drawing might be out of the ordinary. Would there be any impropriety, he wondered, if he got a surrogate to bid on Hopstan's behalf?

Transcription

1 NONPROFIT MANAGEMENT CASE COLLECTION James R. Glenn, Jr. and Stephen E. Weil University of San Francisco College of Professional Studies Institute for Nonprofit Organization Management 2130 Fulton Street San Francisco, CA Copyright 1999, University of San Francisco Permission granted to purchaser only to reproduce for classroom use. Unauthorized duplication of copyrighted material is a violation of federal law. CS0125

2 James R. Glenn, Jr. and Stephen E. Weil Case Abstract A curator of European drawings in a museum faces issues of conflict of interest and professional obligation when deciding how to acquire a drawing which he suspects is much more valuable than the price it will probably bring at auction. Dilemmas include determining to what extent he is ethically obliged to reveal his superior knowledge, how much his supervisor should be involved, and what obligations he has to his profession, his employer, and his mentor. Copyright 1999, University of San Francisco Permission granted to purchaser only to reproduce for classroom use. Unauthorized duplication of copyrighted material is a material is a violation of federal law.

3 Dr. Patrick Barga was trembling with excitement. Only rarely does a young art museum curator a curator of European drawings, at that get the opportunity to play a heroic role. And yet, here he was, poised on the edge of glory. The cause of his excitement was an unsigned and somewhat faded ink drawing. It had been catalogued simply as "Northern Italian, dating from the Renaissance." It was being offered at Noothby's auction house in New York in two weeks. The estimated value was between $2,500 and $3,500, with the proceeds going to benefit an interfaith hospice located, by sheer coincidence, not more than a mile from Pat's museum. There was no history of its ownership and no indication of authorship. The drawing might easily escape the attention of other museums or collectors. Pat was reasonably certain that this drawing was and that he could prove that it was by Leonardo da Vinci! If he was right, then notwithstanding its condition its real value might easily be $1 million but certainly in six figures. To prove it, though, he needed the drawing in his hands in order to run certain tests and make some microscopic comparisons. For one brief moment, he'd felt a selfish impulse. What if he simply borrowed some money, gambled that he could get it for a decent price and bought the drawing for himself? True, the rules of the Hopstan Museum the large municipal institution for which he worked did not permit its curators to collect in competition with their employer, but he could always resign. There were problems, though: he was not yet wholly certain about the drawing; it was also a bit "iffy" as to whether he could actually buy it; and he dreaded the red tape he'd have to go through to reclaim his civil service job if things didn't work out. There might also be some difficulty in that he had still been a museum employee when the drawing first came to his knowledge. No, he would do the decent thing and try to acquire it for the Hopstan. Three difficulties would still have to be overcome. The first was the price. While he had the authority to purchase art works for up to $5,000 each year on his own discretion, and his current year's allotment was still unspent, what if the drawing went for more? Auctions sometimes got crazy. While his supervisor, chief curator Agnes Grunch, could authorize him to go higher, he found himself reluctant to confide in her for several reasons. If he turned out to be wrong about Leonardo, she might consider it a mark against him. Worse, she might decide to discuss it with the director and the director might go to the city commissioners. The bureaucracy in a public museum could be terrible, and his instincts told him it was not good for too many people to know. Finally, of course, to involve Ms. Grunch could dilute his own potential role. On price, he'd just have to risk that the drawing could be bought for $5,000 or less. The second difficulty was with the auction process. How could he avoid tipping off those attending the auction of his interest? He was, after all, an increasingly well-known Leonardo scholar. His doctoral dissertation on the artist's botanical drawings had been widely circulated. For him to take up actively bidding at the auction would be a sure signal that the

4 Pat Barga s Discovery Page 2 drawing might be out of the ordinary. Would there be any impropriety, he wondered, if he got a surrogate to bid on Hopstan's behalf? His biggest problem, though, was deciding how to conduct himself until the auction. Given both his expertise about Leonardo and the fact that the Hopstan was an entirely taxsupported institution, it was not unreasonable to expect that other potential purchasers collectors, curators in other museums, or even his professional art historian colleagues in the College Art Association might feel free to seek his advice. As a professional, he was expected to share his knowledge and experience with other scholars and students. Pondering these questions on his way back from lunch, he was rudely precipitated into a decision-making mode by the two messages that awaited him. The first was in the form of a memorandum from the chief curator. Unless Pat had some compelling objection, she would like to swap his unspent $5,000 of discretionary purchase funds to the decorative arts department for the current year. It had to do with some very desirable Wedgewood pieces that had unexpectedly become available but had to be paid for immediately. Could he please let her know by the day's end whether or not this would give him any kind of a problem? The other message was from Professor Segreto, the soon-to-retire Renaissance specialist who had served as his dissertation advisor and still remained a good friend and mentor. It was decidedly cryptic. Could Pat please call him right away at the university? He'd just run across something most amusing perhaps even extraordinary, and possibly be a unique form of pension in the catalogue for a forthcoming auction in New York. He urgently wanted to get Pat's opinion on it. "Shall I get Professor Segreto for you?" the departmental secretary asked. "Or would you prefer to talk with Ms. Grunch first?"

5 Pat Barga s Discovery Page 3 DISCUSSION QUESTIONS 1. What are the key potential ethical dilemmas in this case? 2. To whom or what does Pat have ethical obligations? How should he prioritize those obligations? The museum? The public? Professor Segreto? His profession? His superior? The hospice? The auction house? The drawing? 3. How does an employed professional resolve the tension that may arise between loyalty to one's profession and loyalty to one's employer? 4. Is Pat's expertise and possible utilization of his knowledge different from that of people engaged in insider trading on Wall Street, or those secretly buying land for university or hospital expansion? If so, how? 5. Are there other options you can suggest for Pat? Why would they be more ethical? 6. What should Pat do? Why? How? 7. Assume that Pat provides all his information to Ms. Grunch who, in turn, informs the museum's director. What should the director decide the museum is to do? Why? How? James R. Glenn, Jr. Professor of Management School of Business San Francisco State University Stephen E. Weil Deputy Director Hirshhorn Museum and Sculpture Garden Smithsonian Institution