Chasing Aphrodite (7 page)

Then, in June, Houghton learned something that convinced him he had to act.

T
HE KIMBELL ART
Museum in Fort Worth, Texas, was exhibiting the collection of Nelson Bunker Hunt, one of the most impressive private antiquities collections built since World War II. Nearly all of it had recently come out of Italy and passed through the hands of Robert Hecht and Bruce McNall. The dealers hosted a splashy evening reception at the Texas museum. Many of the leading figures in the antiquities trade were there for the show, including Frel and Houghton, who had both contributed essays to the exhibition catalogue.

During the reception, a contact in the trade pulled Houghton aside and whispered a warning in his ear: the IRS was likely to be investigating Frel for tax fraud. The agency was looking at a collection of ancient amber jewelry that Gordon McLendon had donated to the Getty. The IRS had determined that the amber was worth $1.5 million at most, not the $20 million plus that McLendon had claimed on his tax return. When the feds threatened McLendon with a charge of conspiracy to commit fraud, he agreed to pay $2.1 million in back taxes. He was now threatening to tell the IRS everything if McNall didn't reimburse him for the settlement.

"Don't worry," McNall said when Houghton approached him at the show. "Frel hasn't been implicated yet. I'll talk to him tonight and sort things out."

When Houghton ran into Frel later, he asked whether he had spoken to McNall.

"Don't worry about that, Arthur. It's an issue that concerns McNall and McLendon, not us."

Houghton was agitated. Hadn't Frel seen the recent article in the
Los Angeles Times
about the IRS investigating museums for accepting fraudulent appraisals of gemstones?

"Arthur," Frel said dismissively, "we don't collect gemstones."

T
HE NEXT DAY,
Houghton flew to New York and had lunch with his personal attorney. The assistant curator laid out in detail what he'd learned about Frel—a list of criminal activities ranging from forgery and tax fraud to bribery and embezzlement. He asked his attorney to write a legal opinion, based on a "hypothetical curator's activities," that Houghton could use to convince Frel how serious the matter was.

At the end of June, with his legal memo in hand, Houghton asked to talk with Frel privately. The two took a long stroll around the Getty's colonnade bordering the reflecting pool. As they walked, they passed bronze replicas of the statues found at the Villa dei Papiri.

"When I'd talked to you about my concerns about the donations in the past, I was ignorant of the law," Houghton began. "I've asked an attorney to tell me what laws a curator might be breaking by doing these things. It's called conspiracy to commit tax fraud."

The "hypothetical curator" would expose not just himself but the entire institution to a range of criminal and civil liability under the U.S. tax code. Houghton's legal memo concluded by highlighting the irony of Frel's actions:

I cannot think of any reason for anyone to engage in the kind of behavior in this hypothetical example, especially if the museum in question was a nationally recognized, well-endowed institution which had no compelling reason or excuse for engaging in such activities. I would not be alone in viewing this sort of deliberate tax fraud as no better than outright theft from the Government.

The blunt memo did not have the desired effect. "Honestly, Arthur, I had hoped to bring you in more," Frel said. "I see that's not going to be possible. I'll have to reveal less of myself to you."

The next day, Frel learned that several other Getty donors had had their appraisals questioned by the IRS, including Alan Salke, president of McNall's movie production company; entertainment attorney Ken Ziffren and his partner, Skip Brittenham; Stanley Silverman, a doctor in Huntington Beach; and Lowell and Michael Milken.

Frel informed Houghton, adding that he had taken home the last of the blank appraisal forms and burned them when he learned the news. Frel vowed that there would be no more donations, aside from the five or so that were still coming in. Frel also said that he had spoken to an attorney friend, who had advised him against discussing the issue with anyone else at the Getty.

Houghton believed that Frel was trying to limit the circle of people who knew about the donation scam. For the first time, Houghton began to wonder if he might be in physical danger. He was, after all, threatening Frel's entire way of life: his position, his income, his reputation. If Houghton was the only one who knew, would Frel be tempted to try to silence him? Houghton imagined himself driving along the Pacific Coast Highway to work one day and suddenly finding that his car had no brakes. Would Frel do such a thing? His best protection, Houghton thought, was to increase the number of people in the loop. He urged Frel to consider talking to Harold Williams. The antiquities curator said that he would consider it once the IRS cases were settled. But he wasn't exactly contrite.

"You have no idea what goes on in other museums, Arthur. They accept total junk, and the donor takes twenty times the value in his tax write-off. It's the normal practice."

Houghton decided that it was time to go over Frel's head.

A
T THE GETTY'S
annual Fourth of July party, held at a park not far from the museum, Houghton was introduced to John Walsh, Williams's choice to be the new director of the Getty Museum. Walsh was an expert in Dutch paintings and a rising star in the art world. He had worked at the Met under Thomas Hoving and gone on to become a respected paintings curator at the Museum of Fine Arts in Boston. Tall, sandy-haired, and bespectacled, Walsh was making an effort to be friendly. "I hear things are going great guns in the department," he said to Houghton. "Let's have lunch."

Walsh wouldn't officially start his job for several months, but he was at the Getty often. They chose a lunch date for early August, just as things appeared to be at a breaking point. After they were seated in a Santa Monica restaurant, Houghton didn't waste a moment. "I'd like to tell you what's happening in the department, but I will have to offer my resignation first," he said. "I don't wish to be seen as profiting from what I'm about to tell you."

Walsh was dumbstruck. "What are you talking about, resignation? What is it you have to tell me?"

Houghton carefully detailed how he'd uncovered Frel's activities in recent months. He left nothing out. The situation he was describing was, in his mind, massive, important, and ghastly. Walsh seemed appropriately appalled. He offered to confront Frel immediately. Houghton said he thought that wouldn't be necessary; he would continue to push Frel to come clean. It would be better if it were Frel's own decision.

Walsh was going on vacation for three weeks but promised to follow up with Williams when he was back at the museum. "I suspect this will blow over," he said.

T
HREE MONTHS LATER,
Houghton had still not heard back from Walsh about the Frel matter. He found the museum's new director reserved and difficult to read. Hought on had expected to be confronted about his accusations, asked for proof, raked over the coals. But nothing. Meanwhile, the problems had not blown over. Far from it. Donations were still coming in, and for some objects Frel didn't even bother with the formality of finding a "donor."

As Houghton was driving Frel to the airport one day, Frel opened his carry-on bag and took out a small marble Egyptian head. His wife, Faya, had brought it back from Switzerland, Frel explained.

"I hope she declared it at customs, " Houghton said.

"No, she carried it in her handbag." Frel chuckled. "They never noticed ... I'd like you to propose it to the board next week while I'm away. Tell them it comes from the Vanderbilt collection." Frel said that the dealer wanted $80,000 for it, "though it's worth more than that."

Houghton was appalled. Having Faya smuggle the piece into the country had been cavalier and unnecessary. Frel's claim about it coming from the "Vanderbilt collection" was laughable. And $80,000 seemed far more than the piece was worth. Frel was asking Houghton to put his signature on it.

A week later, Houghton had a meeting with Walsh to prepare for the upcoming meeting of the board's acquisition committee, when each department would present objects or paintings it hoped to acquire. As the men clicked through slides of various proposed antiquities, the Egyptian head flashed up on the screen.

"Stop there for a moment, John," Houghton said. He could no longer wait for Walsh to bring up the Frel matter.

"What is it?" Walsh asked.

"You need to know about this head. Jiri's wife smuggled it into the country in her handbag. You'll be putting your signature on it when I present it to the board. It's illustrative of the problems with Frel that I told you about, which have still not been resolved."

That got Walsh's attention. The next day, the two met for more than three hours, during which Houghton brought Walsh up to date on Jiri's most recent transgressions. Walsh said that he was thinking about a deal he could make with Frel to stop what he called the curator's "fiddling."

The two decided to meet again the following day with Frel's other deputies, Marion True and Marit Jentoft-Nilsen. The two assistant curators had been at each other's throats for months. True was new and a rising star, while Jentoft-Nilsen had been in the department for years and felt she was due some respect. She complained bitterly about the special treatment True received, penning a series of poison poems referring to True as the "lemon-squeezer" and a "self-seeking snake." But with Frel now under investigation by the new museum director, the two acted as a team, offering to fill out the picture that Houghton had painted.

At a confidential meeting held in Walsh's living room, the women confirmed many of Houghton's allegations. Jentoft-Nilsen added that Frel had forged dealer invoices to support the inflated prices of objects submitted to the board. Houghton said that although he had no hard proof of Frel taking bribes, there was talk of him getting cash from McNall.

In a private moment with Walsh, True later confided what she felt was Frel's true motive for the donation scheme: to build the study collection and disguise the provenance of recently excavated objects, not line his own pockets. The question of his personal gain, she said, should be left out of the Getty's investigation.

Walsh and True both knew that the Getty's antiquities collection had the best chance of setting the museum apart as one of the country's best cultural institutions. But to reach that goal, the Getty had to fill some big holes in its collection. In particular, the collection needed to find several major statues from the archaic and classical periods—objects that had rarely come onto the market in recent decades. For all Frel's flaws, True and Walsh knew that he was a master at locating first-class antiquities on the market.

Walsh wondered aloud whether Frel might be relieved of his curatorial duties but kept on to look for great antiquities. True thought that would be a good solution. But it would need to be approved by Williams, the Getty's CEO.

B
Y LATE
1983, word of Frel's donation scheme and the IRS investigation had percolated up to Williams. The news came at a particularly tricky time for the chief executive. He had begun having a relationship with his deputy Nancy Englander as they traveled the world together defining the Getty's mission. Williams, married with two children, had subsequently promoted Englander to director for planning and analysis, and she informally acted as his principal adviser. They were inseparable.

Their affair was hard not to notice around the Getty. Staff members spotted them walking hand in hand in a nearby oceanfront park. Board members looked the other way, but their relationship became too obvious to ignore. Some board members were urging Williams to choose between Englander and his job.

The affair compounded existing tensions between Williams and the Getty board over the fate of Getty Oil. The museum controlled an 11 percent interest in Getty Oil, enough to give it the swing vote in a nasty dispute between company executives and Getty's son Gordon, Getty Oil's largest single shareholder. Harold Berg, a Getty Oil executive and chairman of the Getty Trust, wanted to keep Getty Oil intact. Gordon, a trust board member, was despairing over Getty Oil's low stock price and wanted to sell the company. Williams was firmly in the middle of the fight. The former SEC chief believed that it was folly to have the museum's assets tied up in a single stock. But dumping the museum's shares on the market would be a self-defeating exercise, driving the price even lower. He favored selling the company to a rival that would pay a high price, and he took Gordon's side in opposition to Berg, his nominal boss. Now, as Pennzoil and Texaco circled for a possible takeover, word of an IRS investigation of Frel and the trust could queer the deal.

Williams saw that the probl ems with Frel would not blow over. The Getty needed to investigate.

A day after a particularly contentious board meeting, Williams and Walsh called Frel into Williams's office. They confronted him with the allegations of phony appraisals and tax fraud and told him that an outside attorney would be asked to look into the latter. Walsh asked Frel to make a list of all the objects that had been donated, along with the price paid for each and the names of the supplier, donor, and appraiser. Meanwhile, Williams asked Bruce Bevan, an attorney with J. Paul Getty's old law firm, Musick, Peeler, to direct the internal probe.

Bevan's investigation yielded a lengthy and disturbing report. Frel admitted to forging fifteen to twenty-five appraisals per year over five years, letting donors suggest the amount of the write-offs they desired. Alan Salke, for example, had taken a $300,000 write-off for a vase worth perhaps $50,000. Met antiquities curator Dietrich von Bothmer told Bevan that he had reviewed some of the Getty donations as an expert for the IRS and had found that some were, "even to a semi-educated eye, grossly, excessively overstated."

Frel also had falsified museum records and had repeatedly and deliberately violated the Getty's policy prohibiting the acceptance of donations from dealers. In Bevan's interview with True, she told him that she had seen Frel ask his secretary to forge not only appraisals but also bills of sale from various dealers at prices of his choosing. Bevan concluded that this was likely "an illegal, excessive tax benefit." Indeed, Frel's desk contained a veritable forger's workshop, with copies of blank letterhead from nearly a dozen dealers and museums around the world. Frel's explanation of this—that it was to expedite the transactions—was silly.