Panama Papers Provide Rare Glimpse Inside Famously Opaque Art Market The leaked documents tell the backstory of a groundbreaking Christie's auction, and the purchase of a painting one man claims was seized from his grandfather during World War II.

Panama Papers Provide Rare Glimpse Inside Famously Opaque Art Market

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The Panama Papers reveal hundreds of thousands of shell companies used to circulate assets around the world. One of those assets is fine art. The leaked documents show how collectors and companies buy and sell art undetected - until now. NPR's Elizabeth Blair has two examples.

ELIZABETH BLAIR, BYLINE: Exhibit one - a famous Christie's auction almost 20 years ago.


UNIDENTIFIED MAN: "Les Femmes D'Alger," Version O - 16 million, 19 million, 20 million.

BLAIR: Some of the world's most important and richest collectors bid on paintings from the Victor and Sally Ganz collection. This 1997 auction is said to have launched the skyrocketing prices for modern art.


UNIDENTIFIED MAN: Twenty-eight million - telephone bidder - for you, sir, $28 million. For you, sir, 690.


BLAIR: Jake Bernstein is a senior reporter with the International Consortium of Investigative Journalists, which has the leaked documents.

JAKE BERNSTEIN: This is a collection that Victor and Sally Ganz had accumulated over 50 years. And they had a lot of wonderful pieces - particularly a lot of Picassos - and it was a record sale.

BLAIR: More than $200 million, a terrific profit for the Ganz family - or so it seemed until the Panama Papers were released. Turns out the Ganz's had already sold the paintings months earlier to a subsidiary of Christie's for $168 million. That company then sold the collection to another company based on a small island in the South Pacific. Again, Jake Bernstein.

BERNSTEIN: We figured out through the data exactly who was behind this offshore company, and it turned out to be a gentleman - a British billionaire named Joe Lewis who was, at the time, the largest shareholder in Christie's.

BLAIR: The Panama Papers show that both Lewis and Christie's stood to share profits if the auction brought in more than $168 million, which it did. This deal wasn't illegal, but it was secretive. Sarah Thornton, author of "Seven Days In The Art World," says the leaked documents confirm what art market observers have suspected for a long time.

SARAH THORNTON: Auctions are theatrical spectacles with a lot of scaffolding and engineering behind them.

BLAIR: Shell companies are part of that scaffolding to hide assets, evade taxes and remain anonymous, which brings us to exhibit number two - Modigliani's "Seated Man With A Cane." The painting has been at the center of a legal dispute for years. A Frenchman named Philippe Maestracci says it belonged to his grandfather before it was looted by the Nazis during World War II.

Maestracci claims it was bought in 1996 by the Nahmads, a wealthy art collecting family. The Nahmads deny it. They say the painting was bought by a company named the International Art Center. Thing is, the Panama Papers show the Nahmads control the International Art Center.

James Palmer is the founder of the Mondex Corp., which works to recover looted art. He's helping Philippe Maestracci try to recover the Modigliani.

JAMES PALMER: The case that we have is very compelling, and so this bolsters our claim.

RICHARD GOLUB: I'm not going to comment on who owns the International Art Center.

BLAIR: That's Richard Golub, the lawyer representing both the International Art Center and the Nahmads. He says Maestracci has not proved the painting was looted by the Nazis or that his grandfather owned it.

But the leaked Panama Papers were enough for Swiss authorities to start a criminal procedure and sequester the Modigliani in Geneva. The documents might not lead to any charges, but they do provide a rare view into the opaque world of the international art trade. Elizabeth Blair, NPR News.

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