By Michael McCullough
A certain amount of information about the meeting of the Advisory Council on Wildlife Trafficking on March 20th has been passed on to me by members of the art trade who were in attendance.
It’s clear that the Council has no authority to make policy and is merely advising the Obama administration on policy options. However, it’s equally clear that the Council represents the will of a small group of wildlife organizations. Federal advisory bodies are usually dominated by interest groups that are able to place their members on the committee, which for these groups means that the government receives good information on the “true preferences” of private interests. Only in Washington can the interests of a narrowly focused group be considered an accurate reflection of the nation’s needs. The fact is that the Council contains no member with knowledge of the arts and antiques market, and, as a result, cannot offer any real advice to the White House on dealing with the issue of antiques. An example of this is the Council’s recommendation to the administration that it should start a public campaign to decrease public demand for goods made from endangered species: the Council’s discussion of the “demand” for ivory could articulate no sophisticated distinction between bona fide antiques containing ivory and tourist trade materials. In consequence of this, the “ivory problem” will remain a ripe target for a total ban on the sale of objects containing the material.
In a letter sent to Director Ashe of the U.S. Fish and Wildlife Service on March 7th, the Art and Antique Dealers League of America (“AADLA”) and the National Antique and Art Dealers Association of America (“NAADAA”) proposed the creation of an art advisory panel to assist the Fish and Wildlife Service in assessing whether objects being imported, exported or sold in interstate commerce are antiques. The implementation of an advisory panel would provide an effective solution to a problem viewed by the Council and the Administration as complex; it would encourage transparency, promote the lawful trade of ESA-permitted objects, and discourage the black market in unpermitted objects.
These two dealer groups were represented at the meeting last week by Clinton Howell, the President of the AADLA and a member of NAADAA. Mr. Howell provided the Council with strong critique of the administration’s recent actions, especially of Director Ashe’s “Order No. 210” that places severe restriction on the ability of dealers and auctioneers to sell antiques containing endangered species. Mr. Howell also distributed an excellent survey of the use of ivory in antiques, entitled “Ivory and Its Widespread Use in Cultural Artifacts,” done by the British Antique Dealers’ Association. Mr. Howell other materials included a report on the use of ivory in jewelry and a fact-sheet on the illegal ivory trade.
While the meeting contained a discussion about Senator Feinstein and Representative Garamendi of California developing legislation that could ban all ivory sales in the US, the immediate concern for the art and antiques trade remains the ominous restrictions in Order No. 210. Legislation could take months if not years to complete, but the Fish and Wildlife Service has already begun to impose new restrictions on the import and export of objects containing endangered species, and will likely begin enforcement of the new rules on the interstate trade within 60-90 days. These new regulations will destroy many small businesses long before a vote is taken in Congress.
McCullough offered the following compromise to FWS
In a letter sent today to Director Ashe of the U.S. Fish and Wildlife Service, the Art and Antique Dealers League of America (the “League”) and the National Antique and Art Dealers Association of America (“NAADAA”) proposed the creation of an art advisory panel to assist the Fish and Wildlife Service in assessing whether objects being imported, exported or sold in interstate commerce are antiques over 100 years old.
The proposal states that “every importer, exporter and seller in interstate commerce would be required to apply to the Service for an ESA permit to conduct such activity with respect to each object containing ESA-listed species. The Advisory Panel would review the permit applications and advise the Service on the antique status of the objects. This would create a transparent market for ESA-permitted objects reviewed and certified by the Advisory Panel and registered with the Service.”
The art advisory panel is not a new idea. The Internal Revenue Service has maintained a similar advisory panel since 1968. The Art Advisory Panel of the Commissioner of IRS provides advice and makes recommendations to the Art Appraisal Services unit in the Office of Appeals. The IRS Art Advisory Panel helps the IRS review and evaluate the acceptability of tangible personal property appraisals taxpayers submit in support of the fair market value claimed on the wide range of works of art involved in income, estate, and gift tax returns. Some of the past and current members of the IRS Art Advisory Panel are past and current members of the League and NAADAA.
According to the letter, “[t]he implementation of the Advisory Panel along the lines proposed [above] would provide an effective solution to a complex problem; it would encourage transparency, promote the lawful trade of ESA permitted objects, and discourage the black market in unpermitted objects. In the absence of such transparency, the legitimate trade in antique ivory will suffer, and a secondary, secretive ivory market may continue to the detriment of the world’s elephant herds. We wish to help to avoid this counterproductive result.”
The League and NAADAA were advised by Michael McCullough LLC, a New York law firm that advises leading auction houses, dealers and collectors on endangered species issues in the art market. Mr. McCullough is an art market lawyer who is a former Associate Counsel to Sotheby’s. “This is a serious proposal by the dealer groups,” said Mr. McCullough. “It’s important to maintain a legal market for art objects that contain endangered species. By having a legal regulated market in antique objects certified by an advisory panel within the Fish and Wildlife Service, collectors and dealers will have a regulated market to trade in important art objects. Under the current Director’s Order, many of the objects in private collections and museums are worthless.”
After reading the letter, William Pearlstein of Golenbock Eiseman Assor Bell & Peskoe LLP, a prominent art market lawyer, said “the twin goals of the dealer’s proposal to create a transparent, licit market in ivory objects that are vetted and certified as antiques, and discouraging the traffic in uncertified objects that lack permits merits broad support.”
Mr. McCullough’s firm is organizing a meeting on March 18, 2014 from 6:30-8:30 in New York City for all interested collectors, dealers, auctioneers, museums and other interested parties to discuss the Director’s Order and the proposed solutions for maintaining a legal trade in objects containing endangered species. Those interested in attending the meeting should contact Mr. McCullough at Michael@