As the financial world unites to launch powerful sanctions against Putin’s oligarchs, the art auction season has begun in London as if nothing has changed. On Thursday, Phillips – the Russian-owned auction house – will hold a 20th Century and contemporary art auction where a three-picture series by artist Francis Bacon is expected to fetch up to $73 million. Matthew Girling, the former CEO of Bonhams, a competing auction house, told The Art Newspaper that people should boycott Phillips over its Russian links. Phillips is owned by Mercury Group, which is Russia’s largest luxury-goods company. It was founded in 1993 by Russian entrepreneurs Leonid Fridlyand and Leonid Strunin, who are reportedly close to Putin. Phillips has said it doesn’t expect sanctions to affect its business. Neither Fridlyand nor Strunin is on a US or UK sanctions list and Phillips told The Art Newspaper it wouldn’t do business with anyone who was on a sanctions list. Still, doing business with any powerful company based in Russia is “outrageous,” Andy Hall, a retired hedge funder, oil trader, art collector and philanthropist told The Post. “Some people say they don’t want to mix business and politics, but that’s ridiculous,” Hall said. “Even Exxon is pulling out of Russia — which it didn’t do when Russia invaded Crimea. All bets are off now. The art world is delusional if it feels it can escape it.” Hall, whose collection of more than 5,000 pieces includes noted works by Ed Ruscha, Barbara Kruger and Julian Schnabel, told The Post he bought something from Christie’s – another competing auction house – on Wednesday, but wouldn’t buy from Phillips. Girling, the former Bonham’s CEO, said that “only a boycott” would get the attention of the owners of Mercury to hopefully influence Putin to change his current chosen course of action.” “We have seen how the world of banking, travel, leisure, sport and culture have responded to the crisis,” he told The Art Newspaper. “Can the art market simply ignore it and carry on as normal?” Russian banks have been virtually cut off from the world financial system when they were unplugged from the SWIFT payments apparatus. Russian teams have been excluded from world sporting competitions and oligarchs like Roman Abramovich are seeing pressure to sell their teams. (Abramovich said Wednesday that he’d sell the Chelsea soccer team in the UK.) But like real estate, the art market has received temporary exemptions from anti-money laundering regulations in the US for the past two decades. It is also the world’s largest unregulated market – and it has become a powerful weapon for Putin’s oligarchs to launder billions of dollars. “Art markets are the perfect way to move money and not trace beneficial ownership,” Louise Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University told The Post. That’s because oftentimes bidders are shrouded in secrecy and store their physical assets – and thus any trace of ownership – in clandestine, off-the-books locations. “Therefore, allowing this to go on when the UK is trying to tighten up its financial system shows a lack of commitment to close the loopholes,” Shelley said of the Thursday auction. Phillips’ CEO Stephen Brooks posted on social media that the auction house “unequivocally condemn[s] the invasion” of Ukraine. The company posted a Ukrainian flag on its Instagram page. But some art watchers say that’s not good enough. “Anyone involved in this auction has blood on their hands,” one outraged art consultant who did not want to be named told The Post. Meanwhile, Hall said that even if people didn’t want to boycott Phillips for moral reasons, practical reasons should stop people from placing bids: Auction houses could freeze bank accounts associated with a Russian-owned company, so money held in escrow, for instance, could get swept up in any sanctions. “Phillips runs a good operation, but so did German companies during WWII who were intimately involved with the Nazis,” Hall wrote on his Instagram account. “Will art buyers … show solidarity with Ukraine or will the art world display its usual hypocrisy?” Unofficially, senior Phillips folks are reaching out to investors like Hall to convince them to continue to do business with the auction house, Hall said. Many of the most high-profile works set to be auctioned on Thursday are by artists popular with Russians, like a 1980s triptych by Francis Bacon expected to fetch up to $73 million. That seller is starchitect Norman Foster. Also up for auction, according to London’s Telegraph newspaper, are five Monets from the collection of Daniel Snyder, the American owner of the Washington Commanders, formerly known as the Washington Redskins. Art consultants in London this week who did not want to be named, say they are busier than ever – although there may be fewer Russians buying. One director of Sotheby’s – another auction house – told the Telegraph that they were checking bulletins hourly to see whether any of their buyers and sellers were on any government sanctions lists. “I would not like to be the auctioneer this week,” one lead auctioneer told the paper. On Tuesday, Phillips launched a whisper campaign to let potential buyers know that their sellers are not on any sanctions lists or have any ties to Putin, according to people familiar with the matter. But the list is changing fast. Phillips, Sotheby’s and Christie’s are expected to generate more than $800 million in sales this week — up 35% from last year.
