For many years, I’ve heard rumors that billionaires Leon Black and Ronald Lauder, two of New York’s most powerful art collectors and fellow trustees of the Museum of Modern Art, were buying trophy art together.
But as with so much in the art market, there was no way to know for sure. Until now.
This week, the U.S. Department of Justice released millions of files related to the Jeffrey Epstein investigation, and they offer a rare window into how the mega-rich manage their investments, including their art.
The convicted sex offender, who died of suicide in prison in 2019, was a tax and estate advisor to Black from 2012 to 2017. In that capacity, he oversaw the financier’s substantial art investments. As a result, thousands of emails and spreadsheets that passed through his possession are now public, and it is a gold mine of material showing how art and finance have become entangled in recent decades.
In those files, amid 961 mentions of Lauder, I finally found confirmation of him making several art acquisitions with Black. (A representative for Black declined to comment. Lauder’s rep didn’t immediately respond to my requests seeking comment. They have not been accused of any wrongdoing.)
Let’s dive in.
In 2015, Black’s art and collectibles represented more than half of his fortune, $2.8 billion of his $4.9 billion net worth, according to an analysis he commissioned. That is a staggering revelation about how one of the world’s most sophisticated investors was deploying his financial resources. His almost 1,000 art assets included Chinese bronzes (worth about $330 million!), walking sticks, and a world-renowned collection of works on paper, led by masterpieces by Raphael, Leonardo, Rembrandt, and Michelangelo.
The documents identify which entities owned them at the time and note promised gifts to museums (the Metropolitan Museum of Art, the National Gallery of Art, MoMA).
A Christie’s employee with Ja-Was?-Bild (1920) by Kurt Schwitters during a press preview in London in June 2014. Photo by Justin Tallis/AFP/Getty Images
Three works were jointly owned (50/50) by Black and Lauder’s New York museum, the Neue Galerie, according to the documents. They are a Max Beckmann painting, Self-Portrait with Horn (1938), an Ernest Ludwig Kirchner carved wood figure, Stehendes Madchen Kantatide (1910), and an iconic Kirchner canvas, Berliner Strassenszene (1913–14). Black paid a total of $31.6 million for the three, according to the internal spreadsheet. In 2016, Christie’s appraised them at $93.5 million.
A fourth work, a 1920 assemblage by Kurt Schwitters, was co-owned by Black and Lauder through a company named Friends Ventures LLC.
Lauder and Black share a love for fin de siècle Viennese and German Expressionist art, the Neue Galerie’s focus. A person who once visited Black’s Park Avenue apartment on Manhattan’s Upper East Side told me this week about a striking bathroom there that was filled with drawings of water serpents by Gustav Klimt and exquisite works on paper by Otto Dix and Egon Schiele.
“It was like a miniature Neue Galerie,” this person said.
The joint art purchases by Lauder and Black date to as early as 2001, according to the Epstein files.
The documents show that Epstein helped set up Friends Ventures LLC in 2014 so that Black and Lauder could acquire that 1920 Schwitters, Ja-Was?-Bild (‘Yes-What?-Picture), which is made of oil, paper, corrugated card, cardboard, fabric, wood, and nails on board. It’s an early example of Schwitters’s “Merz” works, the constructed relief paintings that established him as a radical figure.
Ronald Lauder, left, and Leon Black, at the Museum of Modern Art in 2017. Photo: Katya Kazakina
The work that the two men bought through the LLC came up for sale at Christie’s in London in 2014 (its first auction appearance), consigned by the heirs of German collectors Viktor and Marianne Langen. They won it for £13.9 million ($23.7 million), well above the work’s presale estimate of £4 million to £6 million, a result that was 10 times the artist’s previous auction record of £1.3 million ($2 million), Artnet News reported at the time.
An early draft of the Friends Ventures agreement in the files states that Black and Lauder would take turns holding the work for two years at a time. The two billionaires would “flip a coin” to determine who got it first, the draft said. Later, the duration of each possession was changed to two-and-a-half years, starting with Lauder. Black had estimated that it would “be that long before his new townhouse is ready,” Heather Gray, the art counsel for Black’s family office, wrote to Epstein in an email in September 2014.
Emails show that Epstein advised the partners to pay a use tax instead of a sales tax, presumably to save money. Another discussion concerned what would happen to the artwork when one of the partners died and how much time the survivor would have to decide whether or not to buy it, then pay the other’s estate.
Notes indicate that Black wanted a clause requiring that, if the estate of the surviving member didn’t want to buy the work, there would be a “forced sale,” according to another email from Gray, who wrote that “Leon wanted to specify that the company will sell the Property through one of the major auction houses.”
Christie’s auctioneer Christopher Burge taking bids on Ernst Ludwig Kirchner’s Berliner Strassenszene during a Christie’s evening sale in November 2006. The painting sold for $34 million. Photo: Timothy A. Clary/AFP via Getty Images
Searching the database for jointly owned works, I discovered an earlier agreement that details the Neue Galerie selling a 50-percent stake in Kirchner’s Berliner Strassenszene to Black.
The Neue Galerie bought the painting—of a Berlin street scene with flamboyant male and female figures against a pink background—for $38 million at Christie’s in 2006, shortly after it was restituted to the heirs of the Jewish shoe manufacturer Alfred Hess by the Brücke Museum in Berlin. The price surpassed the presale estimate of $18 million to $24 million. It remains the auction record for the leading German Expressionist artist.
Signed by Lauder and Black in 2007, the agreement gives the Neue Galerie and Black alternating six-month periods to “possess, display and use” the work.
Another jointly owned work is the Kirchner sculpture, Stehendes Mädchen, Karyatide (Standing Girl, Caryatide), 1910, which sold for $2.7 million at Christie’s in 2006. Black paid $1.35 million for his 50-percent stake in the work that same year.
Max Beckmann’s Self-Portrait with Horn (1938) in October 2016, during a press preview for the exhibition “Max Beckmann in New York” at the Metropolitan Museum of Art in New York. Photo: Thomas Urbain/AFP via Getty Images
Beckmann’s haunting Self-Portrait with Horn (1938) went for $22.6 million at Sotheby’s in 2001, then an auction record for the artist, and more than double its $10 million top estimate. Black paid $11.3 million for his 50-percent stake, starting in 2001, according to the documents.
In 2008, the painting inspired “Max Beckmann: Self-Portrait with Horn,” a show “focusing on one of the greatest, most resonant paintings by the German Expressionist artist Max Beckmann (1881-1950),” the Neue Galerie announced at the time. It was identified as being owned by “the Neue Galerie New York and Private Collection.”
In 2016, Epstein prepared a presentation on Black’s trust that states:
“It is assumed that on Leon’s death (i) Ronald Lauder will purchase Leon’s 50% interest in Friends Ventures LLC (which owns the Schwitters: Ja-Was?-Bild) for $12,500,000, and (ii) the Neue will purchase Leon’s 50% interest in two Kirchner works (Berliner Strassenszene and Stehendes Madchen, Karyatide) for $26,750,000, and in the Beckman: Self-Portrait with Horn for $20,000,000.”
Have the two friends bought more works together, in the decade since Epstein stopped working with Black? There have been auction fireworks for lots that suit their tastes. It’s tempting to speculate.
