Cruise Ship Art Auction Controversy

| July 18, 2008

Art auctions on cruise ships have become controversial for a number of reasons - caveat emptor, buying art is risky and expensive.

CruiseMates has written about many aspects of cruising we love; the great service, ease of travel and the gourmet food, for example. But we have also written articles such as "If We Ran the Cruise Lines" where we address things we would do differently if given the chance. In that vein, we wrote we would eliminate, or at least change, cruise ship art auctions.

On Wednesday, the New York Times ran an article about cruise ship auctions. When something gets big enough for the NY Times, it is time for us to give it a second look as well. In fact, we had already started this article last week, but the Times gave us a reason to move it up.

It turns out we are not the only ones who have trouble swallowing everything the typical cruise ship art auction dishes out. A web site, (www. is currently embroiled in a public fight with the company that has the right to provide the vast majority of cruise ship art auctions, Park West @ Sea, a division of Park West Gallery of Southfield Michigan.

How big is this business? Park West is privately held but the New York Times quotes owner Albert Scaglione as saying sales are about $300 to $400 million dollars per year - much of it from cruise ships. That is a LOT of money, but consider these auctions occur daily on about 90 different cruise ships. We have seen evidence that a ship can sell anywhere from $100,000 to $500,000 per cruise.

The main thing you have to realize is that these auctions are not for paintings. With a few very rare exceptions they sell prints - copies of paintings. The newer ones are made with a inkjet printer process called giclee (gee-CLAY), and the older ones are lithographs, etchings and other processes they had in the past for making multiple copies of art.

The term "multiples" is essential, because it defines the parameters of a run of prints. The run should be of a limited number and each print should have unique number. The edition number looks like this 138/250, which means print number 138 out of 250.

The more valuable prints are handsigned in ink or pencil by the artist, and ultimately what you are buying is a limited edition poster with an autograph. How much should this be worth to you? Depending on the artist, very much or very little. Salvador Dali, for example, is an extremely famous artist, but he hand-signed some 500,000 pieces of paper in his life-time. That tends to make each single edition less valuable.

The Controversy This controversy began when a number of people contacted, unsolicited by the web site, to ask about their cruise ship art auction purchases. Many cruisers had spent $30,000, some spent $75,000 or even more, on just one cruise. In most cases, they discovered later they had no idea what they were buying at the time, but had relied on the advice of the onboard auctioneers.

When these people contacted FineArtRegistry (FAR for short) they usually told very similar stories. The auction began with free champagne and they only saw the total price they had to pay after the bidding was over. Or sometimes the sales process took several days with the auctioneer inviting the guests to "private showings" in order to reinforce the idea of owning something you could not only love, but would also increase in value as time goes on. A work of art that loves you back!

Home again post-cruise, these people started researching their newly acquired treasures only to discover all that glitters is not gold. Many pieces they bought, according to online posts in FAR and other sites on the Web, were not as unique or valuable as they thought. In some cases they had paid 10 times or more what the piece would sell for on land today.

After receiving so many queries, FAR investigated the way these Park West cruise auctions are conducted and soon documented several procedural problems. According to FAR, Park West runs their cruise ship auctions in a manner that would never be considered legitimate in other land-based auction houses, such as Christie's or Sotheby's.

What differences between these cruise ship auctions and standard art auctions did FAR bring forth? I am paraphrasing here; exact details are in the FineArtRegistry article.

  1. Cruise ship auctions do not provide a detailed auction catalog with sufficient documentation about the pieces before the auction begins. Some of the artwork is on display, but there are no price estimates, documents of authenticity, appraisal figures or any other information provided to help the buyer identify and research the artworks before the auction begins.
  2. There is no preview of the contract of sale. Buyers only see the contract after the auction has been concluded and the time comes to settle the bids.
  3. The artwork is not consigned. In most art auctions the company conducting the auction does not also own the artwork for sale. If they have any financial interest in the pieces, that must be disclosed according to most state laws.
  4. Except in a small minority of selections, the specific artwork on display and receiving bids is not the actual piece being sold. In fact, the piece for sale is not even on the ship. Park West only guarantees the buyer will receive a reasonable facsimile of the piece on which they are bidding! In most cases the purchased piece will be pulled from stock at the Park West galleries and shipped to them when the cruise is over. According to FineArtRegistry, this practice violates the Uniform Commercial Code (U.C.C. 2-328).
  5. The auctioneer is not licensed as is required in most U.S. States. They are also independent contractors, which limits the liability of Park West.
  6. A certified, independent appraiser does not do the official appraisal for the pieces. The owner of Park West, Albert Scaglione, does them. While there are several certified art appraisers in the world, as well as books one can easily consult to see the approximate value of a given piece. Park West, which purports to be the largest art dealer in the world, does not use these sources. The owner, an engineer by trade, signs the appraisals. A NY Times article of July 16, 2008 compares this to a homeowner appraising his house as "It's worth $50 million, because I say so."
  7. People who sign up to participate in the auction are given a form that is actually a credit card application form. If they "win" a piece Park West puts the charge on the credit card instead of invoicing them. This credit card motivates the buyer to spend more, as it comes with a 5-figure limit and no interest charges for a year, but the buyer doesn't see the total costs until they get the credit card bill or the artwork arrives with an invoice.
  8. There are several charges added to the invoice which buyers are not made readily aware of during the auction (these are listed below).
  9. Many auctioneers misrepresent the value and investment quality of the art for sale. They refer to the pieces as highly collectable, bound to increase in value, and that it is being auctioned at a discount to the going price which can only be done because "they are at sea."

Additional charges; In one actual invoice on the FAR Web site we see each piece is assessed a "15% buyers premium" (whatever that is). Each piece delivered, even a "free" piece, is assessed a separate appraisal fee ($15) and a shipping and handling fee ($60) per piece. The free pieces are shipped rolled up, unframed. The purchased pieces are framed at an average cost of $150 per piece. Sales tax and an additional "in-transit" handling fee of $70+ are also added to the final total.

In this one invoice, the cost of the artwork "hammer price" was $7020, but the total invoice after added charges was an astounding $8344.51. In total, there were over $1300 in added charges.

In fact, these are only a few of many problems FineArtRegistry (FAR) says it has found with Park West cruise auctions. The articles on the site claim far more egregious problems that we go into below.

Caveat Emptor or "buyer beware" is definitely the operative phrase with Park West auctions according the CEO of FineArtsRegistry, Teri Franks. "Any knowledgeable art buyer would be appalled," she says.

The Actual Auction

I have personally attended art auctions on several ships, though I have never purchased anything. Here is a rundown on what I have seen along with information I read online in first-person accounts by people who purchased at these auctions.

The auctions start with free champagne offered to the entire audience. Those who wish to bid must fill out a form that asks a great deal of personal information such as home address, estimated income, etc. This is the credit card application from GE finance. No one can bid without completing this paperwork.

The auctioneer mumbles through the rules of the auction in a manner resembling the "world's fastest talking man."

Here is a video of a real Park West cruise ship auctioneer. At first I thought the sound was bad, but then I realized he is perfectly legible when he wants to be heard. The auctioneer is supposed to be reading the rules, but he skips right over some of them.

One of the rules that the auctioneer mumbles through is that Park West reserves the right to accept "shill bids." For those who are unaware, "shill" bids are previously arranged by the auction house and often used as "minimum" bids to get the ball rolling. According to posts left on message boards online, regular guests are asked before the auction to act as shill bidders during the bid process. They are rewarded with a gift, which ultimately may be delivered with an appraisal, taxes, shipping and handling fees -- about $100 total for an unframed poster in a rolled up tube. I saw people in the audience making bids for pieces while the auctioneer's assistant sat next them telling them when and how much to bid.

But what I did not know is that these could also be pre-arranged bids. Park West also allows guests to negotiate a price before the auction with the auctioneer. When he hears that bid the hammer goes down quickly.

Some states recognize the right of a seller to bid on his own piece if he does not feel the price is high enough, but it turns out Park West sets the opening price so high there is no reason to fear losing money. FAR estimates that the opening price for many pieces in cruise ship auctions is about 10 times the actual value the piece would receive in a land-based gallery on the same day.

Why the shill bids, then? It does make it more interesting and keep the crowd alive. But even though it is legal I personally wouldn't participate in any auction where I know I am bidding against the house.

The first painting is typically sold very quickly, often for an outrageous sum. The first painting of my auction fetched $12,450. However, I have no way of knowing if that is a real bid or not. Someone did shout out a bid for the piece, but reading off a "fake" bidding number and hitting the hammer as if it is a "final sale" makes it a shill bid.

The goal with the first painting is to show people how the auction works. As it turns out, this hammer action is not just for show, it is an integral part of the sale process where the contract sale price is set. I decided to follow the assistant and position myself on the opposite side of a bidder. Sure enough, that guest made a bid on the next painting. The assistant was definitely telling her when to make her move, and right after said "good job." That was when I snapped this picture:

The assistant told me right then that I was no longer allowed to take pictures of the auction. I didn't bother to ask her why not.

The Story Gets Deeper

Just what I have said so far should be enough to scare most people away from these auctions. But in fact the story gets far more complicated. Teri Franks, CEO of FineArtRegistry, has much more to say about Park West Galleries.

Teri told me FAR has helped about 100 people get full refunds for the art they bought onboard so far. Everyone who contacted the site has received one. However, Park West is also in the process of suing FAR for defamation and slander - a strange circumstance where they are honoring Teri and suing her at the same time. In fact, Teri tells me the FAR counter-suit will show Park West is behind this defaming web site about her. A whois search doesn't confirm it, but it is registered in Ontario, just across the river from Park West's hometown.

Teri says FAR is not the only source to be sued by Park West. Apparently many reporters who have dared to write articles or air similar news reports have also been sued. Most have either interviewed Teri or contributed articles to the FAR web site.

I have personally received a number of complaints about art auctions here at CruiseMates over the years, and a search on the Internet shows many more complaints on other web sites.

To be clear, Park West Galleries owns the art auction concession rights on Carnival, Holland America, NCL, Royal Caribbean, Celebrity and other cruise lines. They do not own the art auctions on Princess.

The Princess program got itself into very hot water a few years ago when it was discovered that their supplier was found to be making unauthorized prints and selling them online. Many of those prints also went onto Princess ships. To Princess' credit they contacted many buyers voluntarily to give refunds. That art supplier went to prison.

What was her crime? First of all, the value of any print is derived from its rarity, so printing beyond the limited edition number dilutes the value of each piece greatly. Secondly, the artist is supposed to be directly involved in the reproduction process, but she was not even telling the artists she was making more prints. Third, she owed royalties to the artists for every print she sold, but she was hiding her profits from them.

Let's be perfectly clear; Park West has never been charged with any such illegal practices. In addition, Park West has voluntarily refunded money to many consumers who said they felt misled by the auctioneer. Park West will say that they cannot possibly monitor every auction every day, and that is obviously true.

Shipboard auctioneers work on commission, and word is that they make a lot of money. An actual art history major wrote her experience with the Park West auctioneer training program in the FAR forums. She was turned down after a month of training because she didn't have the right "sales mentality."

She and two other former auctioneers-in-training posting in FAR made one of the darkest allegations about Park West, which I will not say I know to be true. I am only relating the controversy that is raging online.

An embellished print has real paint strokes added for a personal artistic touch - so they sell for far more than a simple printed lithograph or giclee. An embellished painting by Peter Max will sell for over $10,000, for example. These people said the company employs these people with art degrees to sign or embellish these prints -- instead of the original artist.

Here is the trick she describes; a poster with real paint flourishes added may be sold as "signed by artist" or "embellished by artist" but they don't say "signed or embellished by THE artist." There is no hard evidence, but she saw staff artists at the training facility with fresh paint on their hands and clothes all the time. It was never explained what they do there, and she concludes, "what else would they be doing there?"

The answer could very well be art restoration - a perfectly legitimate service Park West offers on its web site. Eyewitness accounts are notoriously weak, but it would be scandalous if it were true.

The Fight over Legitimacy of Dalí Prints

It gets FAR more complicated.

FineArtRegistry and other art experts say Park West appears to be selling Salvador Dalí prints with "fake" artist signatures. FAR also says that even if the signatures on prints are real the prices for authentic signed Dalí prints are much lower than the typical Park West auction price.

Park West, on the other hand, fully disputes these charges and has gone to great lengths to authenticate its Dalí collections. But this is difficult to do since Dalí works are often highly controversial, much of it caused by the artist himself.

Dalí lived until 1989, but he is said to have stopped painting in 1980 when his wife died. Giuseppe and Mara Albaretto of Turin, Italy claimed to have acquired a huge collection of works that had come directly from the artist. They couldn't supply proof of their origin, they said, because they were either gifts or pieces Dalí's sister sold behind his back when she needed money.

However, in 1987 Dalí signed a notarized statement that he "does not consider any of the opinions of the Albarettos regarding his work or its authenticity to have any value whatsoever."

Dalí also signed a statement qualifying Albert Field of New York as the official registrar of his graphic works, the sole keeper of record. Dalí worked with Field nearly until the day he died, a 40-year period. Once completed, Field's book became the world standard for authenticating Dalí graphics.

The Albarettos kept their Dalí collection private for many years, but finally decided to show it in Germany in 2000. Several art experts came to the showing and claimed to be appalled at the number of fakes. They cited the fact that none of them appeared in the Field catalog and that there were no contracts, receipts or documentation saying the works were by Dalí.

The German police, called in to investigate, also concluded the collection was mostly fakes, but the Albarettos returned to Italy and nothing further was done. They later produced a letter supposedly signed by Dalí saying they did have contracts for the hand-signed prints.

Unfortunately, upon investigation it was found the letter was dated from the 1960s but created on a typewriter and paper stock that did not exist before 1970. German investigators were finally able to enter the Albaretto home where they confiscated the obvious fakes which all could be traced to one publisher, Les Heures Claires. This company, it turns out, was created by Giuseppe Albaretto, which published a collection of prints called the Divine Comedy.

The Les Heures Claires publishing company is the source for many Park West prints by Dali, according to FAR and other experts. It is the origin of the Dali in my video.

Albert Field completely excluded the Divine Comedy works from his official Dalí catalogue, according to the New York Times. According to another web site created by Teri Fischer,, a statement of authenticity that Park West supplies for their Les Heures Claires Divine Comedy works does not include the name of the specific piece, so it could have been for any work.

The problem is, Dalí signed a lot of things. It is said that at one point in his life he signed countless blank pieces of paper that art publishers later used to make "signed" prints of some of his more famous paintings. It is estimated that there are a half million authorized and signed Dalí prints in the world, but the number of fakes worldwide is estimated at five million.

Jean Estrade Les Heures Claires is the origin of the Dalí in this video of a Dalí print at auction by Park West, appraised at $12,700 and sold for $10,200 after the auctioneer describes it as "very very very very very collectable." I would be interested in seeing what kind of reaction a land-based art dealer would have to this print. Here is an art gallery web site with a Jean Estrade Les Heures Claires Divine Comedy wood engraving, signed in pencil and in the block, for sale for $3530. Another site shows similar prints for about $3000 average.

Teri Franks and associate David Phillips took two Dalí "Biblia Sacra" prints, complete with Park West invoices and certificates of authenticity as hand-signed lithographs, to Ernst Schöller, a senior art fraud detective with the Baden-Wurttemberg state police in Stuttgart, Germany. In a video and article by Phillips, Schöller refers to the prints as "poster art;" photomechanical reproductions, not lithographs, and not hand-signed by Dalí.

Naturally, to protect their investment Park West Galleries has taken steps get these works further authenticated. They have hired two Dalí experts, Lee Catterall and Bernard Ewall to help them. Meanwhile, other Dalí experts say these men are only working with Park West for the money, and they are not true Dalí experts.

In a FAR article, Bruce Hochman, certified appraiser and proprietor of one of the largest Dalí-only galleries in the country, says of the signatures on some Park West Dalí prints "They're all the same. And we feel they're done with an auto pencil device." This is just one man's opinion, and it doesn't prove Park West did anything wrong if they were duped themselves, but Park West is also suing Hochman, according to Teri Franks.

In fairness, I must point out that any Park West detractor may have a stake in disputing any collection they don't own themselves. I must also say that FineArtRegistry is embroiled in other controversies not related to Park West Galleries.

Also for the record, Park West has already received one default judgement against FAR in their lawsuit because the company did not reply to a summons. Teri Franks, formerly a paralegal, says that she was not notified she was required to reply by "e-file" and that it was merely a technical oversight which she is in the process of appealing now.

Summing Up My video does not reveal anything that says it is not a true Dali, except that it does appear to have been printed by the Les Heures Claires publishing company owned by Albaretto. I am no expert, and perhaps that is the only problem. It is the experts who give people bad news, and that is my point. There is too much for a non-expert to know to be buying these prints with confidence.

My point in this article is not to paint Park West as anything underhanded. It is purely to point out the controversy surrounding their practices. My audience of cruise enthusiasts is exposed to these art auctions on a regular basis and I feel it is my duty to inform them of any controversial aspect of their cruise.

Art collection is a very tough business and such controversy alone is enough to devalue your investment, if indeed it is a real investment at all. I believe even Park West would say, "It is art, you buy it because you love it." But nothing is sadder than love becoming an expensive mistake.

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