Too Close for Comfort

Mar 12 2001

For decades, Christie's and Sotheby's have cultivated the notion that the two houses were locked in bitter rivalry. Even though many insiders viewed the idea skeptically, the art world was stunned last year when Christie's confirmed that it had revealed to federal officials how it had been fixing commissions with its supposed competitor.

The penalties were harsh. Sotheby's was ordered to pay $256 million to former customers plus $45 million in federal fines after admitting to violating antitrust laws. CEO Diana Brooks resigned and pleaded guilty to charges of collusion; sentencing is scheduled for May. The Feds gave Christie's immunity in exchange for its cooperation - but also directed it to pay $256 million to former customers. The reputations of both houses took a blow in the auction community.

"Crooked as a ram's horn" declares Tom Hoving, former director of the Metropolitan Museum of Art in New York. "People look upon both auction houses as doubly suspicious. Even estates are thinking of another way to go."

Christie's declines to comment on any impact the debacle has had on business, while Sotheby's denies losing clients because of the scandal. "I know that we've gotten negative press," says Leila Dunbar, director of collectibles at Sotheby's. "But I haven't lost a deal because of it."

Perhaps the troubles will amount to no more than a bump in the road. "We're forced to work with Sotheby's and Christie's despite what some people at the auction houses have done," says Christopher Porte, a fine-arts dealer who in February attended a Christie's auction of Franklin Roosevelt's papers, furniture and paintings. Porte says he goes where the antiques are: "It's just business as usual."

Others were less sure. "If I came into a million bucks now I would be inclined to look elsewhere [to spend it]," says Kevin Beattie, of Brooklyn, who went to the Roosevelt auction mainly to gawk.

What's clear is that a measure of trust has been broken between the houses and their customers. What's uncertain is whether Christie's and Sotheby's can repair the rift even as they face new rivals.