Tuesday, January 14, 2014

DIA: Elusive Coherence

We live in a catch-as-catch can world. On two earlier occasions I’ve mentioned the Detroit Institute of the Arts (DIA) (link, link). It has the misfortune, now that Detroit is in bankruptcy, of being municipally owned. To satisfy the city’s $18 billion in debt, the holdings of the DIA, valued at around $1 billion, may be sold. The picture here, however, is more complicated than would appear. We all think of the DIA as the museum. But things are otherwise.

The DIA, per its own June 30, 2013 financial report, is a 501(c)(3) not-for profit corporation. The first of its several purposes is to “Assist the Arts Commission of the city of Detroit (the City) with the operation of the Museum under contract with the City.” In other words, the DIA does not own most of the art the DIA shows; the City does. The same report also states explicitly that “the City holds legal title to certain museum assets, including artwork.” Evidently that title is to most of the DIA’s holdings; the DIA’s financial report itself only shows total net assets of $176 million. Furthermore, according to news reports, DIA may have to sell art up to a maximum of $500 million to satisfy the City’s bankruptcy. Concerning its holdings of art, the DIA has this to say in its financial report:

In conformity with allowable museum financial statement presentation practice, the value of the art collection is excluded from the statements of financial position. Title to art objects purchased by or donated to the DIA is in  the name of the City absent contrary restrictions imposed by a donor. Such art is accessioned to the permanent collecton of the museum upon approval of the Board of the Arts Commission of the City.

The report also states that the DIA (read the City) received donated art valued at $2.1 million in the fiscal year ending June 30, 2013—but that that sum (unaudited) does not appear in the financial report. The City of Detroit—not the DIA—also owns the building and land occupied by the DIA.

Now the state, in the person of the Attorney General of the State of Michigan, has issued a Formal Opinion (No. 7272, dated June 13, 2013. It assets that “The art collection of The Detroit Institute of Arts is held by the City of Detroit in charitable trust for the people of Michigan, and no piece in the collection may thus be sold, conveyed, or transferred to satisfy City debts or obligations.”

Which makes me wonder whether or not such a Formal Opinion may be overturned in the courts. Or is that the final word on the matter? If so, why is that not common knowledge?

I looked up this much of the background because a cabal of foundations, lead by the Ford Foundation, has offered the DIA $300 million to be used to satisfy some, at least, of the City’s underfunding of its pensions. The total of those underfunded pensions is $3.5 billion; therefore the $300 million is but a drop in the bucket. And yet—despite that—the New York Times informs me that the DIA may still have to cough up $500 million.

It will work out somehow. But my sense of outrageous disorder in the world keeps being confirmed. And having watched a dreadful story on PBS last night, it makes me wonder how far $300 million might go toward eradicating cholera in Haiti, evidently planted there by UN soldiers sent to keep order in that devastated region. Especially if, despite $300 million, the DIA still has to sacrifice its Van Gough and such.

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