Is The New Jersey Symphony Missing The Point?

At the early part of last week, the New Jersey Symphony Orchestra announced that they would conduct an internal inquiry into the NJSO’s purchase of philanthropist Herbert Axelrod’s “Golden Age Collection” of historic stringed instruments.

question markI spoke to Scott A. Kobler, Esq, a member of the NJSO’s Board of Trustees and executive committee member, on the telephone last Tuesday, August 17th, 2004.  Mr. Kobler was one of the board members directly involved with Axelrod instrument purchase for over two years.  I asked Scott why the NJSO decided to initiate an investigation and he said,

“If I had ten hours to tell you everything about the process I’m certain that you would say ‘Scott, you guys did the right thing’, but I don’t have ten hours right now.”

I have to say that I was legitimately disappointed Scott wasn’t able to talk to me longer about the investigation and the original purchase process.  I have many questions I would like to ask him.  However, Scott was able to contact NJSO president Simon Woods and arrange for him to talk to me about the investigation.

I received a call from Simon a few moments after my conversation with Scott and I learned that the NJSO investigation will only focus on the process of acquiring the instruments but not touch on anything having to do with the value or authenticity of the instruments.

Simon also confirmed that the NSJO will not use any outside investigators or consultants to assist the investigation. The final report will be made available to the public in after its completion.

A few days after my conversation with Simon, I received this official statement from the NJSO Director of Communication, Philip Leininger:

“The New Jersey Symphony Orchestra has established a 3-member panel to conduct an internal inquiry into the NJSO’s purchase of philanthropist Herbert Axelrod’s “Golden Age Collection” of historic stringed instruments in February of 2003.

The members of the panel are: NJ Assemblyman Bill Baroni, Alan Danzis (President of Danzis Associates, Inc., an information technology Consulting firm), and John Forrest (Group Vice President, Finance and Administration at National Starch & Chemical Co.)

Alan Danzis and John Forrest both joined the NJSO Board subsequent to the acquisition of the instruments. Assemblyman Baroni has been on the NJSO Board since 2001 but had no direct involvement with the instrument acquisition process.

The panel will start work immediately, and will issue a report at the conclusion o the process. The panel will keep all information it gathers in confidence until the final report is issued, and there will be no further comment until that time.”

Let’s move beyond the obvious question of “can an investigation into the purchase of the instruments be truly impartial if it’s being conducted by NJSO board members who are also responsible for the well being of the organization?” and the obvious conflict of interest this creates.

Instead, let’s focus on what this investigation isn’t doing; addressing the issue of authenticity of the instruments.

In my telephone conversation with Mr. Kobler, he stated “who would be surprised to learn that parts of a 400 year old violin may not all be original?”

Well, I can think of at least one individual, or at least, one group of individuals that should be interested: the NJSO’s insurance company.

According to Simon Woods, the instruments are insured by Chubb Corp, which is headquartered in Warren, New Jersey.

Representatives from Chubb declined to comment on any issues dealing with the NJSO’s “Golden Age” collection.

So I contacted the Dan Schoenfeld, President of the largest insurance firm dedicated to the needs of musicians worldwide; Clarion Associates Inc.

Drew McManus: How insurance companies go about determining the value of an instrument?
Dan Schoenfeld: We typically have the instrument owner go to an expert appraiser and then that appraiser provides them with an official document that lists their assessment of the instrument’s value.  In some cases we request multiple appraisals.

Drew McManus: How does Clarion differentiate between one appraiser and another?
Dan Schoenfeld: We maintain a database of appraisers across the world and new appraisers can also fill out an application to be considered as an appraiser in our database.

Drew McManus: Has Clarion had ever challenged an instrument’s value when a claim is made?
Dan Schoenfeld: We have denied claims under certain circumstances, and in the case of string instruments we regularly ask for reappraisals ever few years since their value fluctuates on a frequent basis.  But we typically don’t require appraisals after the fact.

Drew McManus: What sort of conditions would warrant Clarion to ask for a special reappraisal outside of regularly scheduled reappraisals?
Dan Schoenfeld: If we have reason to believe the value of the instrument was intentionally inflated.

Drew McManus: Would a situation such as the Axelrod instruments purchased by the NJSO prompt your requesting a reappraisal?
Dan Schoenfeld: We would probably want to reappraise instruments that were involved in a scandal like that.

Drew McManus: Has Clarion ever insured an instrument owned by Herbert Axelrod?
Dan Schoenfeld: To the best of my knowledge I don’t believe we’ve ever insured any of Axelrod’s instruments in the past.

The internal investigation being conducted by the NJSO currently has no time frame and no intention to examine the appraisal and authentication process of the Axelrod instruments.

But if the NJSO’s insurance company becomes concerned they may very well be the only party with some enforceable clout to push the orchestra into having the instrument collection reappraised.  And it wouldn’t be surprising if they dictate which appraisers need to conduct the assessments.

And if that comes to pass, the final decisions regarding value and authenticity come down to consensus; a topic I’ll cover in more detail later in the week.

But whatever the investigation panel’s findings determine, those results simply can not be accepted as impartial or conclusive.

Given the nature that the vast majority of the funds being used to purchase the violins are going to come from public donations and government sponsored financial support, the orchestra owes it’s donors, patrons, musicians, managers, and board members an impartial investigation into the due diligence process.

Additionally, the NJSO should also be obligated to conduct a comprehensive reappraisal to accurately value and authenticate the collection.

Anything short of those steps constitutes willful negligence.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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