[CPProt.net] Ex-Getty Curator Received 2nd Loan

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THE WORLD

Ex-Getty Curator Received 2nd Loan
By Jason Felch and Ralph Frammolino
Times Staff Writers

November 17, 2005

The J. Paul Getty Museum's former antiquities curator, Marion True, received
a $400,000 personal loan from two wealthy art collectors just days after the
museum closed a deal to acquire their collection, records and interviews
show.

True was a driving force behind the Getty's 1996 acquisition of Lawrence and
Barbara Fleischman's 300-piece collection of Greek, Roman and Etruscan
artifacts, considered one of the finest private antiquities holdings in the
world. The Getty paid $20 million for 32 pieces in the collection, and
received the rest as a donation. 

Three days after the deal was closed, records show, Lawrence Fleischman
agreed to lend True $400,000 with an interest rate of 8.25 %, market rate at
the time. The loan was unsecured.

True used the loan to repay money she had borrowed to buy a Greek vacation
home from an antiquities dealer with whom she was also conducting business
on the Getty's behalf.

True retired abruptly last month after The Times inquired about the purchase
of the Greek house. Getty officials said the loan was a breach of the
museum's conflict-of-interest policy. 

By repaying the first loan with money borrowed from the Fleischmans around
the time of the Getty's transaction with the collectors, True created an
even greater conflict, members of the Getty Trust Board of Trustees and
outside ethics experts said Wednesday.

The Getty's conflict-of-interest rules bar employees from borrowing money
from any "individual or firm with whom the trust does business of any kind."


"Of course we think it's a conflict," said John Biggs, chairman of the Getty
board. "I think everybody's uncomfortable with it, but we're not sure where
to go from here."

Biggs is also chairman of a special committee of the Getty board formed last
month to look into the allegations involving True.

True, indicted by Italian authorities for allegedly trafficking in looted
art, appeared Wednesday in a Rome courtroom as her trial resumed. Her
attorney in Los Angeles declined to comment.

The Getty's acquisition of the Fleischman collection is expected to figure
prominently in her trial. The Italians allege that True used that collection
to obtain artifacts that had been recently excavated and smuggled out of
Italy.

The special committee is also investigating Getty Trust Chief Executive
Barry Munitz's use of tax-exempt Getty funds. Munitz is under investigation
by the California attorney general's office, which launched its inquiry
after The Times disclosed in June that Munitz had spent lavishly on perks
and travel. 

Biggs said that the circumstances surrounding the Fleischman loan to True
are complex and that the special committee's internal investigation of
True's two loans is nearly complete.

He added that all information about both loans would be provided to the
public and to Italian authorities, who have interviewed Barbara Fleischman
about her dealings with True. 

Biggs, former chairman and chief executive of the TIAA-CREF investment fund
and an advocate for corporate reform, said some information has not been
shared with Italian authorities in the past, "but this is one that is
obvious that is significant to them."

Added Ronald L. Olson, an attorney hired to assist with the Getty's internal
review: "The committee and its representatives will have free rein to pursue
all relevant facts and intend to do so." 

Neither Fleischman nor True disclosed the loan in annual
conflict-of-interest statements, according to Getty trustee Ray Cortines,
who as chairman of the board's audit committee checked the disclosure forms
after learning of the loan.

Regina Herzlinger, a Harvard Business School professor and expert on
corporate governance, said it was "terrible" that neither disclosed the
loan, and that the financial tie could have undermined True's ability to be
a "dispassionate" expert for the Getty. 

The fact that the Fleischman loan did not require True to secure it with the
villa as collateral made it even more problematic, Herzlinger said. 

"If you lend me money and just have my word that I'd repay, that's a risky
loan," she said. "If it's an unsecured loan, it begins to smack of a tit for
tat."

In 2000, Barbara Fleischman joined the board of the Getty Trust, the parent
organization of the museum. She remains a trustee today. 

Fleischman said in an interview Wednesday that it never occurred to her that
she had to disclose the loan, which her late husband had arranged with her
knowledge. Her husband died in 1997. She said the loan had nothing to do
with the couple's business transactions with the Getty.

Fleischman said she told Munitz about the loan last month when questions
arose about the curator's purchase of the summer home in Greece. Last week,
Fleischman appeared before her board colleagues to explain the loan. 

"In the aftermath, I realize that if it was my husband's, it was mine," she
said, adding that she had been naive to think her husband's dealings "didn't
attach to me."

"The reason why he didn't hide the loan was because it was an honorable loan
to a friend, with interest," she said. "There's nothing sneaky about this."

Fleischman added that she has actively advocated for better management and
governance at the Getty, and intends to continue to do so.

"I have no intention of leaving the board," she said.

True's two loans have raised questions about the Getty's senior leadership. 

The Times reported last month that True purchased the Greek house in 1995
after being referred to an Athens attorney recommended by Christo
Michailidis, a Greek antiquities dealer who together with his partner, Robin
Symes, sold millions in antiquities to the Getty.

Michailidis' nephew told The Times that the attorney worked for the dealer's
family, and that the money was provided by an offshore company to disguise
the source. 

The loan was for four years, with most of the money due at the end in a
balloon payment, the board's special committee found. 

Records obtained by The Times show that former museum director Deborah
Gribbon and Peter Erichsen, the trust's general counsel, were told about the
first loan.

Gribbon questioned True about the loan, and said Wednesday in an e-mail to
The Times that Erichsen was present at the meeting. Erichsen has told the
board's special committee that Munitz was informed about the loan and given
a report after True was confronted about it, the board's special committee
has found.

There are conflicting reports about how True responded to those questions in
2002. She did not reveal the second loan - from the Fleischmans - at the
time. But when The Times raised questions last month about the first loan,
True was told to retire, several sources said. The Getty announced her
retirement a day later. 

The revelations about the Fleischman loan add a new twist to the Getty's
acquisition of the couple's collection, a move that touched off a storm of
public criticism when it was announced nine years ago.

Shortly before the acquisition, True and the Getty had announced a tough new
policy promising to curtail its purchases of antiquities and pledging to buy
in the future only from "established, well-documented" collections. The move
responded to criticisms that museums, and especially the Getty, were fueling
the demand for looted antiquities by snapping up items that appeared on the
market with no documented ownership history, or provenance.

But critics accused the Getty of hypocrisy when it turned around and
acquired the Fleischman trove, the majority of which had no documented
ownership history. The first and only time the collection appeared in a
publication was in a 1994 book that True and the Getty put out when the
museum exhibited the couple's artifacts.

True played a key role in the Getty's securing of the renowned collection,
according to several current and former officials of the trust. Several of
the world's most prominent museums were interested in the antiquities.

"I don't think the Fleischman collection would have ever come to the Getty
without Marion," said audit committee Chairman Cortines, describing her role
as "enormous.. They trusted her."

Fleischman said True became a close friend of the couple, a relationship
that contributed to the couple's decision to donate the sought-after
collection to the Getty. 

Fleischman said True played no role in the financial negotiations over the
acquisition. 

The final agreement was signed June 14, 1996. Three days later, True wrote
to her Greek lender that she "had finally found an American source for a
20-year mortgage."

Lawrence Fleischman's offer came during a casual conversation with True, who
expressed frustration over trying to obtain a replacement loan with better
terms, according to his widow, who said her husband told her of the exchange
soon afterward.

According to Fleischman, True told her husband, "I've struck a snag.
Apparently there's some law in Greece; there's a problem borrowing the
money.' "

As Fleischman related: "My husband said, 'I'll loan you the money.' 'No,
no,' she said, 'I'll exhaust my other resources.'

"He said, 'Look, Marion, this will be a straight loan. I'll charge you
interest. I'll be delighted to help.' "