reputation-laundering through the art market in Europe

greenwashing/brownwashing of misconduct

There is already concern about greenwashing or brownwashing of repressive regimes and other exploitative systems through collaboration of cultural institutions with governments and corporations. Within the cultural sector, there is particular concern about complicity in potentially unethical or illegal environmentally-destructive activities and/or socially-violent activities that displace or otherwise mistreat indigenous and other resident communities. And efforts at greenwashing/brownwashing persist around processes of global governance.

interference in, and subversion of, politics and academia

Furthermore, there is increasing concern about Russian funding of mainstream politics in the United Kingdom and far-right-wing politics across Europe; Russian influence in the Brexit debate; and the suppression of a report on Russian state interference in British political life, until after a general election that it may influence, due to “’embarrassing’ revelations” about that funding.

Reported details indicate funding of the Conservative party by Russian oligarchs and other politically-exposed persons (PEPs), plus connections between British political operators and other problematic figures, such as PEPs who are associated with Russian intelligence services. Evidently, Russia has managed to form ‘a network of friendly British diplomats, lawyers, parliamentarians and other influencers from across the political spectrum‘.

Likewise, there is concern about interference in the life and work of academics in the UK and abroad by repressive regimes such as China, as well as about influence on research and reputation-laundering in the UK and abroad through longstanding and increasing funding from and collaboration with the Gulf states, especially Saudi Arabia and the United Arab Emirates (UAE).

improvement of status through investment in cultural activities

Even when everything is legal, improvement of status through investment in cultural activities is a concern. After all, the increasing of influence through investment in public causes is a historic practice. In the nineteenth century, Andrew Barclay Walker was the benefactor who founded the Walker Art Gallery in Liverpool, UK, then became a knight of the realm.

Recently, a billionaire, who has been ‘link[ed] to… Russia and controversy in his business’, has had his name physically attached to an extension to the Tate Modern gallery and a hall of the Victoria and Albert Museum as well as a school of government at the University of Oxford, in return for his donations.

Donors to the governing party and other associates of political parties in the UK have been appointed to positions of influence. For instance, Conservative party donors were appointed as (some of the) trustees of the National Gallery, which then privatised certain services (though shoestring budgets, austerity and somewhat neofeudalist economics are more general problems in the management of galleries, libraries, archives and museums).

Beyond any anxiety about everyday corruption – such as bribery in Lithuania, wrangling over assets in Russia, embezzlement of funds and raw materials in Russia and nepotistic exceptions in heritage management in Russia – to which all activities may be subjected, there is a fear of the ‘stealth politicisation’ of public culture and its consequences in cultural economics.

reputation-laundering through the art market in Europe

Since soft power may be established and exerted through cultural activity, it is important to consider the possibility of the laundering of reputation through participation in the art market (and the risk for cultural workers to be complicit in the laundering of reputation through the conduct of their research/teaching and/or their cooperation with the art market).

As reported by Finance Uncovered, in the UK, Halcyon Art Gallery ‘boasts of [demonstrably] close ties to the Royal Family and the Conservative Party’. Indeed, the co-treasurer of the Tory party, Ehud Sheleg (who is also known as Udi Sheleg), who donates to and raises funds for the governing party, is the director of Halcyon Art Gallery in the UK.

Ehud Sheleg’s brother, Ran Sheleg, is a co-beneficiary of the family trust that part-owns the Halcyon Art Gallery and a director of Halcyon Art International in Hong Kong, while both brothers are directors of Halcyon Gallery Shanghai in China. Ran Sheleg was also an operator in a binary options trading business, within an industry that was later prohibited in the UK (as part of the EU) and in Israel, after it was exposed to be riddled with fraud and to have ‘significantly’ strengthened organised crime in Israel. As observed by Finance Uncovered, there is no suggestion of wrongdoing by either brother.

Transparency International noted that Halcyon Gallery Cyprus was opened by Dmitry Tsvetkov, who is related to a politician in Russia and is ‘alleged to have benefitted from Russian state funds’, and Rustem Magdeev, who is alleged to be associated with organised criminals. Tsvetkov and Magdeev allegedly handled ‘tens of millions of pounds’ of jewellery through another shared enterprise in Cyprus, Graff Diamonds.

Halcyon Gallery Cyprus in Limassol was a franchise of Halcyon Art Gallery in London, while Graff Diamonds in Cyprus was a franchise of Graff in the UK. According to Transparency International, both Graff and Halcyon have severed ties with their former franchisees.

reputation-laundering and money-laundering in Russia and the United States

It has been suggested (in a source that I cannot find at the moment) that, if you are trying to identify organised criminals in Russia and Ukraine, a good starting point is a list of donors to museums and galleries. Artnet News has observed that ‘Russian oligarchs… who have minted their fortunes in natural resources… and other industries [that are] connected to the Russian state often have substantial ties to the art world‘.

In the files of the Russian Mafia information warehouse, which covers associated problems as well as specific cases of organised crime, there are numerous intriguing cases, which suggest the improvement of status, laundering of reputation or other influence through investment in arts and culture, plus investment of questionable funds into cultural assets.

(The information warehouse naturally publishes interesting information that is incidental to the subject of the report, so it does not necessarily relate to the subject.)

However, it can be difficult or impossible to distinguish law enforcement from malicious prosecution, as well as to distinguish professional journalism from the influencing of private negotiations through public representations of negotiating parties, or even to distinguish avoidance of lawsuits from insinuation without evidence.

Nonetheless, it is important to recognise the existence of questions and risks. Highlighting the potential intersection of reputation-laundering and money-laundering, the editors of Russian Mafia relay:

The leaders of the Russian mafia have found a way to legalize the criminal money in the USA. After the government took control of financial transactions – bank transactions, etc., the Russian mafia has decided to use the opportunities in the market of contemporary art, which is not controllable [or which is not subject to control – the English-language edition is a stable copy of a machine-translation]. As a result, several agents of the Russian mafia appeared in the U.S., who began to organize exhibitions of contemporary Russian artists and trade it afterwards.

[Главари русской мафии нашли способ легализации криминальных денег в США. После того как правительство взяло под контроль финансовые операции – банковские транзакции и прочее, русская мафия решила использовать возможности рынка современного искусства, который не поддается контролю. В результате в США появилось несколько агентов русской мафии, которые начали организовывать выставки современных русских художников России и затем торговать ими.]’

note

Although the searches were limited in range and effectiveness, after I found the reports by Transparency International and Finance Uncovered, I checked potentially relevant results among the first fifty for “corruption” “gallery” “Conservative party” -“image gallery” -“photo gallery” -“photos gallery” -“press gallery” -“public gallery”; “corruption” “gallery” “Labour party” -“image gallery” -“photo gallery” -“photos gallery” -“press gallery” -“public gallery”; “corruption” “museum” “Conservative party” -“image gallery” -“photo gallery” -“photos gallery” -“press gallery” -“public gallery”; and “corruption” “museum” “Labour party” -“image gallery” -“photo gallery” -“photos gallery” -“press gallery” -“public gallery”. Then, I searched the archives of Russian Mafia for museum, gallery and heritage.

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