When doing a Google search of the keyword »Guggenheim Museum,« I came across a German article. I inadvertently clicked the demand for an automatically translated English version. Beginning to read, I wondered whether this was indeed an article on the Guggenheim Museum because repeatedly a Mr. Measurer was referred to. Then it dawned on me that the program had given me a translation of the name of a person I had once met, Thomas Messer, the director of the Guggenheim from 1961 to 1988. German-English dictionaries translate the common German word »Messer« normally as »knife.« In the early 1970s, Mr. Messer was often alluded to as »Mack the knife.« The clever translating program had related his name instead to the German verb »messen,« to measure. He had thus turned into someone who measures and, acting on the results of this exacting occupation, takes measures - by implication then - a person who upholds standards and is at the cutting edge. What better way to characterize the predecessor of Thomas Krens, who has been Guggenheim director since 1988.

In many respects Thomas Messer was a trailblazer for Thomas Krens. One of the last major endeavors under his aegis was an exhibition of Andy Warhol’s »cars«, a series the artist executed shortly before his death. It was a commission of portraits of Daimler-Benz automobiles from the company’s first motorized vehicle of 1886 to a test vehicle of 1970. The then chairman of Daimler-Benz, Edzard Reuter, closed his preface to the exhibition catalogue by aptly noting »A company’s encounter with an artist is as complex as the perfect presentation of perfect products.« In a seconding statement the Museum director paid tribute »to an artist whose achievement is based upon an extraordinarily acute sense of the signs of the time.« He added: »Appropriately, the exhibition is sponsored by Mercedes-Benz...«.

By the 1980s Thomas Messer - like Any Warhol and Messer’s colleagues in other museums – had indeed »an extraordinarily acute sense of the signs of the time.« In a flier, the Metropolitan Museum of Philippe de Montebello had offered a hard-nosed business rationale for the corporate sponsors it was wooing: »Many public relations opportunities are available through the sponsorship of programs, special exhibitions and services. These can provide a creative and cost-effective answer to a specific marketing objective, particularly where international, governmental or consumer relations may be a fundamental concern.« The flier had the telling title »The Business Behind Art Knows the Art of Good Business.«

Nevertheless, when Thomas Messer bailed out in 1988 after 27 years, the Guggenheim Museum was facing serious financial problems. In an interview with The New York Times he gave his blessing to the 41 year old Thomas Krens and assessed him as »an extraordinary young man of great equanimity, of tact, of force.« Attributing tact to the young man was perhaps a bit too generous. Less then 10 years later, in 1996, Elaine Dannheisser quit the Guggenheim Board in a huff: »Tom Krens is very arrogant, and his rudeness was just too much to take,« she complained - and took her collection of contemporary art to the Museum of Modern Art.

But Thomas Messer was right in other respects when he praised the budding director’s »force« and his »international propensity.« Krens’ boast at the time of his appointment, that the Guggenheim »is the one museum in New York City that is a specialist in international outlook« followed a cool business logic: »I think there’s tremendous future potential in that.« From the beginning, global expansion was an essential part of his game plan. Peggy Guggenheim had been persuaded by Messer in 1976 to bequeath her collection and her Venetian Palazzo to her late uncle’s Solomon R. Guggenheim Foundation in New York. It significantly boosted the equity that Thomas Krens was about to wager in his global designs.

During his undergraduate years he had majored in political economy and had later earned a master’s degree in studio art from the State University of New York at Albany. While teaching as an adjunct professor at Williams College in the 1980s, he went for a second master’s degree - this one from Yale’s School of Management. He won praise from one of his Yale professors, Martin Shubnik, an expert in Mathematical Institutional Economics and the author of »Game Theory in the Social Sciences.« When asked about his student, Shubnik said: »Without exaggeration, I can say that Tom has the mantle of P.T. Barnum on his shoulders, and I regard Barnum as a very serious fellow. Tom is probably the greatest seducer in the business« .

Krens did not succeed in seducing the trustees of the San Francisco Museum of Modern Art to appoint him director of their institution. »We were scared to death by all his talk of flow charts and spreadsheets and computers and strategies. He never mentioned a work of art once,« The New Yorker quoted one of the trustees. The Guggenheim trustees, however, were not frightened by his management lingo.
Facing the task of tackling the financial disaster they had been presiding over, they were eager to be seduced by a full-blooded go-getter with a business plan. The culture of the Guggenheim board, headed for decades by Peter O. Lawson-Johnston, was quite compatible with Krens’ outlook. Peter O. Lawson-Johnston is a son of Barbara Guggenheim. Still today he is involved with the significant mining interests that the branch of the Guggenheim family to which he belongs has held around the world (in U.S. relations with Chile during the Allende/Pinochet years, its El Teniente copper mine in the Andean country, played a critical role). His political leanings may be deduced from his being a director of William S. Buckley’s conservative journal National Review.

The Guggenheim Board had signed up a gambler. There is some doubt today whether the disciple of a Yale economic game theorist was, in fact, a good bet. It is only fitting that Krens eventually opened not only one but two Guggenheim branches at a Casino in Las Vegas in 2001, one of which closed after 18 months and just one exhibition. As the saying goes: you win some, you lose some.

A year after his appointment, Krens wanted to demonstrate to the world that, in spite of his lack of curatorial experience, he was qualified to mount an exhibition filling Frank Lloyd Wright’s spectacular automobile salon turned museum. The neophyte’s 1989 »Refigured Painting: The New German Image, 1960 – 1988,« however, did not gather kind reviews. Krens had to write it off as a loss. Perhaps he had been too absorbed - as he would be many times later - by building and expansion projects: the renovation and the addition of a boxy wing to the spiral of the uptown Museum and the opening of a new branch in SoHo, designed by Arata Isosaki. With a sense of measure for the Solomon R. Guggenheim Museum Foundation’s limited resources, Thomas Messer had prepared a far more modest plan than his successor. A $54.9 million bond issue in 1990 was to finance Krens’ more ambitious ventures. Its debt service has been plaguing the Museum ever since. It has, in fact, governed Thomas Krens’ peripatetic scouring the globe for rescue from what, in economic terms, has turned out to be his original sin. In 2002 his expense account was larger than that of the director of the Museum of Modern Art.

The construction project by Gwathmey Siegel & Associates was to take 18 months and cost $40.3 million. It lasted 26 months and with a cost of $57.9 million it went over budget by $17.7 million. The SoHo branch had a cost overrun of $4.6 million. In 1994, four years after the bond issue, the Museum faced annual interest and principle payments of over $6.5 million. And by 1993 the $10.5 million operating budget of 1988 had risen to a projected $23 million.

The Museum was closed during construction for about two years. As a consequence, it derived no income from entrance fees, retail sales and the rental of its spaces. When the SoHo branch opened in 1992 (behind schedule), to reach the galleries one had to traverse a museum gift shop that occupied almost the entire ground floor. The Guggenheim had commissioned and marketed a great number of objects made in the style of works in its collection.

In a 1994 Art News article that quoted in its title a deputy director of the Museum saying »It’s Tight Right Now,« Robin Cembalest reported that several exhibitions had to be cancelled or postponed - souring relations with cooperating institutions - and that the Museum cut 10 percent of its staff and fired all of its librarians.
Krens asked his remaining staff to become engaged in a drive to increase Museum membership. Ruefully he declared: »I’d rather that the museum was only about art. But that’s the situation that doesn’t exist. So therefore we have to do whatever we can to maximize our revenues.«

In 1990, at the time of his building spree, the Guggenheim director acquired the collection of 300 minimal and Conceptual works of Count Giuseppe Panza di Biumo for a reported $30 million in a gift-purchase. He raised the funds for this purchase by selling at Sotheby’s a Chagall, a Modigliani and an important Kandinsky for $47.3 million. Again in 1999 and 2000 $15 million worth of artworks were de-accessioned and $10.1 million were deposited in a restricted fund of its endowment. The Association of Art Museum Directors asked the Guggenheim to explain this move in light of the AADM’s code of ethics, that prohibits income from the sale of artworks to be used for anything other than the acquisition of other works. The Guggenheim’s deposit in a newly created restricted art fund helped the Museum to meet a critical requirement of the letter of credit stating the terms and conditions for securing its bonds. The letter, since 1997 with WestLB, stipulates that by June 2001 the Museum’s endowment is worth at least $35 million, and that it is to be increased thereafter to $52 million. The original bond issue in 1990 did not provide for the collection to serve as collateral. However, over the years, suspicions repeatedly arose that in case of default there does exist an indirect link. The ADDM is now raising this question again. It is the first time that the Association has investigated a member.

In the early nineties, Krens brought new moneyed members to the Board of Trustees.
Real estate developer Samuel J. LeFrak made a gift of $10 million. His expectation that the LeFrak name appear on the façade of the Museum together with that of Solomon R. Guggenheim was thwarted by the New York City Landmarks Preservation Commission. Instead level 5 of the rotunda and annex are now called »The Honorable Samuel J. and Ethal LeFrak Galleries and Sculpture Terrace.« The billionaire Ronald O. Perelman also gave $10 million and became President of the Board in 1995, succeeding Peter O. Lawson-Johnston who had been president since 1969. As the man behind Revlon, next to the two Lauder brothers, Perelman is the third cosmetics executive at the top of boards of trustees of major New York Museums. Ronald Perelman’s buy-out artistry as Chairman and CEO of a diversified holding company with investments in consumer products, entertainment and financial services got him frequently into the news. But he also got coverage for his generosity to both Democrats and Republicans, for offering Monica Lewinsky a job at a critical time, and a messy custody battle. [(11) Perelman in front of work by Felix Gonzalez-Torres, New York Times, 30 Apr. 1995, Money & Business Section, 1] Articles in The New York Times about his shifting fortunes were often illustrated with photos in which he posed at the Guggenheim Museum. When he pledged an additional $20 million in 1998, the ground level of the rotunda was named for him. But he was trumped by Peter B. Lewis, the head of Cleveland-based Progressive Corporation, one of the largest auto insurance companies of the United States.
Lewis gave $50 million, provided the Board would make him chairman, above Perelman. The Board looked at the figures. Peter Lewis became chairman and Perelman resigned.

In the late 1980s, Thomas Krens had begun his high stakes gamble of global expansion that he hoped would shore up the Museum’s troubled finances. He had his eyes on Berlin’s Martin-Gropius-Bau for a joint venture; however, to no avail. His plan for a Guggenheim branch in Salzburg, to be built by the Austrian Architect Hans Hollein in a mountain, also did not come to fruition. Hollein’s son worked with Krens in New York for a number of years and is now director of the Frankfurt Schirn Kunsthalle, succeeding Thomas Messer on the Main in that position. Like an early attempt to get a foothold in Moscow, adding the Dogana at the entrance to the Grand Canal in Venice to his empire did not pan out. Nor did the feelers he sent out to several cities in Spain lead to a breakthrough.

But, unexpectedly, in 1991, Thomas Krens landed a spectacular coup in Bilbao. It funded the $100 million construction of a museum building by Frank Gehry, which was an adaptation of the architect’s design for the Disney concert hall in Los Angeles, that was realized only much later. [(15) Guggenheim office Bilbao: Frank Gehry model] The Basques also made available $50 million for new acquisitions and agreed to subsidize the museum’s annual $12 million budget. And they paid Krens $20 million in cash up front. The Guggenheim Museum, in turn, was to lend its brand name, works from its collection, and pass through Bilbao shows it had organized elsewhere. It was given complete control over programming and acquisitions for the Bilbao collection.

I was one of those who believed that in this deal the Basques could only lose and the Guggenheim could only win.
Both parties were desperate. Once prosperous Bilbao was crippled by the closing of the steel plants of Altos Hornos de Viscaya on the Nervión river and the demise of attending industries and its formerly busy port. Compounding its economic plight was the reluctance by investors to risk their money in a region wracked by ETA violence. The Basques hoped that the importation of the Guggenheim Museum’s cultural capital would promote urban development, give Bilbao a positive image, attract tourists from all over the world, and thus be a boon to the local service industry. It now appears that the Basque government had indeed made a profitable investment – thanks, no doubt, to the extraordinary attraction of the glittering structure of Frank Gehry that was parachuted into Bilbao. Whatever one may think about its suitability for the presentation of artworks and its ranking in the pantheon of architecture, it appears to perform the economic and the political purpose for which the Basque government spent considerable amounts of taxpayers’ money. Phillip Johnson’s comment »When a building is as good as that one, fuck the art,« may be translated into the economic terms of today’s culture and tourist industry: »If the money is right, fuck the art.« Even though a Basque audit in 2001 discovered a construction cost overrun of $16.5 million and alleged that the Guggenheim in New York had paid higher-than-market prices for its acquisition of artworks for Bilbao, the Basque government nevertheless planned to contribute another $30 million for further acquisitions . The appearance, internationally, of a big popular success also burnished the brand name of the New York mother thus making her attractive for more suitors from around the world, whom she desperately craved. This may, for example, have been a reason behind Enron’s sponsorship of Frank Gehry’s retrospective at the New York flagship. The strategy of franchising the Guggenheim name and sending the collection on the road to bring in much needed cash was given an important boost.

Within a month of the Bilbao opening a joint venture with the Deutsche Bank came to fruition in Berlin. Krens had approached the bank a year earlier. He quickly came to an agreement with Hilmar Kopper, the bank’s president since 1989 and now the chairman of its supervisory board. Both businessmen understood immediately the benefit each could derive from opening a Guggenheim branch in the bank’s regional headquarters Unter den Linden. They fused the names of the two institutions calling the franchise Deutsche Guggenheim. The terms of the contract in Berlin remain a closely guarded secret. However, it is fair to assume that one of the largest banks of Europe made a worthwhile offer in exchange for the cultural veneer and the image of international sophistication associated with Frank Lloyd Wright’s iconic Guggenheim Museum. Hilmar Kopper gave a convincing business rationale in an essay for the book Das Guggenheim Prinzip: »Deutsche Guggenheim Berlin is an advertisement for Deutsche Bank’s global expertise, quality, and innovative potential.« Kopper was equally frank when he explained in 1995, at the occasion of the Deutsche Bank’s establishing a Foundation for Culture: »Whoever gives the money, controls.« In effect, he spoke for all corporate sponsors. Like in Bilbao, Guggenheim-generated exhibitions pass through the Berlin branch. Because of a lack of funds in New York, some even originated at Unter den Linden. While Jeff Koons had supplied a 10-year old flower puppy to Bilbao, for Berlin he produced a new series of images with the appropriate title »Easyfun – Ethereal« which, in Thomas Krens’ words, »reflects deeply upon the complex concerns of Western culture.«

This evaluation of »Easyfun – Ethereal« and the attendant financial rewards may have been behind the most spectacular curatorial endeavor of Krens, a 1998 exhibition with the ambitious title »The Art of the Motorcycle.« It filled the entire rotunda and drew unprecedented crowds to the museum. It was a box-office hit. BMW was the sponsor of the extravaganza. In a press release the company explained: »BMW’s contribution to this exhibition... goes far beyond the mere provision of objects – BMW is dedicated, rather, to the combination of art, culture and technology in the more general sense. For this exhibition corresponds perfectly to the Company’s motivation and commitment to culture: BMW wants to make a contribution towards new perspectives of the works, towards a new perception of everything around us.«

In the same year, an earlier and ongoing relationship with the German/Italian men’s fashion house Hugo Boss was complemented by a Gucci-sponsored event staged by Vanessa Beecroft with women. For two hours, fifteen female models were showing off Tom Ford-designed Gucci rhinestone bikinis and high-heel shoes. An additional five models were stripped bare by their Beecroft even, wearing nothing but Gucci shoes. In 2000 this baring of all had a full-dress sequel: »Giorgio Armani,« curated by the Arte Povera expert and founding director of the Prada Foundation Germano Celant. The allegation that Armani’s pledge of $15 million to the Guggenheim had something to do with this venture is strenuously denied by the Museum. The show’s official sponsor was In Style magazine, a Time Warner publication. The lavishly appointed fashion showroom on Fifth Avenue and later also that at the Guggenheim Bilbao were both designed by Robert Wilson, as were the halls of the Neue Nationalgalerie in Berlin when it played host to the roving Armani extravaganza.

»The Art of The Motorcycle« traveled, together with the Guggenheim Motorcycle Club, to Las Vegas. In 2001 they were the opening attraction in one of the two new Guggenheim branches at the Venetian Resort-Hotel-Casino. The Museum’s director of communication Ben Hartley had fittingly clarified the museum’s mission: »We are in the entertainment business and competing against other forms of entertainment out there.« The Casino-Hotel had paid for the two Koolhaas designed museums, made other undisclosed contributions, and let the Guggenheim share in the operating income – and the losses - at a 51 percent rate. Accompanying the move to the gondoliers in Las Vegas, Krens had entered into two new partnerships with financially pressed European museums, the Kunsthistorisches Museum in Vienna and the Hermitage in St. Petersburg. Their ostensible common purpose is to mount shows from their respective collections in Las Vegas, Bilbao, New York and in Venice/Italy, occasionally sponsored by Deutsche Bank. In addition, Krens signed an agreement with the Hermitage for developing joint projects in St. Petersburg. Next to the Hermitage’s director Mikhael Piotrovsky, a key figure in this relationship is Vladimir O. Potanin who was elected to the Guggenheim board in 2002. He is the board chairman at the Hermitage and also the chairman of the board of directors of a newly created Hermitage-Guggenheim Foundation. The inaugural exhibition of works from both museums in the Hotel-Casino “Masterpieces and Master Collectors” was sponsored by the Interros Holding Company of Russia of which Vladimir Potanin happens to be the president. When Potanin was not yet 40 years old, Forbes ranked him in 1998 the wealthiest man of Russia and the 186th wealthiest of the world. Many questions have been raised about how the young man amassed a fortune in less than 10 years of the privatization of state-owned properties that was estimated in 2002 to be worth 4 percent of Russia’s Gross National Product. Belonging to his Interros empire are Norilsk, the world’s largest producer of nickel and palladium, and a major producer of platinum, copper, cobalt and gold, as well as large banking and media interests, including the national newpapers Izvestia and Komsomolskaya Pravda. They are considered to have played a role in Boris Yeltzin’s election. Perhaps observing the fate of his fellow oligarch Mikhail B. Khodorkovsky of Yukos, Potanin is currently viewed as discreetly supporting Vladimir Putin. His PR office made it known that he had donated one of four versions of Malevitch’s »Black Square« to the Hermitage. His answer to a reporter’s question how much it costs to be a Guggenheim trustee was »$2.5 million spread over five years.« If true, it would be a rather modest entrance fee.

By the end of 2002, in spite of the global maneuvering of many years, the Guggenheim house of cards was close to collapse. Krens had recklessly leveraged the Museum’s future. Again and again he had to dip into the endowment to cover operating expenses. Peter Lewis, the Guggenheim chairman read Krens the riot act. He publicly humiliated Krens and threatened to fire him if he didn’t shape up. Lewis accepted part of the blame as board chairman. In exchange for giving an additional $12 million to pay outstanding bills and service the Museum’s debt, he demanded a drastic reduction of the budget to half of what it had been. Staff positions dropped from 391 to 181, major exhibitions were postponed and hours were reduced. In due course the idea of another Gehry museum building in downtown New York was abandoned, as was an online commercial enterprise. Following the closing of the SoHo branch a year earlier, also one of the two Las Vegas branches, the motorcycle showroom, was shuttered.

The Guggenheim Museum’s trajectory is full of ironies, from »Black Square« via Red Square to Venice - real and fake -with deep mining, the murmur of »The Spiritual in Art« and the roar of a motorcycle gang in the background.

There was a good deal of schadenfreude among the peers of the Guggenheim director. The adulating coverage he had enjoyed by the press earlier turned into sneering »we always knew it« - commentary. However, boards of trustees and officials in charge of public moneys still consider him a guide. Less flamboyantly than Krens but as determinedly many of his peers are expected to pursue similar strategies to turn cultural capital into monetary capital. Some museum administrators do so out of conviction. The effect on »The Good, the True and the Beautiful« to which they all have pledged their allegiance is either ignored or written off as collateral damage.

Lecture given at the conference »Learning form the Guggenheim«, Center for Basque Studies, University of Nevada, Reno, April 22 – 24, 2004

© 2004 by Hans Haacke

 

 

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