The Case of the Miss­ing Car­avag­gio

Are the Wilden­steins hid­ing their as­sets?

Bloomberg Businessweek (Asia) - - CONTENTS - By James Tarmy and Ver­non Sil­ver

Over re­cent weeks in hushed New York din­ing rooms and pri­vate Parisian sa­lons, Guy Wilden­stein has been a walk­ing ob­ject les­son in how bil­lion­aire dy­nas­ties de­cline: sur­rounded by lawyers, pitied, sell­ing off paint­ings—yet still fab­u­lously rich. This is how it goes when you’re fac­ing a trial in an in­her­i­tance-tax case that could cost your clan half a bil­lion dol­lars. Or at least, what’s left of the clan: His brother, fa­ther, and step­mother are dead. It falls to Wilden­stein, 70, to en­sure the fam­ily’s fifth­gen­er­a­tion art-deal­ing for­tune makes it to the sixth. Com­ing up with €448 mil­lion ($496 mil­lion) in cash—the amount the French govern­ment claims his fam­ily owes in un­paid taxes and fees—would be enough to bring even the world’s rich­est to the brink of catas­tro­phe.

Still, life must be lived. Wilden­stein parted with $1.2 mil­lion worth of old mas­ters at a Christie’s auc­tion in New York ear­lier this year, and he still has the Man­hat­tan town house he bought for $32.5 mil­lion at the end of 2008, though, ac­cord­ing to re­cent press re­ports, that’s on the block, too. In Paris, where the tax trial will be held, he has the fam­ily apart­ment, though for now it’s been legally seized and the fur­nish­ings are un­der seal. He still goes out in his dou­ble-breasted suits to mix with the god­fa­thers of French fi­nance, draw­ing ad­mi­ra­tion for keep­ing up ap­pear­ances. They know it’s but for the grace of the feared fisc— France’s equiv­a­lent of the U.S. In­ter­nal Rev­enue Service—that they them­selves aren’t ex­plain­ing off­shore trusts and Pi­cas­sos in vaults to the tax­man. Af­ter all, Wilden­stein is still one of them: the one who sold his Gulf­stream IV to then-Lazard Chair­man Michel David-Weill back in 2003; who banks with Roth­schild, as his fam­ily has for decades; who sus­tains the Wilden­stein In­sti­tute, a tem­ple to art his­tory whose cat­a­logues raison­nés for the most im­por­tant artists of the 19th and 20th cen­turies are so ex­haus­tive that a work by Monet would be worth­less with­out a so-called Wilden­stein in­dex num­ber.

“No­body’s done as well as the Wilden­steins in terms of cash and power and, in a way most im­por­tant of all, re­spectabil­ity,” says art his­to­rian John Richard­son. “No­body.”

The fam­ily’s busi­ness runs on se­crets—so fiercely kept that Wilden­stein has said he didn’t learn about the fam­ily’s fi­nan­cial machi­na­tions him­self un­til the death in 2001 of his fa­ther, Daniel. When it came time to set­tle the es­tate, Guy and his brother, Alec, claimed their fa­ther had a net worth of €40.9 mil­lion, or about $45 mil­lion. To cover the re­sult­ing es­tate tax bill of €17.7 mil­lion, they gave the French Repub­lic— Nicolas Sarkozy, then pres­i­dent of France, was a close friend of the fam­ily—a set of bas-re­liefs by Marie An­toinette’s fa­vorite sculp­tor. Lovely as the re­liefs were, this turned out to be a true let-them-eat-cake mo­ment, toss­ing crumbs to the French pub­lic while, French prosecutors claimed, the Wilden­steins were keep­ing a tow­er­ing con­fec­tion of prop­erty, art, cash, and in­vest­ments for them­selves. In the month of Daniel’s death alone, the govern­ment un­cov­ered a ver­i­ta­ble air­lift of art, with $188 mil­lion worth of paint­ings moved from the U.S. to Switzer­land.

One paint­ing stayed where it was. A Wilden­stein-owned Car­avag­gio hung in a gallery at the Metropoli­tan Mu­seum of Art in New York. Known as The Lute Player, it was worth tens of mil­lions of dol­lars, quite pos­si­bly more than the en­tire de­clared es­tate. French prosecutors would soon con­clude there had to be more like it in the fam­ily vaults.

Af­ter mak­ing an ap­pear­ance be­fore a judge one morn­ing last Jan­uary, Wilden­stein lurked silently in a cor­ri­dor out­side a crim­i­nal court­room at the Palais de Jus­tice, wrapped in his tan over­coat. He stood be­hind a lawyer who did all the talk­ing about the un­pleas­ant le­gal busi­ness, which is ex­pected to cul­mi­nate in a trial later this year.

He had al­ready told his story in the glossy Côte d’Azur beach read Paris Match a few months be­fore. The last time a mem­ber of the in­su­lar Wilden­stein clan made use of the mass me­dia was the first time most Amer­i­cans heard of the fam­ily: In the late 1990s, Guy’s sis­ter-in-law, Jo­ce­lyn, courted pub­lic­ity from New York mag­a­zine and Van­ity Fair dur­ing a di­vorce from Alec; al­le­ga­tions emerged of Rus­sian mod­els, pet leop­ards, five-fig­ure laun­dry and dry-clean­ing bills, and Jo­ce­lyn’s dis­fig­ur­ing fa­cial surgery, which was, ac­cord­ing to Alec, her on­go­ing at­tempt to look more like a cat.

“We have al­ways been very dis­creet peo­ple,” Wilden­stein told the French mag­a­zine. “My fa­ther was not worldly, I am not, to the point that al­most no one knows what my wife looks like.” (Worldly, of course, is dif­fer­ent from global; Wilden­stein is a French cit­i­zen, born in New York, who ed­u­cated his chil­dren at the Ly­cée Français on Man­hat­tan’s Up­per East Side and Ivy League schools.) He was so down to earth, Wilden­stein claimed, that de­spite be­ing pres­i­dent of the fam­ily busi­ness, Wilden­stein & Co., since 1990, he was in no po­si­tion to have hid­den the fam­ily’s for­tune from the French govern­ment, as he’s charged with do­ing.

“My brother and I were clue­less,” he said. “My fa­ther never spoke of his busi­ness. He would not come to ask me for ad­vice to man­age his for­tune or dis­pose of his prop­erty while he was alive. I knew he had the trusts, but he never in­formed me of de­tail.” Through a lawyer, Wilden­stein de­clined to com­ment for this ar­ti­cle.

In 1870, Nathan, the founder of the Wilden­stein dy­nasty, left his na­tive Al­sace for Paris, where he soon switched pro­fes­sions from hemming pants to hawk­ing paint­ings and opened his first gallery, on the Rue Laf­fitte. The art world was in tran­si­tion: For cen­turies, the only peo­ple who bought and sold oil paint­ings of any qual­ity were the aris­toc­racy of Europe; there were mar­riages to ar­range, mis­tresses to flat­ter, and châteaux and cas­tles to fill with whim­si­cal land­scapes and frol­ick­ing nymphs. But by the end of the 19th cen­tury, that same aris­toc­racy was at the tail end of a 200-year-long de­cline, ground down by in­dus­trial and po­lit­i­cal rev­o­lu­tions.

The old world’s demise co­in­cided with the rise of the new:

Flush with al­most unimag­in­able wealth, Amer­i­can mil­lion­aires like the Rock­e­fellers, Fricks, and Guggen­heims were eager to buy what the old aris­toc­racy was des­per­ate to sell. Nathan, and then his son, Ge­orges, be­came the mid­dle­men, ar­riv­ing cash-in-hand to empty châteaux of mas­ter­pieces and then, in turn, sell them. For the best of th­ese works, the next step was in­evitably for them to end up in the great mu­se­ums of the U.S.

Take, for ex­am­ple, Jean-Honoré Frag­o­nard’s The Two Sis­ters, a lively por­trait of two el­e­gantly dressed young women cur­rently on view in Gallery 615 of the Met. First in the pos­ses­sion of the Mar­quis de Veri, a prolific French art col­lec­tor, it bounced to another mar­quis, then to a col­lec­tion in Swe­den, next to the con­sul gen­eral of Russia, and then, in 1916, to the Wilden­steins. Their gallery held on to it for two years and then sold it for $194,000 to Amer­i­can coal-min­ing mag­nate Ed­ward Ber­wind, whose fam­ily later gave it to the Met. It was just one of many. Ber­wind, for one, bought another picture, by Marie-Guillem­ine Benoist, from the Wilden­steins that year for $228,000.

In 1903 the Wilden­steins opened a satel­lite gallery in New York; in 1905 they moved their Paris gallery to 57 Rue La Boétie, an or­nate man­sion de­signed by Charles de Wailly, who also de­signed the Paris Odéon. By 1925 there was a Wilden­stein gallery in Lon­don, and the fam­ily was sell­ing art­works for sev­eral thou­sand times the av­er­age U.S. an­nual in­come. In 1915 they bought the Château de Mari­en­thal, one of the largest pri­vate houses in Paris; a few decades later they moved their New York gallery to a five-story man­sion on East 64th Street, then bought another man­sion a few doors down as the fam­ily res­i­dence.

Daniel, Ge­orges’s son and sole leader of the third gen­er­a­tion, was on course to trans­form the gallery and his fam­ily from mere deal­ers into tow­er­ing ex­perts in the field. Based for most of his life in Paris (though the pri­vate jet, with the fam­ily’s in­signia of three blue horse­shoes on its tail, made con­ti­nent hop­ping easy), Daniel fash­ioned him­self as a gen­tle­man-scholar, es­tab­lish­ing the Wilden­stein In­sti­tute in Paris. The in­sti­tute’s sig­na­ture was its cat­a­logues raison­nés. Its Monet cat­a­log took 40 years to as­sem­ble; its Edouard Vuil­lard, 60 years. Work of this sort height­ened the gallery’s sta­tus even fur­ther. “I think it was when you were super rich and wanted to show off, you’d go to Wilden­stein’s,” says Richard­son, who is best known for his mul­ti­vol­ume bi­og­ra­phy of Pi­casso. “You could tell ev­ery­one back in Chicago, ‘Oh, I was in Wilden­stein’s the other day. I’m think­ing of buy­ing a Raphael.’ ”

In many ways, the Wilden­steins’ in­flu­ence peaked in 1990, the year Guy be­came pres­i­dent at Wilden­stein & Co. and un­veiled the Car­avag­gio that would end up on the Met wall. Long thought to be a copy, the paint­ing was an old mas­ter, ac­cord­ing to Keith Chris­tiansen, then cu­ra­tor of Euro­pean paint­ings at the Met. The news was rolled out with a 50-page cat­a­log and a Met ex­hi­bi­tion, A Car­avag­gio Re­dis­cov­ered: The Lute Player. A New York Times re­view called the paint­ing’s au­then­tic­ity ir­refutable and noted that the work had been placed on “long-term loan” at the mu­seum.

Left un­said was the wind­fall for the Wilden­steins. The Lute Player’s new­found sta­tus shifted its es­ti­mated value from thou­sands of dol­lars to some­where just shy of price­less. Lists of the most valu­able paint­ings in pri­vate hands put its cur­rent value at up to $100 mil­lion, though the dearth of top-level Car­avag­gios at auc­tion means assess­ing its true price is im­pos­si­ble. All of this spec­u­la­tion would be aca­demic—the paint­ing was on loan to a mu­seum, af­ter all—if the Wilden­steins hadn’t al­most im­me­di­ately bor­rowed against the work’s value. While the Car­avag­gio ap­pre­ci­ated in the Met, the fam­ily in­vested the paint­ing’s value as it saw fit.

Yet just as Guy, then al­ready 55 years old, was fi­nally eas­ing into the lead­er­ship of his fa­ther’s busi­ness, the busi­ness changed. “Now the big money is largely in mod­ernist art,” Richard­son says. “And the old mas­ter depart­ment side of the busi­ness, which was their main thing, is not do­ing at all well.” By the late 1990s the fam­ily be­gan to frag­ment, and its art deal­ing, at least pub­licly, be­gan to sub­side. They were less in the art busi­ness than in the be­ing-rich busi­ness. And then the Wilden­stein women turned the ta­bles.

Judg­ing by his re­ac­tion, Alec wasn’t ex­pect­ing his wife to re­turn home on the night of Sept. 3, 1997. Jo­ce­lyn had been safely far away at the 75,000-acre Wilden­stein ranch in Kenya (the one with the ele­phants and white rhi­nos, where Out of Africa was filmed). Ar­riv­ing at their Man­hat­tan town house, she found 57-year-old Alec with a 19-year-old wo­man. Alec, fu­ri­ous at the in­tru­sion, bran­dished a semi­au­to­matic pis­tol while hold­ing a towel around his waist. Jo­ce­lyn called the po­lice, and Alec spent the night in jail. The en­su­ing di­vorce, played out in the New York tabloids, was just a pre­view of how the fam­ily’s fi­nances would be ex­posed fol­low­ing the pa­tri­arch’s death four years later.

In Oc­to­ber 2001, Daniel, who had bat­tled cancer, fell into a coma. His sec­ond wife, Sylvia, sat vigil by his hos­pi­tal bed un­til his death on Oct. 23. Two weeks later, she signed away her rights to her late hus­band’s es­tate. Ac­cord­ing to Sylvia, her step­sons—Guy and Alec—had told her the taxes would bank­rupt her if she didn’t. It wasn’t un­til two years later that she

7 1. Vin­cent van Gogh’s Roses, 1890, do­nated by the An­nen­berg fam­ily to the Met in 1993; in 1951 the Wilden­steins bought it for $100,000 and sold it 10 days later for $135,000. 2. Michelan­gelo da Car­avag­gio’s The Lute Player, circa 1597, long thought to be a sec­ond-rate copy; the Wilden­steins “dis­cov­ered” it in their New York vault. 3. Jean-Bap­tiste Carpeaux’s Ugolino and His Sons, 1867, which the Wilden­steins sold to the Met in 1967. 4. Pi­etro Loren­zetti’s The Cru­ci­fix­ion, circa 1340s; the Wilden­steins sold it to the Met in 2002. 5. Jean-Au­gust-Do­minique In­gres’s Comtesse d’Haus­sonville, 1845, which the Wilden­steins sold to the Frick Col­lec­tion in 1927. 6. Claude Monet’s Jean Monet

on His Hobby Horse, 1872; the Wilden­steins bought the paint­ing from French-Jewish art dealer Ge­orges Bern­heim in 1938, then sold it to a Stan­dard Oil heiress in 1943. 7. Jean-Honoré Frag­o­nard’s The Two Sis­ters, circa 1769-70, which the Wilden­steins sold to the Amer­i­can coal mag­nate Ed­ward Ber­wind for $194,000 in 1918. 8. Gus­tave Caille­botte’s Paris Street; Rainy Day, 1877; the Wilden­steins sold the paint­ing to the Art In­sti­tute of Chicago in 1964.

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Daniel, left, and Alec at the New York gallery in 1965

Daniel, cen­ter, with his sec­ond wife, Sylvia, and Guy in 1984

Jo­ce­lyn on the cover of New York mag­a­zine in 1997

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