My Worst Nightmare

By Jona Marshall

I consider myself a law-abiding citizen. Imagine my surprise when, at 6:30 a.m. on Jan. 24, I heard a loud knock on the door at my home. In my bathrobe, coffee in hand, I opened the door. There stood three officials from the FBI, IRS and Immigration and Customs Enforcement Office. I was so surprised by the sight that I wondered if it was real. Twice I asked to see their badges.

The agents had a search warrant alleging that my museum—the Pacific Asia Museum (PAM) in Pasadena, Calif.—had accepted donations of looted artwork. It was part of a larger investigation of several Southern California institutions, also including the Los Angeles County Museum of Art, the Bowers Museum in Santa Ana and the Mingei Museum in San Diego—an investigation that questioned the museums’ professional integrity and business practices. So began my unexpected journey into the new territory of crisis management.

In today’s climate of public distrust, corporations or politicians under investigation for wrongdoing have become commonplace—but not museums. PAM holds its collections in the public trust and operates for the public good, as should all museums. The reputation of my staff and board for honesty, integrity and transparency is at the heart of our relationship with individual donors, foundations and government agencies.

Following the meeting at my home, during which the federal authorities questioned me about the museum’s collecting policies and about certain individuals involved with the case, they asked me to follow them to the museum. When I arrived at 8 a.m., an additional 20 to 30 agents were blocking the entrance. I explained to confused staff members who were waiting outside that a warrant had been issued. I sent most of them home, while a few collections staff stayed with me to facilitate the agents’ search of the building. The museum was in a complete state of lockdown and, while the agents were cordial, we were not allowed to move around without an escort.

What I failed to realize in this chaos was that the press had arrived and were with us on the sidewalk, taking notes and carefully listening to my conversations, which I would later read about in the newspaper. I did not realize at this early stage how important it was to be aware of my behavior, the message I was conveying and who was listening.

The extent of my knowledge about the case was what I had read in the search warrant that morning: a series of allegations involving an undercover National Park Service agent, posing as a collector, who had tapes of meetings and telephone conversations and copies of e-mail correspondence with art dealers and staff of the museums under investigation. I did not know the content of those conversations. The allegations spanned a ten-year period. Of the PAM staff mentioned in the warrant, several no longer worked at the museum.

I never imagined the museum would be caught in a legal tangle about issues I thought were affecting only a handful of high-profile institutions. PAM has a staff of 25 and an operating budget of $2.2 million. While the museum has an extensive collection of 14,000 objects from throughout Asia and the Pacific Islands, most of our acquisitions are made through donation, not purchase. I kept thinking the investigation must be a mistake. The donations in question were for the most part small objects valued at less than $5,000. Surely, I thought, the federal authorities would be looking for a larger, more substantial target or operations involving multimillion-dollar artwork.

As we found out, one of the main issues at hand was tax fraud. According to the warrants, suspected smugglers had sold illegal antiquities to local clients. These clients then donated the objects to the museums in question, inflating their value by as much as 400 percent to receive a tax write-off. Even with the inflation, though, many of the objects were valued at just under $5,000. The IRS requires additional documentation on donated objects worth $5,000 or more.

By the time I entered the museum that morning, every office and space had been tagged and was systematically being searched, including desk drawers and file cabinets. All computer files were copied, and certain hard copies of collections records were packed up. I was not allowed to answer the phone, make calls or use my computer. The staff and I were more than willing to cooperate; we had nothing to hide. However, having no legal training—I was previously director of development at the Autry National Center in Los Angeles—I did not fully understand the museum’s right to counsel during the search or even during the earlier interview at my home. It would have been helpful to have legal advice at the earliest moment to help assess the situation and the issues involved.

On my way to the museum, I had called our board chair, Bruce Blomstrom, to brief him on the events; he then contacted an attorney. By the end of the day, we were advised to request copies of all the print documents that the authorities were taking away. This was good advice but unfortunately too late: The documents had already been moved off-site. Now we were in the awkward position of not being able to review those records as part of our own internal investigation. As of this writing, we have requested and are still waiting for copies of the records.

To maintain client-attorney privilege, we were advised not to talk with staff about the case without the museum’s lawyer present—a difficult but necessary directive. Staff interviews did not occur until we retained a law firm several days later. But even then, those named in the warrant did not have to answer questions from the museum. In fact, several were advised by their own counsel not to respond to questions and instead submitted written statements to the museum. It was difficult to get a clear picture of the situation and what events had taken place. As a result, it was hard to create a message for staff, donors and the press.

Issues of cultural patrimony are complex, but I had no idea how complex until this moment. These were issues I had not fully considered because of our limited acquisitions budget. Since then I have been immersed in a crash course. I started by calling colleagues at other museums, including the Getty, contacting AAM and doing my own research on the Internet.

The best overview of the issue I found is in an article entitled "How Much Provenance Is Enough? Post-Schultz Guidelines for Art Museum Acquisitions of Archaeological Materials and Ancient Art" by Ildiko P. DeAngelis. It summarizes a 2003 landmark case, U.S. v. Schultz. Frederick Schultz was a New York dealer who knowingly purchased smuggled Egyptian antiquities from a British restorer. He was indicted and found guilty of receiving stolen property under the federal National Stolen Properties Act (NSPA). Schultz argued that he did not know he had engaged in theft under U.S. law or that the Egyptian government’s claims would be recognized in the United States. However, the only requirement to substantiate criminal conduct under the NSPA is knowledge by a defendant that the objects were stolen.

The case shows that collectors and museum officials cannot claim ignorance of foreign laws as an excuse. As DeAngelis explains, "If Schultz was aware of the high probability that the objects were the property of the Egyptian government and did not in fact believe otherwise, then he can be found to have ‘known’ that the objects were stolen." The burden rests with acquiring museums to maintain knowledge of foreign patrimony laws and to make reasonable "good faith" efforts to determine an object’s history, provenance and chain of title. What constitutes a good faith effort is worth discussing with your attorney.

Of course, this leaves museums with the formidable task of keeping up with literally hundreds of different foreign patrimony laws, depending on the breadth of their collections. Each country is governed by its own statutes. For instance, India has no central law governing antiquities.

After U.S. v. Schultz, the American Association of Museum Directors (AAMD) published its Guidelines on Acquisition of Archaeological Material and Ancient Art in 2004. AAM’s Accreditation Commission issued a statement on Acquisition, Documentation, and Disclosure of Sensitive Cultural Property in Accredited Museums in 2006, and that year U.S. Customs and Border Protection revised its overview of import requirements, entitled What Every Member of the Trade Community Should Know About: Works of Art, Collector’s Pieces, Antiques and Other Cultural Property.

The material identified in PAM’s search warrant was from a prehistoric site near the village of Ban Chiang, Thailand. The material was first discovered in 1957, but formal excavations of the site did not begin until 1967. In the meantime, Thailand passed a 1961 law stating that all Thai antiquities that are buried, concealed or abandoned are state property and require an export license to leave the country. As of 2006, Thailand had issued no such permits.

Many of the Ban Chiang objects in question had been gifted to PAM over many years by a couple that is well known in Los Angeles and had been members of the museum for more than a decade. There is a tendency when dealing with longtime associates to trust that the information they present to you is true and accurate. This is where the enforcement of policies and procedures for evaluations becomes critical, because they are by nature designed to be neutral. Ban Chiang material found outside of Thailand is illegal, and it was the museum’s obligation to know the foreign laws governing the export of antiquities related to its collection.

I was initially opposed to the idea of hiring a public relations firm—at $300 an hour, how could we afford it? After some discussion with trustees, however, I came to consider it insurance against the unknown and a small price to pay to contain a potentially devastating story. We chose Read Communications, a firm that had represented a number of nonprofits in the area, had crisis experience and knew the local press and the community. In a two-hour brainstorming session with the principal of the firm, Nat Read, and several trustees, we decided to take control of the message and fill the information vacuum.

To provide consistency, I was designated the sole spokesperson for the museum. The board chair immediately contacted the other trustees to advise them they would invariably be contacted by the media for comments—and they were—but that they should refer all questions to me. While I had no previous experience in this area, I was willing to take on the role.

We were committed to minimizing collateral damage to the museum’s image and reputation by presenting the issue succinctly and as narrowly as possible. The museum had a policy governing the acceptance of collections donations. If the allegations were true, they were in conflict with our own procedures and standards of operations. This was an issue not about the entire museum but about our collections policy and its implementation.

We also wanted to define the issue to our advantage by placing it in a broader context of other leading institutions, so that PAM was not seen as an isolated case. Issues of cultural patrimony are issues of international concern, affecting museums everywhere. The Getty Museum, the Metropolitan Museum of Art and the Museum of Fine Arts, Boston, had each recently been in the news for similar reasons.

Our public relations firm advised us to communicate the concrete steps we were taking to address the situation—to convey that we were fully cooperating with officials and had launched our own task force, made up of board members, to investigate. We agreed to make the results of the investigation available to the public. In the interim, the museum announced that it was suspending the acceptance of all collections donations until the task force’s investigation was complete.

The events of the morning of the federal raid were reported on the radio almost as they happened (the warrant had been filed with the court the day before). The following day, a Friday, articles appeared in the Los Angeles Times and other regional papers. By the weekend, the story was reported in the New York Times and the Washington Post. The board chair and I met with staff that Friday to bring them up to date on what we knew and the steps we were taking. Staff expressed a great deal of concern and uncertainty. We didn’t have answers for many of the questions they asked: How would these events affect the museum and their jobs? What was behind the raid? What were the agents really looking for? Instead, we spent a lot of time listening.

This was the first of several staff meetings that proved important to maintaining morale and a sense of teamwork. To maintain my own sense of equilibrium and let off steam, I felt lucky to have a strong support network of board members and colleagues to talk with, as well as my executive coach, Jay Azarow, a psychologist, consultant and stress management expert.

We called a special board meeting in mid-February to report on the task force, which had met three times in the weeks following the search. Concern was running high among the trustees, and, as expected, the turnout was larger than normal. But to my surprise, the initial findings of the staff interviews and audit of collections donation records were met by near silence. There was some discussion of the best- and worst-case scenarios, but not the sort of extended conversation I was anticipating. In the best-case scenario, no action would be taken against the museum. In the worst-case, the museum could be fined and indictments made against certain individuals.

As I reflected on the meeting later, I realized that organizations can behave like individuals when confronted with a crisis. Many of us tend to overreact because taking action typically reduces anxiety, however rash and ill considered. The other tendency is denial—to shut down, either not knowing what to do or hoping that business will return to normal as soon as possible. I found that keeping the lines of communication open is key.

After briefing the board, we wanted to communicate with our donors and other supporters. Our public relations firm suggested we send a message as soon as possible. We drafted a letter based on the strategy we created together: defining the problem as narrowly as possible, reminding donors that PAM is one of many museums facing issues of cultural patrimony and noting that we were taking immediate and strong action to deal with the situation.

One of the biggest lessons I learned during the 30 days after the raid was that just because you think your institution acted in good faith does not mean you are prepared to deal with the press. Reporters spend a lifetime perfecting ways to extract and uncover information from a variety of sources.

My strategy was to prepare talking points and not stray from them. When I arrived at the museum the day after the search, I had more than 30 calls from reporters at outlets ranging from Newsweek to ARTnews. I could not return all of the calls at once, so I had my assistant check print deadlines so I could prioritize my responses. If you do not respond in time, as happened to me in some cases, you will find the story reads, "No comment was available from the Pacific Asia Museum" or "the Pacific Asia Museum did not return our calls," both of which carry negative connotations.

I prepared a short list of key points, the same points we later outlined in the letter to our members, and kept it taped to the center of my desk. When I talked to reporters, I tried to resist the temptation to be creative or to worry about repetition, thinking their goal was to get me off-message in hopes that I would say something new. The more calls I fielded, the better at this I became.

Our public relations firm gave me some of the best advice I received. It included never saying "no comment," not repeating a negative phrase used by the reporter, speaking in positives and not being afraid to say, "I don’t know, but I’ll find out." I also was reminded to consider each question as a stand-alone, presuming no previous answers have been given. I did not know what the press would print, but I tried to be as honest and authentic as possible and to tell the truth as I knew it.

Regardless, many of my interviews felt like games of cat and mouse, with me trying to sidestep questions I couldn’t or didn’t want to answer. I tried to anticipate difficult questions and rehearsed them in advance, but there were still some curveballs. I was asked if I suspected certain staff members of illegal activities. My answer was, "That’s a personnel matter, and I just can’t comment." Another line of questioning ran: "What would you do if…?" I responded, "I just can’t speculate on that." To questions that for one reason or another I did not want to answer, my response was always, "That’s not something I’m at liberty to discuss right now."

If you have legal counsel, remember that they may have a different agenda than you in dealing with the media. They will want you to say as little as possible, but you will feel a compelling need to manage perceptions and to present the museum’s story to your donors. This is something we had to consider all the time.

As of this writing, no charges have been filed against PAM or any of the other museums originally involved. We have heard from the U.S. Attorney’s office only once, when it requested copies of our collections management policies.

An unexpected consequence of the raid has been a strengthened commitment to the museum from the community, particularly among members and donors, as well as from the staff and board. Many supporters have expressed appreciation of our efforts to keep them informed and in some cases have increased their level of giving. Reinforcing the adage that there’s no such thing as bad publicity, attendance has also jumped.

Having successfully weathered the crisis together so far, the staff, board and I have acquired a greater sense of trust and identity as a team. We now have a deliberate and organized crisis management protocol in place should we face another unforeseen emergency. We have made significant improvements to our collections management policy and ensured that its contents are fully understood by all. The new policy seeks broader input in decision-making from a collections review committee comprising senior staff, trustees and outside experts. This level of review ensures a more formal process of checks and balances. Organizations, especially small ones, often find these processes to be cumbersome and needlessly time-consuming, but they force a level of rigor and accountability that results in better decisions and better outcomes.

You never know what you are capable of until you are challenged. The experience of those first 30 days revealed leadership abilities I did not know I had. I was able to quickly assess the situation and respond decisively even as events continued to unfold. My intuitive response to the press and to crafting a message had been right even before we consulted with our outside public relations firm.

Sidebar

This is the letter we sent to our members and donors, which was also posted on our website:

Jan. 28, 2008

Dear Friends,

As you probably know, several museums in California, including the Los Angeles County Museum of Art, the Bowers Museum and the Pacific Asia Museum, were recently served with search warrants in an ongoing FBI, IRS and Immigration and Customs Enforcement investigation relating to allegedly looted artworks, their donation to these institutions and appraisals of the donated artworks. Many top museums across the country, including the Metropolitan Museum, the Getty and the Museum of Fine Arts, Boston, are dealing with similar issues of provenance and cultural patrimony.

This is the first time in our history that this issue has arisen. The items in question include roughly 100 works out of the museum’s collection of 14,000 objects. The affidavit accompanying the search warrant raises questions about the museum’s acceptance of these artworks and about third party appraisals of the value of these objects.

The museum considers this a very serious matter and immediately launched its own internal investigation. A task force, led by attorney and trustee Robert Sheen and comprised of several other trustees, the executive director and an outside museum professional, is reviewing the circumstances under which the donations were made, as well as the museum’s policies and procedures governing donations to the collection.

Until the task force investigation is completed, the museum has suspended all collections donations.

It is important to note that the museum does not condone trafficking in looted artwork and it does not value or appraise art.

We will keep you informed of developments, and the task force report will be available to the public. Meanwhile, we welcome your questions and comments.

I also personally called important donors, community leaders, senior staff and trustees to give them an update and to respond to their questions about the nature of the allegations and the number of donations involved. While there were more questions than answers, people appreciated being contacted individually and early on. Again, it is easy for inaccurate information to fill a vacuum, and we wanted to prevent speculative rumors from circulating.