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A question about authenticators...

Here's a question bound to stir up some more controversy on this site. I suppose the best way to put my question forth is by way of example:

Dealer Joe Schmoe provides his time to PU Authenticators, a publicly held firm, by viewing historic artists' autographs on their behalf. His job is to determine whether an item is authentic or not. When he "passes" an item, the owner is charged a fee by PU and in turn receives a certificate signed by Schmoe. In exchange for his services, Schome is allowed to authenticate his own material, and sign his own PU authentications on the same form that the company uses for all other authentications.

On a regular basis, Schmoe consigns his own material to B&O Auctions. His lots are sold bearing his own signed PU certificates of authenticity, and bidders are of course unaware of the fact that Schmoe is both the owner and authenticator of these lots. They auction house boasts that the item has been examined by an independent third party authenticator.

I have to ask myself about the propriety of this kind of situation. B&O Auctions claims it is offering "third-party" authentications, when in fact it is the consignor who has authenticated his own material: he's not wearing his "PU Authenticator" hat when he sends the material in for auction. This places an awful lot of power in the hands of the consignor/authenticator, and in my mind, temptaion beckons and any impartiality could easily go out the window.

Some may fault me as a hypocrite, as a small fraction of material in Alexander Autographs auctions is owned by the firm. The distinct difference is that we acknowledge that we alone authenticate 99.5% of the material consigned to our auction, and in any event ownership is never an issue.

What say you?

Tags: Alexander, authentication

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Comment by Bill Panagopulos on December 4, 2010 at 6:10am: Travis -

You'll notice I didn't touch the issue of conflict of interest. I've always had a problem with independent dealers authenticating material in auctions in which they offer their own inventory. If they happen to have a bone to pick with a particular consignor, they're free to do so by way of rejecting that consignor's lots as they please.

Getting back to the above subject, it's a matter of ethics on the part of the auction house. They could insist that another authenticator PU Authentications (or even elsewhere) examine the item.

Finally, there are some chilling elements to your comment. I keep hearing that same theme: those who don't fully support third party authenticators are "friends of the forgers". Anyone spouting that could only have been educated at Dr. Goebel's Ministry of Propaganda.

Comment by Richard S. Simon on December 4, 2010 at 6:34am: "Many a small thing has been made large by advertising."
Mark Twain
Hmm,, who would I apply that to in this hobby?

Comment by Richard S. Simon on December 4, 2010 at 8:22am: Very good points Bill.
If anyone is familiar with the Bill Daniels/Mastro Auctions (and the involvement of PSA) case they know that Bill speaks directly to the problem.

Comment by Bill Panagopulos on December 4, 2010 at 8:29am: The silence here is deafening!

Comment by Richard S. Simon on December 4, 2010 at 3:50pm: Thanks Travis for your kind words.
I should make it clear though, that my primary business is buying and selling. And I am still a collector.
BTW - thanks Bill for that fine autographed photo of Edward R Murrow I just got from you. He is one of my heroes and I have been looking for something nice signed by him for a long time.
I do a small amount of authenticating.
I know there are some who consider that a conflict of interest.
However if you send me a Thurman Munson autograph and I tell you that in my opinion it is not authentic, the next thing I say to you WON'T BE "wanna buy my Thurman Munson?" That to me would be a conflict of interest. I don't see any other instance of conflict of interest in what I do.
Most of the authentication that I do comes from people outside the organized hobby who have an item or two and realize that my rates are much more economical than my heavily advertised competitors and that my knowledge and honesty is unquestioned.
My entire advertising of my authentication business consists of a couple of pages on my website, explaining my experience and illustrating the work I have done for two government agencies, the Nassau County District Attorney and the NYC Dept of Consumer Affairs. My work with the DA resulted in a guilty plea and my work the the Dept of Consumer Affairs resulted in a number of ebay sellers being thrown off and the results of that investigation were forwarded to the FBI during Operation Bullpen. The NYC Dept of Consumer Affairs investigation was commended by the FBI in their public report of Operation Bullpen.

Comment by Bill Panagopulos on December 5, 2010 at 6:54am: Of course, Richard, you know you certainly don't fit the picture I painted above.

I have to also point out that I believe I personally know 80% of the third party dealer/authenticators out there - I like to think that we are friends and I know that they are absolutely competent in their fields of expertise.

I bring up this point because somewhere, someday, some auction house is going to get caught with its pants down. I'm absolutely convinced it won't be with the people I know, but it will happen. And it will be a serious black eye for the auction house AND the authenticator.

Comment by Bill Panagopulos on December 6, 2010 at 1:27pm: No DB, no Livingston, no Cyrkin, no authenticators, no auctioneers...just crickets.

Comment by Lou reves on December 6, 2010 at 7:15pm: Yes its like my post about the UACC and AACS they didnt want to say anything there either? Makes me real worried about most UACC registered dealers, present company excluded Bill!

Comment by Steve Cyrkin, Admin on December 6, 2010 at 9:48pm: Louie, you emailed me about AACS before you posted your blog and I told you I had problems with AACS's inventory and recommended you contact Mike Hecht at the UACC, so I didn't think I had anything to add to your post...sorry. I'm not an active dealer at this point, so I didn't feel I should reply as a UACC dealer. But I do feel strongly that they should remove them as a Registered Dealer and I have suggested so to them in the past.

The UACC is an excellent organization, but the rules of their Registered Dealer program state that they only act on complaints from collectors that are UACC members.

Comment by Steve Cyrkin, Admin on December 6, 2010 at 10:09pm: Bill, I was away this weekend and I've been busy and only getting to your blog now. I like your post, and suggested you post it--it's an important discussion.

I don't think it's reasonable to characterize it like this, though, since it's not accurate:

"In exchange for his services, Schome is allowed to authenticate his own material, and sign his own PU authentications on the same form that the company uses for all other authentications."

PSA/DNA and JSA do not "pay" consulting authenticators by letting them authenticate their own material. While I do think it's true that they may render opinions on their own material in categories they're specialists in there is no such carte blanche arrangement.

Now on the meat of your post, while I find it highly unlikely that reputable authenticating consultants would call their questionable items authentic and place them in auctions, I do think that the auction houses should do one of two things:

1) Auction houses should have a clearly visible notice that their authenticators may place items they participated in the authentication of in an auction. and/or

2) Note on any such lots when an authenticator with a financial interest in a lot participated in its authentication.

On a related issue, I don't think that an auction house needs to say if an item in the auction is owned by them, unless they say that their auctions only consist of consignments.