit organizations and proposing tighter controls on how they use their money.

In response to the Getty’s troubles, board members have now concluded that they need a separate committee apart from Munitz and other Getty managers to consider all matters related to trust policy, said Ramon Cortines, a longtime trustee who has spoken out publicly about the need for more transparency in the organization.

“This puts the board chair and vice chair in the driver’s seat, looking at policy issues independent of the management of the Getty,” Cortines said, referring to Biggs and Louise Bryson, the board’s vice chairwoman. “This creates a checks and balances system.”

Munitz, who is both the trust’s chief executive and a trustee, will not sit on the special committee. He has pledged his “full support for this effort,” the Getty statement said.

In addition to Biggs and Bryson, the committee members will be Lloyd Cotsen, Jay Wintrob and Luis Nogales. Cotsen, Wintrob and Nogales have links to Munitz.

Cotsen is a philanthropist, archeologist and former chief executive of Neutrogena Corp. Munitz sits on the board of Cotsen’s family foundation.

Nogales, the former president of Univision, sits with Munitz on the boards of AIG SunAmerica and KB Home. Wintrob is chief executive of AIG SunAmerica. Both companies were founded by billionaire philanthropist Eli Broad, a close friend of Munitz.

In December, The Times reported that Broad purchased a Brentwood property from the Getty for $700,000 less than its appraised value. Records show that Munitz directed his aides to delay listing the property publicly so he could discuss a transaction directly with Broad. Munitz has acknowledged that his involvement with the deal would have posed a conflict of interest, given his friendship with Broad, but has denied being directly engaged in the land sale.

The deal is now being reviewed by the state attorney general.

Betsy Buchalter Adler, a partner at a San Francisco firm that specializes in nonprofit law, said the Getty board’s formation of the special investigative panel was typical for an institution facing accusations of mismanagement or misconduct.

“This is what a well-managed board does,” Adler said, adding that she expected the state attorney general to monitor the review closely.

Others were more skeptical.

Patty Gerstenblith, co-chair of the American Bar Assn.’s cultural property committee and a professor of law at DePaul University in Chicago, said formation of the committee could be “a defensive action to deflate or deter the state’s investigation.”

“The other possibility is that they are serious about it and they want to get to the bottom of all these issues,” she added.

Gerstenblith said the trust’s promise to investigate its antiquities collection was, to her knowledge, a first in the museum world.

The Getty’s announcement comes amid the Italian criminal trial of the Getty’s former antiquities curator, Marion True, who is accused of trafficking in looted antiquities. Italian officials have said their decade-long investigation has identified dozens of allegedly looted artifacts at the Getty and other American museums.

True retired last month after The Times questioned Getty officials about a $400,000 loan she received with the help of one of the museum’s antiquities suppliers. Her trial on the Italian charges resumes next month.

Gerstenblith said she hoped that Olson, the board’s outside counsel, would get legal advice on antiquities law, which is highly specialized. The Getty’s announcement said the special committee was authorized to hire experts to assist in Olson’s review.

Gerstenblith said she was encouraged that the Getty statement mentioned ethics, since there are instances in which an antiquity is acquired legally under American law but is considered looted and smuggled under the source country’s laws. Addressing the ethics of such transactions will help bridge that gap, she said.

Olson’s skills as a litigator and mediator may prove useful to the Getty as it faces demands from Italy for the return of many of its most prized antiquities.

Among his former clients are billionaire investor Warren Buffett and the Philippine government in its suit against the nation’s former dictator, Ferdinand Marcos. Last year, Gov. Arnold Schwarzenegger appointed Olson co-chairman of the California Commission for Jobs and Economic Growth. Olson chairs the Rand Corp. Board of Trustees and served on the Board of Councillors of USC’s Annenberg School for Communication.