If ever there was a time for the “big two” to flex their collective political muscles, the pending New York State bill prohibiting sham bids by auctioneers is their moment of truth. They have boards of directors that are designed to influence and lean on both political and financial institutions that threaten their way of operating, as they should. But here is where the weakness and limitation of dealers and their organizational representative is revealed.
The case for the legislation to protect bidders is a no-brainer. The fraud of phantom bidding is perpetrated at all auctions, with the goal to deceptively keep the bidding alive and moving upward. The potential for radically altering their business model by taking away this method of trickery could possibly lead to further restrictions on their way of operating here and abroad. The duopoly’s greatest fear is that this legislation could be a precedent in other states and countries, and greater scrutiny of their conflicts of interest, collusion, and manipulation of both buyers and consigners could be exposed.
In my blog on March 6, 2007, I cited my sales tax incident with Christie’s, a qualified New York State sales tax vendor, who was able to quash an opinion by the New York State Sales Tax Department that required them to give me, a consigner, their resale certificate for selling my merchandise. This kind of political power is honed and flexed when they have to blunt a threat to their self interest not to comply. That is why they are a duopoly; only Sotheby’s and Christie’s have the financial and legal ability to coerce and intimidate politicians and political structures.
In case you didn’t know it, Sotheby’s newest board member is Diana Taylor, Mayor Bloomberg’s companion and former New York State Banking Superintendent of Banks.
I’m a big fan of Mayor Bloomberg, but her presence as a representative of Sotheby’s interests on this issue could have a big influence on the thinking of State representatives, and is revealing example of their methods.
To counter this, dealers and their self serving representative organizations are mute and are too timid to vocally and politically beat the drums to support the initiative now before the legislature. Any dealer who is a member of one of these organizations should be embarrassed and disillusioned with their representation on this piece of legislation. After all, what is the purpose of these organizations if they can’t represent your interests? I have seen this for years, going back to the mid 1970’s when dealer organizations capitulated to the auctions over the establishment of the buyer’s premium. From that episode I never found them of any use or seen them take the lead on any productive industry ideas. The alternative is for individual dealers, collectors, and consumers in general to take the initiative to write letters to your representatives voicing your concern and support for the bill.