Inside the Art Museum Scandal

Two mysterious men lie at the heart of the burgeoning museum scandal in Southern California. Robert Olson is a California antiquities dealer who has spent some 25 years buying and selling prehistoric Native American material and valuable Asian art including statues of Buddha, bronze weapons and 2,000-year-old ceramics from Thailand's Ban Chiang site. The former steel-company salesman, now 79 and based in Cerritos, Calif., sold artifacts to collectors, dealers and museums--and even on eBay. In early 2003, he met a collector named Tom Hoyt, who said he was a computer executive anxious to get help in building his collection. Over the past five years, Olson and Hoyt met two dozen times, and the older man sold the younger one Thai goods and introduced him to museum curators and collectors so that the man could make donations of pieces from his newly acquired collections for a healthy tax credit.

In reality, "Hoyt" was a pseudonym, and the man was really an undercover agent for the National Park Service who was the sharp end of an investigation into artifacts smuggling. According to federal documents, the thin man with the mustache (whose real name hasn't been released) recorded dozens of conversations and hundreds of phone calls with Olson and other dealers. The undercover investigation into the art market burst into public Thursday as 500 federal agents executed search warrants at the properties of dealers, collectors and four respected Southern California art museums, including the Los Angeles County Museum of Art (LACMA).

The raids made public a five-year-old federal undercover investigation aimed at stopping an alleged black-market trade in artifacts from Thailand, China, Burma, Cambodia and the American Southwest. No one was arrested, and no charges have been filed in the case. The investigation seemed intended to strike a blow at an alleged multi-billion-dollar worldwide trade in looted artifacts by sending dealers and museum officials a clear and urgent message: "We intend to change the culture of museums in this country," Assistant U.S. Attorney Joseph O. Johns, the investigation's lead prosecutor, told NEWSWEEK.

Reached by NEWSWEEK on Thursday evening, Olson agreed that he dealt in Native American and Thai art, but he repeatedly maintained he'd kept on the right side of the law. "I haven't done anything wrong or illegal," Olson insisted. "I never dealt in stolen goods." Olson now calls the man he knew as Tom Hoyt a "a son of a bitch." According to search-warrant affidavits, Olson first attracted the attention of investigators in 2003 when an unnamed alleged smuggler steered authorities to Olson regarding Native American art. "Hoyt" then allegedly made purchases of Thai goods. Then the Feds tracked Olson as he allegedly imported at least 16 shipments of goods from Thailand.

The four museums targeted in Thursday's raids included LACMA, the Pacific Asian Museum in Pasadena, the Charles S. Bowers Museum in Santa Ana and the Mingei International Museum in San Diego. Agents seized or copied computer records at all four in order to learn more about the values of donated Asian and Native American artifacts. Each museum issued statements stressing that they were cooperating with federal investigators. "The Bowers Museum has fully cooperated with federal agents," the museum said. Saying that it too was cooperating, LACMA director Michael Govan said that the museum has "a history of returning works of art where ownership claims are substantiated." It remained unclear how many art items may have been seized from the museums.

Peter Keller, president of the Bowers Museum, told NEWSWEEK that he believes he and his staff did nothing wrong. "The Bowers Museum followed standard museum procedures in its acceptance of donations," Keller said Friday. The museum did not become involved in the appraisal value of donated gifts, he says. Most of the relationship between the museum and Olson came from a Bowers curator named Armand Labbé, who died in 2005. Keller allows that it is possible that "maybe through Labbé we did" make mistakes, and "when Labbé passed away, we stopped taking any donations of archeological materials whatever." Keller points out that although "Hoyt" made two donations during Labbé's lifetime, the undercover operative "was quite agitated" when Keller refused to accept a third donation.

According to the federal affidavits, the Feds will use information gleaned from the raids to establish whether looted goods were sold or donated to the museums and whether museum officials knew about the allegedly doubtful provenance. Investigators say they are also attempting to gather evidence about potential tax violations based on those donations in which the donors would receive artificially high charitable write-offs because the dealers and the museums approved inflated appraisals three and four times the price that the undercover operative actually paid the dealer. In one transaction laid out in the affidavits, the Park Service operative allegedly paid Olson $12,000 for two sets of Thai items that were then appraised at $44,700 and donated to the Bowers Museum in 2003 and 2004. Olson, who said he has yet to consult an attorney, denied any involvement in tax scams. He accounted for the disparity in pricing by saying that he charged the undercover operative "wholesale" prices for the goods he sold him, and the appraisals were made at "retail" prices.

In Thursday's raids, Olson said that agents also visited two of his warehouses, as well as the home of his adult son and daughter. In addition, Olson says that another federal raid took place in the Chicago area, at the home of "my best customer." He declined to name the person, as did federal officials. Agents also raided The Silk Roads Gallery in Los Angeles and the home of its owners, Jon and Cari Markell. According to the affidavits, the Markells dealt in goods from Thailand, Burma and China, and donated goods to LACMA and other museums. The Markells did not reply to telephone or e-mail requests for comment.

If the allegations are true, the investigation will prove to be another embarrassment to American art museums, which have been rocked in recent years by revelations that high-profile collections contain stolen artworks brought to them by a shadowy network of looters, collectors and dealers. Last year, California's Getty Museum agreed to return 40 items to Italy, including million-dollar statues that the Italians claim were looted by local thieves and then sold to the museum. Former antiquities curator Marion True is on trial in Rome for related charges. Charges against True, who has repeatedly said she is not guilty, were dropped in a similar case brought by Greece. Meanwhile, the Museum of Fine Arts in Boston and the Metropolitan Museum in New York also agreed recently to return looted classical art, including the Euphronios Krater, a stunning painted terra cotta urn that the Met returned to Italy this month.

Past scandals started when foreign governments brought complaints; this case appears to be the first homegrown crackdown on museums for alleged looting. Applauding "a federal sting operation like those conducted against other crime networks," archeologist Brian Rose of the University of Pennsylvania said it was "a good thing" that "looted antiquities and contraband drugs are being treated as the same thing [by investigators]." But Rose, who is also president of the Archaeological Institute of America and a curator at Penn's museum, adds that many museums have installed tougher provisions to check a potential acquisition's provenance, or history of ownership, in the wake of recent scandals. "Museums in general shouldn't be treated as villains," he added.

According to search-warrant affidavits in the case, federal agents are exploring whether museum officials and the collectors and dealers violated federal and state laws blocking the unlimited traffic in antiquities. Federal laws such as the Archeological Resources Protection Act prohibit the sale of domestic American archeological remains recovered on federal lands. They also allow prosecutors to charge a federal crime when looters violate state law. California law prohibits the sale of goods whose export is banned in the country of origin, effectively making the traffic a federal crime, according to the affidavits.

Much of the furor surrounds artifacts from the Ban Chiang culture in northeastern Thailand, which flourished between 1,800 to 3,000 years ago, producing fine ceramics and bronze works. Thailand banned the unapproved export of antiquities in 1961, and Ban Chiang artifacts only began to be excavated later that decade, according to the federal affidavits. Other works came from China, Burma and Cambodia, according to the federal documents. The Bowers Museum raid also concerned a collection of Native American ladles found in the Southwest that Olson said he donated to the museum more than 20 years ago.

As agents sift through the seized records, it may be weeks or even months before the targets learn whether or not they will be charged in the case. But long before that, the ongoing sting operation may well force anxious museum officials around the country to tighten their acquisition procedures and make looters and dealers much more careful.