The Art of the Deal

An inside look at the secret meetings that sealed the fate of the iconic Eakins painting The Gross Clinic, and why so many people close to the deal still have their knickers in an art-world twist.


WHEN THE PHONE rang on a November afternoon in the D.C. office of Earl “Rusty” Powell III, director of the National Gallery of Art, he couldn’t have realized what was about to happen. One guesses that in retrospect, Powell wishes he hadn’t picked up: It was the Governor of Pennsylvania calling, and the Governor wasn’t in a very good mood.

Ed Rendell had just attended a private meeting called by Arlen Specter that featured the Senator, Philadelphia Museum of Art CEO Anne d’Harnoncourt and Mayor Street, all pleading the cause of keeping Thomas Eakins’s painting The Gross Clinic in Philadelphia to a group of the region’s wealthiest people. The meeting was held in the dim, brown-walled Eakins Gallery in Thomas Jefferson University’s Alumni Hall — inside enemy territory, one might say, since Jefferson had stunned those present a few days before by announcing it had sold The Gross Clinic jointly to the National Gallery of Art and Crystal Bridges, a nascent museum in Arkansas, for $68 million. As is well-known now, Jefferson offered Philly institutions 45 days to match the offer. “I got there 10 minutes early because I wanted to talk to Arlen,” says Rendell, who had never viewed the huge painting before, “and when I saw it, I realized how important it was, and that really fired me up.” (Which gives you an idea of the painting’s impact, since Rendell is better known for his love of the Eagles than a passion for art.) Rendell characterizes the mood at the meeting as not especially hopeful, saying, “If there was optimism, it was guarded optimism.”

So after he left, Rendell impulsively dialed the National Gallery’s Powell, which conjures the priceless image of the white-haired museum director elegantly squirming in his office while Rendell barked at him. “I said, ‘This is a national disgrace. You shouldn’t be taking this Philadelphia painting out of Philadelphia,’” remembers Rendell. “I called Anne d’Harnoncourt and said, ‘I just called this guy on a whim, you might want to follow up with him.’” (Uh-oh.)

Rendell’s technique was a bit more blunt than the way things are typically handled in the art world, but hey, this is Philly, and really, nothing was the norm in l’affaire Gross Clinic. Even today, it’s hard to find anyone involved who isn’t somehow irked; you get the feeling there would be fewer hard feelings if the canvas had been stolen from Jefferson by cat burglars one night, spirited to Las Vegas, and secretly brokered to Steve Wynn.

The furor that swirled up around the sale of the university’s acclaimed painting took Jefferson’s president, Robert Barchi, in particular by surprise — which isn’t easy to do. Barchi, a tall, poised, polite molecular neuroscientist, is one of the more intelligent people around, but he’s pained by being cast as a mercenary Grinch who — at Christmastime — ruthlessly cashed in a Philly treasure. “Frankly, we weren’t equipped to display or conserve a painting of this caliber,” Barchi says, while construction workers labor on a new medical education building rising up just outside his window. Not coincidentally, the university and the hospital are in the middle of a $500-million-plus expansion and transformation, partly funded by the sale of Gross Clinic and, in April, another Eakins canvas, Portrait of Professor Benjamin H. Rand, for about $20 million to — where else? — Crystal Bridges.

The all-out flap that exploded over the past six months about Gross Clinic — a painting that few Philadelphians were aware even existed — does seem excessive, but then again, it’s rare that Philly finds itself with all the ingredients of Da Vinci Code-ish drama: big money, secret meetings with a legendary auction house, a ticking clock. There was Jefferson as the villain, and as subplot villainess, Alice Walton, the country’s second richest woman and patroness of the Arkansas museum. Far richer than Oprah, the daughter of Wal-Mart founder Sam Walton was pilloried for trying to grab a Philly painting with her $16.6 billion fortune made selling cheap toilet paper.


Ironically, even as they’ve skewered Jefferson, observers have also begun to kvetch about the way Philly’s elite rallied to the cause, criticizing the fact that they did save Gross Clinic. “If we can raise $68 million in three weeks to put a painting in that museum,” says mayoral candidate (and rich guy) Tom Knox, “why can’t we fully fund the endowment at Community College?” Or deal with our crime crisis? But that misses the point: The fact that rich people got exercised about a great painting is about as shocking as the fact that rich people like shopping at Bergdorf. Rich people and art go together like peanut butter and jelly, like Prince Charles and polo. And our super-rich aren’t so different from regular Philadelphians: Wealthy Philadelphians are scrappy too, in their quiet way. Picture telling South Philly we’ve sold the Italian Market and are moving the whole thing to California, or, worse, Arkansas, and you have an idea of how art-loving philanthropists felt about The Gross Clinic leaving the city.

Still, you have to wonder: Why are so many people still mad at so many other people over Gross Clinic? The story had a happy ending — didn’t it?

THE ART MARKET OF THE PAST FEW YEARS HAS BEEN particularly heady: Think of David Geffen’s recent $80 million brokering of Jasper Johns’s False Start to a 38-year-old hedge fund tycoon. Or Steve Wynn’s $139 million deal to sell Picasso’s La Reve, funked when Wynn — oh, the agony — accidentally poked his elbow through the canvas.

As these astonishing numbers were being tallied, Robert Barchi was making the move from provost of Penn to president of Jefferson. Barchi arrived at the medical college in 2004, and in his first weeks in office, as he studied its balance sheets in preparation for crafting his ambitious plans for the university, he discovered that Jefferson’s Eakins collection — the college still owns two of the artist’s works — represented nearly 10 percent of its assets. But the most valuable canvas, The Gross Clinic, given to the school in 1878 by alumni who’d bought it for $200, hadn’t been appraised in nearly a decade. When a 2006 appraisal came in far higher than anyone had anticipated, the time had never been better to sell. “The Neue Galerie, whose director is Ronald Lauder, the son of Estée Lauder, paid $135 million for a Gustav Klimt painting,” points out Philadelphia art appraiser and dealer Jeffrey Fuller, who adds that he wasn’t surprised by the high price tag on Gross Clinic. “With inflation, you’ve got bigger demand for the same pool of objects; you’ve got a limited supply.” And in today’s world of blimped-up compensation, it’s hard for traditional museums to compete with private buyers.

“Think about hedge fund managers, and the hundreds of millions of dollars a year they’re making,” says Fuller. “Once you have your houses, your jet, what else is there? People do buy art.” Eventually, of course, this becomes a plus for museums: As collectors acquire significant works and knowledge about art, they almost always develop close relationships with museums. Often they’re asked to become trustees, and in many cases they bequeath their collections to the institutions they’ve faithfully bolstered. (Or, in the case of Gucci Group head and Christie’s auction house owner François Pinault, they open their own museums: Pinault rotates his enormous trove of modern works by artists like Picasso, Pollock, Jeff Koons and Damien Hirst at Venice’s Palazzo Grassi.) While most collectors are aggressively pursuing modern art, the generally huge prices being paid now influence the market as a whole. And the majestic Gross Clinic, called by New York Times art critic Michael Kimmelman “the greatest 19th-century American painting,” was a prize any museum would covet.


Meanwhile, Jefferson was paying about $50,000 a year to insure it (which seems like sort of a bargain, but then again, the painting produced no income). “There are research laboratories above it, and an exercise facility with a swimming pool and a basketball court below it,” Barchi says of the gallery, which isn’t properly temperature- or humidity-controlled. At Penn, he had walked under Eakins’s imposing work The Agnew Clinic every day. “When I was provost, I got a call at four o’clock in the morning that we’d had a steam explosion in the building. I walked in, and the painting was completely opaque,” Barchi says. “We almost ruined that painting.” (The Agnew Clinic was restored by the Art Museum.)

In the summer of 2006, Jefferson’s chairman, Brian Harrison, asked the school’s Wolf Block lawyers to research how best to dispose of the asset. The lawyers turned to Christie’s, in part because its president, Marc Porter, is a Philadelphia native and knew the painting.

 

“For the price range, we looked to other major ­masterpieces — Picasso, Klimt, Johns, de Kooning,” says Porter. “Even though no other Eakins had sold publicly for more than $5 million, we set the price much, much higher because of the nature of the piece.” (Eakins’s The Swimming Hole, which depicts the artist and his students taking a nude dip in the Main Line’s Mill Creek, was sold in 1990 for $10 million by one Fort Worth art museum to another, the Amon Carter Gallery.) Jefferson also hired former governor Dick Thornburgh’s D.C. law firm, Kirkpatrick & Lockhart, to evaluate the proposed sale from a legal and ethical standpoint. And this is where people get upset: “They could have offered it privately to the Museum or the Academy first,” says oncologist Luther Brady, a PMA trustee. “It really is very distressing how it was done.”

Barchi argues that as a nonprofit, the board couldn’t legally donate the painting to the Museum or the Academy, or even discount it, and that the trustees had a duty to maximize profit; also, he says Christie’s essentially advised him he would never get a deal done with either the Academy or the Museum. “They were certainly discussed as part of that group [of possible buyers],” Barchi says, but adds, “The advice we had from our experts was that the goals of the university would be best served by establishing a fair market price for the painting, and then giving an option to the local institutions.” In other words, they wouldn’t get anywhere near $68 million from the PMA and PAFA. “A private sale often unearths buyers who are willing to pay a premium,” adds Thornburgh. “Christie’s felt if the sale was disclosed, it might have a negative impact on the value.”

“Crystal Bridges was our first call,” confirms Porter, adding that a private sale is not a private auction — that is, they did not approach a pool of potential buyers. “Museums don’t like them,” Porter says of private auctions, in which potential buyers are asked to submit their highest bid. The Arkansan offer met Christie’s goal; Crystal Bridges then asked the National Gallery to partner with them on the deal.

On November 10th, Thornburgh came to Philadelphia and discussed the Christie’s-brokered deal with Jefferson’s trustees; later that day, the sale was announced. Matthew Kamens, Jefferson’s Wolf Block lawyer, called PAFA’s Don Caldwell and PMA’s Anne d’Harnoncourt to give them the news. If they were interested in keeping the painting in Philadelphia, they had until December 26th to make it happen.


It was at that point that Gross Clinic fever seemed to grip Philadelphia. Kicked off by the Rendell-Specter meeting, fund-raising — led by d’Harnoncourt and WHYY CEO Bill Marrazzo — went into high gear. Mayor Street announced he was looking into deeming the painting historically protected, which might have prevented the sale, at least for a while. It was touted as an emblematic (if not so well-known) Philadelphia treasure, the cause aided by the inherent glamour of the art world; city commerce director Stephanie Naidoff called the painting iconic, asking, “What if somebody wanted to sell the Liberty Bell?” At the Pennsylvania Society schmooze-a-thon at the Waldorf in New York in early December, Naidoff handed out to the moneyed crowd little cards printed up by the PMA with the top 10 reasons the painting should stay in Philadelphia. The support of Specter and Rendell, and the day-and-night efforts by the Museum, gave an imprimatur of importance that made donors want to be involved. The sheer momentum of the cause was unprecedented.

Meanwhile, the canvas itself moved across town. “We loaned the painting to the Philadelphia Museum of Art while they completed their fund-raising,” says Barchi, adding, “We didn’t have to do that.”

"SO MANY AMERICAN artists were trying to imitate European paintings,” says PAFA senior curator Lynn Marsden-Atlass of Eakins’s contemporaries in the late 19th century. “Eakins was truly an American painter.” Painted when Eakins was 31, The Gross Clinic is considered the Philadelphia artist’s best work because of its technical perfection, grandeur, and subject matter, which was shocking and unique at the time, as it is now, with its vivid, bloody portrayal of surgery being performed, theater-style, on a young boy’s thigh. Samuel Gross, then one of the most well-known surgeons in America, is posed in lordly fashion while his assistants labor on the almost disembodied leg below. “It documents an extraordinary, heroic figure in American medicine,” says Marsden-Atlass. She notes that the painting’s  realism, depiction of surgery, and technical accomplishment represented a great leap forward at the time, and that it is studied in every Art History 101 class.

Indeed, over the past 40 years, The Gross Clinic has had as many infatuated suitors as Adriana Lima, the pouty-lipped Sports Illustrated model who revealed not so long ago that she’s a virgin. Luther Brady, the PMA trustee, remembers a 1968 dinner at the old Sheraton hotel on JFK Boulevard: “Nixon was there. He announced that he was running for president that night,” recalls Brady. “Anyway, sitting with me was Dr. Herbut, the president of Jefferson, and Mrs. Bonnie Wintersteen, then president of the [Art] Museum.

“Dr. Herbut said that they had an offer from a group in Texas for The Gross Clinic,” says Brady. “Mrs. Wintersteen, in her inimitable way, stood up and said, ‘Dr. Herbut, you have no right to sell that painting!’” (One simply obeyed Mrs. Wintersteen, who lived in a Villanova house with the puzzling yet imposing name of Stoke Poges; her father had been president of the Museum before her, and her brother was Henry McIlhenny, the PMA curator, collector and party-thrower extraordinaire, known for his compound on Rittenhouse Square filled with works by Cézanne and Degas.)


It wasn’t the only overture for the painting. “We were at a small dinner party in 1980 in Philadelphia,” remembers Jeffrey Fuller, the art appraiser, “and we met someone who told me that 10 years prior, he had offered Jefferson $5 million for the painting, and they said no. In 1970,” he adds, “Impressionists and Old Masters weren’t selling for that. It’s always been the icon.” Then, in the late ’70s, a third party made a substantial bid: “I understand they made an offer for $27 million,” says Brady.

In December 2006, the same caste, if not exact cast, of elite Philadelphians was still intertwined with the fate of The Gross Clinic. At this point, the usual generous suspects had been tapped; before Christmas, it was clear to insiders that the painting would stay in Philly. The Annenberg Foundation had given $10 million; Gerry Lenfest, Joe Neubauer, and the Pew Charitable Trusts, $3 million each. Out of nowhere, Nicholas and Athena Karabots, a Fort Washington couple (who have interests in real estate and publishing, including crossword-puzzle books, and who own a huge farm off Skippack Pike), came in with a whopping $7 million. On December 21st, Mayor Street announced that the painting was staying in Philly. The Museum and PAFA agreed to take responsibility for $16 million each of the remaining $32 million needed. Wachovia would provide the loans to close the deal in January.

SO BY MID-March, there it was, hanging in Gallery 9 of PAFA, where Academy trustee Herb Riband was rapt as he looked at it. The lighting was still being tweaked, but the handsome central figure glowed.

“Dr. Gross,” enthused Riband, a retired Saul Ewing partner. “He’s the man. He looks a little bit like God, or Charlton Heston, I can’t figure out which.” Riband described how Eakins, an Academy instructor, was fired in the late 1800s for “tearing the loincloth” from a male model in a coed drawing class, and how the painter would arrange for cadavers to be delivered to PAFA’s classrooms for anatomy drawings. (You could get away with that kind of thing then.)

Ironically, PAFA has found itself the target of criticism for selling one of its own treasured assets to fund the purchase. “We actually took separate loans,” says PAFA’s Dominic Mercier of his organization and the Museum. PAFA’s loan is presumably already paid off since its sale of a fine but lesser-known Eakins work, The Cello Player, which is thought to have sold for $15 million to $18 million. The Inquirer tabloidishly called the sale PAFA’s “secret shame.” But to most people, it seemed a logical and responsible act, rather like real life.


Deaccessioning art is the last resort for any museum. “In the art world, it has always been frowned upon,” admitted Riband, who is serene and entirely free of defensiveness. “You make the best judgment you can.” Certain paintings that were donated with restrictions can’t legally be sold; it’s considered unethical for museums to sell works to fund everyday operations. Riband said several options were considered by the PAFA board of trustees when they realized there would be the need to help fund the purchase of Gross Clinic. “We preferred to deaccession a painting that we had bought, rather than a painting we had been given,” he said, adding that at one point the board considered selling a “basket” of 14 lesser paintings. But in the end, when The Cello Player was appraised, and a private offer entertained, it seemed less painful to make one surgical cut than to snip away at various parts of the collection. Riband says PAFA doesn’t know who now owns The Cello Player. “It hasn’t shown up on Mrs. Walton’s website for her museum, but who knows?” ventures Jeffrey Fuller. “She’s a buyer.”

For its part, the Museum has been silent about its plans, but trustees, perhaps feeling tapped out, say they hope it will follow PAFA’s lead. “My personal opinion is that if there’s an extraordinary and significant work available, and the only reasonable way of acquiring it is by disposing of another lesser work, preferably by the same artist, it should be done,” says trustee Jack Bershad. “I think the Academy is entirely correct.” Sheldon Bonovitz, the attorney and Museum trustee, adds, “For me, deaccessioning is the answer. Ideally, you’re trading up — you sell paintings that are of lesser importance, if it’s consistent with the donor’s intent. I would hope the Museum would do this.”

IN USUAL PHILADEPHIA fashion, criticism has dogged an event that turned out well for everyone involved. Some wondered whether other charitable organizations would find donors weary of spending, post Gross Clinic. Was buying this very expensive painting akin to a particularly wonderful spree at Saks, followed by a less wonderful bill in the mail?

For his part, Barchi is still polite, but aggrieved. “One of the things I’ve found so frustrating is that people have not been willing to listen to our rationale,” he says evenly. “We sold this painting to the National Gallery of Art and Crystal Bridges, not to Mrs. Walton. I wish people would stop accusing us of that.” Barchi did take pains to give the Philadelphia museums prior notice before selling the Rand portrait in April; Jefferson’s third Eakins painting is also likely to be sold.

In the meantime, mayoral candidates continue to make the purchase of the Eakins work a catch-all scapegoat of unnecessary spending: If we can pony up $68 million for this painting in 45 days, their reasoning goes, why can’t we find money to solve all of Philly’s other problems? Even Rendell says he’s annoyed that a painting has gotten so much ink. “Never has anything as relatively inconsequential received so much attention,” says the Governor. “There’s been 10 times as much coverage about The Gross Clinic than there has about our plan for health care for all Pennsylvanians.

”But which is sexier, the big-money sale of a great work of art — or health insurance? And it’s naive to think that rich people should, or will, solve every problem in Philadelphia, or that Annenberg and Lenfest will shortchange other causes because they donated to Gross Clinic. Rich people tend to spend money where it will make a difference, and the glitches in so many Philly institutions aren’t only about money, but rather those institutions’ inherent goofiness and poor administration. It’s unlikely that the Pew Charitable Trusts are suddenly going to decide to fund, say, fixing up our airport.

Rich people might be criticized for spending their money on art, but we can’t accuse ours of skimping on things like hospitals and schools. As you leave Jefferson’s Alumni Hall, in fact, you pass the new Jefferson building going up at 11th and Locust streets: the Dorrance Hamilton medical center. The Campbell’s Soup heiress gave $25 million for it.

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