Toronto Globe and Mail Newspaper, Wednesday, 10 March 2004

Gallery faces closure over bronzes

MacLaren in dispute over title to 510 Rodin sculptures in multimillion-dollar deal

By JAMES ADAMS

A multimillion-dollar deal to bring hundreds of bronze sculptures attributed to the French master Auguste Rodin to a small Ontario art gallery has collapsed, with the result that the gallery may be forced to close its doors as early as next month.

The MacLaren Art Centre in Barrie, Ont., a city of about 120,000 people, 90 kilometres north of Toronto, was expecting to take possession last year of 510 Rodin bronzes, purportedly worth more than $135-million, from an Italian-based art company, Gruppo Mondiale. 

Some of these bronzes would then have been sold to collectors and institutions, with Gruppo and the MacLaren sharing in the proceeds; others would have stayed in Barrie as a linchpin to something called ArtCity, an ambitious project, first conceived in the mid-eighties, to place sculpture by Canadian and international artists in and around Barrie, thereby turning the locale into a tourist destination the equal of Stratford and Niagara-on-the-Lake.

While the MacLaren claims to have clear title to the bronzes, all supposedly cast from 1999 onwards, it has yet to see the 10 editions made from each of the 51 Rodins, including such classics as Eternal Spring and The Age of Bronze. Negotiations between the MacLaren and Gruppo Mondiale to get the bronzes to Barrie have been ongoing for more than two years, but reached an impasse recently. 

Indeed, there are concerns if all 510 bronzes actually exist as bronzing experts say it takes anywhere from 3½ months to six months to make one finished, professionally acceptable bronze, depending on the size and complexity of the object being cast.

In the meantime, the MacLaren says its reputation has been "tarnished" in the last five months by reports in the Barrie media and from a local alderman questioning how it -- an institution less than 20 years old with an operating budget last year of just over $3.3-million and visitors numbering no more than 65,000 -- obtained title to bronzes by Rodin (1840-1917), one of the most famous sculptors in Western art. The MacLaren has held off defending itself from the innuendo until now because, in the words of board chair Rodney Burns, "we didn't want to jeopardize our negotiations with Gruppo."

Now that those negotiations have ended acrimoniously and legalaction may be a possibility, the MacLaren wants "to clear our name among our stakeholders," beginning this week, and start to raise funds again since at least 80 per cent of its annual budget has come from donations of various kinds, rather than government grants.

It's not the first time the MacLaren has courted controversy with sculptures attributed by Rodin. In 2001, it took possession of more than 35 Rodin plasters from Gruppo Mondiale, and another 17 plasters in 2002 from a London-based intermediary of Gruppo Mondiale. The majority of the 2001 plasters, along with several bronzes, were shown at a controversial exhibition at the Royal Ontario Museum in Toronto in fall, 2001, an exhibition whose authenticity was hotly contested by the Musée Rodin in Paris, the legal heir to the sculptor's legacy.

The MacLaren has been under renewed stress in recent weeks. In late January it accepted the resignation of its veteran director, William Moore, one of the main architects of the Rodin deal. More recently, it's laid off five permanent staff; reduced its hours of public operation to five days from six; reported a deficit for calendar year 2003 of $1-million; and failed, for the first time in three years, to make a payment to the city of Barrie on the $2.7-million left on a $4.1-million promissory note the city provided for a building project completed in late 2001.

The MacLaren is hoping it can assemble some sort of rescue package in the next few weeks. Without it, the gallery could shut it doors by mid-April, according to Hanne Fynbo, the gallery's acting director.

The innuendo now swirling around the MacLaren has centred on a complex series of financial transactions conducted a couple of years ago, involving organizations and individuals in Canada, the United States, Italy, Great Britain and Lichtenstein -- all ostensibly designed to get Barrie its Rodins while offering as many as 5,000 Canadian investors breaks on their income tax.

Part of the transactions story was brought to light last year by David Aspden, a former Barrie police officer who is now a Barrie alderman for the ward in which the MacLaren is located, as well as chair of the city's police services board and its director of culture and recreation funding. (The MacLaren currently receives about $53,000 yearly, or about 1.5 per cent of its budget, as a civic grant.) What intrigued Aspden were the 2001 and 2002 tax statements filed by the Toronto-based Ideas Canada Foundation, a non-profit private charity established in 2000 to provide grants to "qualified donees such as universities, art galleries, performing arts centres, museums, etc." In those years, Ideas reported to Canada Customs and Revenue that it made "gifts" totalling more than $140-million to the MacLaren. Indeed, for 2002, of the almost $75.8-million Ideas "gifted" to five cultural organizations, the MacLaren is credited with receiving 99 per cent of that total. (The Toronto Symphony, by contrast, received $20,000; the Vancouver Art Gallery $10,000). The MacLaren acknowledges that the money was directed largely for the purpose of buying the Rodin bronzes from Gruppo Mondiale, but this week its chairman Burns claimed that "those millions have never been in a MacLaren bank account." In fact, "the funds have gone to art dealers, manufacturers, lawyers and accountants, not us. And that always was the intention."

According to informed sources, Ideas Canada drew $141.8-million (and placed in a Toronto law firm's escrow account) from a pool of about $162-million supplied by Nova Scotia's Berkshires Funding Initiatives Ltd. Twenty per cent of this pool -- approximately $32.4 million -- was provided in cash by several thousand investors seeking relief on their income tax by making donations to a registered charity. The remaining 80 per cent -- roughly $129.6-million -- came from these same investors, but through a 25-year, non-interest bearing loan from Talisker Funding Ltd. Of the $162-million pool, Berkshires kept a 12 per cent commission of about $19.4-million.

The $141.8-million in Canadian funds were subsequently converted to $109-million (U.S.) and given to an art dealer in Britain, Jerry Jennings Art Consultants. (Jennings is a former Torontonian who managed Gallery Moos in the city and was a senior associate with Ritchie's Auctioneers and Appraisers). In late 2000, the U.K. art dealer forwarded the $109-million to a U.S. dealer, Joan Krawczyk Fine Arts Inc. of New York, who bought the 510 bronzes from Gruppo Mondiale for $6-million (U.S.). Titles for the bronzes were then given to the U.K. dealer who, in turn, sent the titles to the MacLaren. 

MacLaren officials say they have fulfilled their parts of the deal, and want the bronzes. Gruppo Mondiale, however, argues that the deal is not completed; in fact, in a letter sent to the MacLaren last week, Gruppo Mondiale's principal Jon Gary Snell says his firm was to be "remunerated tens of millions of dollars." Snell's litigation lawyer, Thomas Curry of Toronto, said yesterday that "no one's complied with what they've promised . . . The elements of the transaction that Gruppo entered into and that the MacLaren had with different parties are all up for grabs."

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