Christopher Mason, author of The Art of the Steal: Inside the Sotheby’s–Christie’s Auction House Scandal, thinks billionaire Albert Taubman got a raw deal when he was sent to jail for price-fixing two years ago.


But the book is more than a defense of the famed shopping center developer who became owner and chairman of Sotheby’s (then Sotheby’s Parke Bernet) in 1982. It is a detailed, gossipy account of the inner workings of the two firms known for auctioning the multi-million dollar paintings, diamonds, emeralds and other possessions of the rich and famous. While the art world this week buzzes about the August 22 theft of Edvard Munch’s “The Scream” from Oslo’s Munch Museum, The Art of the Steal talks about a different kind of theft, focusing on the background behind the auction houses’ price-fixing conspiracy, who was involved and how it came to light.


Mason relates in lively style the problems – both personal and professional – of the many players in this drama, two of the most important being Diana “Dede” Brooks, CEO of Sotheby’s, and Christopher Davidge, CEO of Christie’s. A free-lance writer who specializes in stories about art and high society, the author says he conducted 2,400 interviews with 300 people over a period of 2½ years to spin this tale of glamour and greed.


Mason explains that valuables come to the auction houses as the result of “death, divorce or debt.” The owner or estate wants cash. From their earliest days, Sotheby’s (founded 1744) and Christie’s (founded 1766) both would woo the responsible party to win consignments — traditionally making their profits by taking a commission on the amount received by the seller.


But in recent years, competition between the two houses for the largest and most headline-grabbing collections had resulted in one side or the other offering to cut the commission they receive from the seller to zero. They might also promise a guarantee of a minimum return or offer to take the valuables on tour, among other costly inducements. That meant relying for profits on their commissions from smaller consignments and on commissions charged to buyers.


When Sir Anthony Tennant, former head of Guiness, became chairman of Christie’s in 1992, he complained that “given the established practices at both houses, no wonder neither company was very profitable.” When Tennant saw Taubman at a London art gallery in 1994, he went up to him and said: “Maybe we could get together.” Taubman said: “Fine.” He recalled wondering: “What does this guy want?”


The two arranged to meet at Taubman’s pied-a-terre in London and over a breakfast of scrambled eggs and smoked salmon complained to each other about practices they felt were bad for both firms. Among Taubman’s complaints: that Christie’s openly disparaged the authenticity of multi-million dollar works of art coming up for sales at Sotheby’s. Among Tennant’s complaints: Sotheby’s practice of donating to the favorite charity of a prospective customer to win business.


Tennant also took the occasion to point out how the practice of waiving the auction houses’ commission to win major consignments was hurting the profits of both firms. If the two firms agreed not to negotiate the seller’s commission, Tennant said, it would mean an extra $12 million-$15 million a year for Christie’s and $18 million for Sotheby’s. Mason writes that the two then told Brooks and Davidge to “work out the details” about the commissions. (He notes that Taubman denies this.) Brooks said she agreed to do it when given the order, although she knew “it was wrong.”


A year went by with nothing implemented. But then, in 1995, the art market took a dive and Brooks and Davidge not only agreed there would be no more zero commissions, but also came up with a very specific “non-negotiable” sliding scale of percentages depending on the size of the consignment. Mason says both CEOs notified their respective chairmen of the agreement. Profits improved at both houses as planned, especially after the art market revived in the next two years.


John J. Greene, the U.S. Justice Department prosecutor who had been pursuing a variety of art frauds for 11 years, got a tip that Sotheby’s and Christie’s had agreed to price fixing, but despite the timing of the deal, he couldn’t prove it. It wasn’t unusual, Mason points out, that after one auction house adopted a new policy, the other would soon follow suit.


Indeed, Greene might have only ended up with his suspicions if Christie’s had not acquired a new majority owner in 1998. The new owner – French billionaire Francois Pinault (whose company, Artemis, included Converse sneakers, Samsonite luggage, and Vail Ski Resort) – fired Davidge who had been with Christie’s for 34 years, ten of them as CEO.


Pinault felt Davidge had become more concerned with his own luxury (as in having Christie’s pay $32,500 a month to provide him with a Park Avenue apartment in New York) than in improving business. Pinault also wasn’t interested in paying Davidge any severance. That was when Davidge revealed to Patricia Barbizet, CEO of Artemis, that Sotheby’s and Christie’s had engaged in price-fixing and he had kept voluminous notes to prove it. These notes, he said, showed that Tennant had initiated the conspiracy.


Davidge’s lawyers correctly believed he could use those notes to bargain for a deal with the U.S. prosecutors. There was no way the U.S. Justice Department could get Davidge’s notes as long as they were in London. And those notes were the only concrete evidence of the deal. Davidge then proposed using his bargaining power to gain amnesty from any anti-trust prosecution for Tennant and Christie’s as well as for himself in return for an $8 million severance he would otherwise not have received. Christie’s owner agreed.


While collusion was also illegal in the U.K., Mason writes, at that time only civil penalties were imposed. But under the Sherman Anti-Trust Act, the charges brought against the chairmen and CEOs of Sotheby’s and Christie’s in the U.S. carried severe criminal penalties.


And so it was that Christie’s was safe. But not so Sotheby’s.


Dede Brooks was forced by Sotheby’s board to resign as CEO but was able to cut a deal with the prosecution by agreeing to testify against Taubman. She was sentenced to three years probation, with six months of home detention. The latter meant that, except for approved visits, she had to stay in her $5 million Manhattan co-op.


That left Taubman who, in April, 2002, at age 78, ended up in jail.


Mason doesn’t insist that Taubman is innocent. But he writes that cheating was totally out of character for the man and that Taubman always had a reputation for being honest in his business dealings. Taubman was known, for example, for paying New York tax on valuables bought in Manhattan although he could avoid the tax by having goods shipped out of state to one of his many homes, according to Mason. And he would pay custom duties on goods brought to the U.S. in his private aircraft when many others did not. In any case, Mason clearly thinks it unfair that Tennant, the initiator of the deal, and the two CEOs who made it happen, didn’t pay anywhere near the same price as the Sotheby chairman.


The scandal had no lasting effect on either auction house. They continue to be the destination of choice for the very upscale. Christie’s recently auctioned off the possessions of the late tobacco heiress Doris Duke while Sotheby’s handled the estate of Katherine Hepburn.


And whether or not justice was done in the case of Albert Taubman, there is no doubt that Christopher Mason’s The Art of the Steal more than does justice to a business scandal whose intricate details make for a fascinating read.