Hammer Bids to Buy Back His USC Donation : Art: The industrialist’s unprecedented proposal is complicated by a dispute over a Rubens work USC loaned back to Hammer, who has ignored requests to return it.

In a deal museum experts say is unprecedented even among the sometimes tortuous relationships between art museums and wealthy patrons, controversial industrialist-art collector Armand Hammer is trying to buy back a collection of paintings he donated to USC 25 years ago.

But the proposal is complicated by the existence of a long-term dispute between USC and Hammer in which the university’s Fisher Gallery said it allowed Hammer to borrow back a Rubens masterpiece from the collection to hang in Hammer’s office at Occidental Petroleum Corp. in Westwood, only to have Hammer ignore numerous written requests that he return it.

Art experts said placing a total value on the Hammer-donated works would be virtually impossible without careful examination of records for each painting. USC said it would have the collection appraised prior to completion of any buy-back. The catalogue for the USC Hammer collection lists 49 paintings, though only a handful are considered notable.

Rubens experts said that the collection’s two paintings by the 17th-Century Flemish master--including the one Hammer has allegedly failed to return to the university--might together be worth $15 million to $30 million. When the gift was donated in 1965, the university valued the total collection at more than $1 million.

USC declined to discuss the dispute that began prior to Hammer’s offer to buy back his paintings, which was made about six weeks ago, USC said. However, half a dozen sources familiar with the situation said that Hammer’s refusal to give back the painting he borrowed escalated into a testy disagreement in which both Hammer and USC threatened litigation.

Christian Markey, USC’s vice president and general counsel, declined to characterize the difference of opinion. “I don’t think there is any dispute at the moment,” Markey said. “I really think what we’re dealing with is what I consider to be a reasonable proposal from a person who donated a number of paintings--an entire collection--to buy them back at fair market value.”

Asked what use USC planned to make of any money brought in by a selling off of art to Hammer, Markey replied: “None of your business.”

But Markey conceded there was at least “some discussion” over the disputed Rubens that hangs near Hammer’s desk in his private office in a high-security area in Occidental’s headquarters. “There were times in the past when (the situation) was not convenient,” Markey said. “I think there was some discussion about the Rubens.”

Selma Holo, director of USC’s Fisher Gallery, said that the university was willing to discuss the buy-back proposal, but she emphasized the proposition had not been accepted. “We are willing to discuss proper (disposal) of the collection by means of our established policy,” Holo said. The final decision would have to be endorsed by the gallery’s own advisory committee and the full USC board of directors, she added.

“If we do anything, we would do it right,” Holo said. “There have not been any decisions made.”

Frank Ashley, a spokesman for Occidental Petroleum who is also Hammer’s personal public-relations representative, declined to discuss the situation--including the disagreement over the unreturned painting and the buy-back offer.

USC said Hammer made the offer in a letter about six weeks ago, but neither USC nor Occidental Petroleum would release the text. The offer reportedly included no specific price, leaving financial questions to be resolved in an appraisal of the current market value of the collection.

The USC Hammer collection consists mostly of work by 15th- through 17th-Century Old Masters--primarily Italian, Flemish and Dutch painters, including examples attributed to Fra Filippo Lippi, Frans Hals and Van Dyck.

Rumors of the unprecedented proposed USC-Hammer buy-back deal began to circulate in museum circles several weeks ago. Across the country, art experts contacted unanimously agreed that the sell-off is unprecedented in American museums.

“I have never heard of anything like this. It is very strange,” said Sandra Horocks, spokesman for the Philadelphia Museum of Art. “When things are given to a museum, the donor gets a tax deduction and the art becomes part of the public trust. I think the public would be very unhappy if certain things that were (there for them in a museum) were no longer available” as a result of a buy-back deal with a wealthy donor.

“I have not heard of anything along these lines,” said Millicent Gaudieri, executive director of the New York-based Assn. of Art Museum Directors, which represents about 150 of the nation’s largest and best known galleries and museums. “This is rather precedent-setting.”

Sources familiar with the situation--including three people with direct knowledge of it, either from the perspective of Occidental Petroleum or USC--also said that the estrangement between Hammer and the university was so intense before the buy-back offer that Hammer demanded return of all of the artwork he had donated.

The Rubens Hammer borrowed between five and six years ago is “Venus Wounded by a Thorn.” The second Rubens in the USC Hammer collection is “The Nativity.” Old Master experts said the two works may have a combined value of as much as $30 million. The most money ever paid for a Rubens painting is $5.4 million, but the transaction, at Christie’s auction house in London, was in 1980. A Rubens drawing sold for $5.28 million last year.

Julius Held, an internationally known Rubens scholar, said that, while the two paintings have not undergone exhaustive authentication in recent years, the general feeling among Rubens experts is that they are genuine and significant examples of work from Rubens’ early career.

USC was not immediately able to provide the precise whereabouts of “The Nativity.” It was learned that some of the Hammer-donated paintings may have been hung in the offices of top university administrators over the years and that “The Nativity” may also have been loaned back to Hammer at some point. Many of the Hammer-donated works have not been on regular display in the university’s Fisher Gallery.

Sources familiar with Hammer’s position in the dispute said the 91-year-old oil company head had been angered that expectations he had for display of the collection were not met by USC. Specifically, Hammer is said to have become annoyed by what he perceived as inadequate conservation of the work and USC security practices.

These sources also said that Hammer had imposed conditions on the gift when he made it that obliged USC to hang the work in its gallery a certain portion of each year. The original 1965 gift of the bulk of the work was apparently made in the expectation that the Hammer collection would remain together, in its own display area, as well.

When the collection was donated in 1965, Hammer actually turned over title to only about half of the work, these sources said, following the initial announcement with annual actions titling a handful of additional works at a time. Eventually, formal title on nearly the entire collection of 49 paintings was conveyed to USC, but sources familiar with Hammer’s perspective said that some questions remain whether Rubens’ “The Nativity” had been legally conveyed.

USC counsel Markey said the university has asked for a legal opinion from the office of Atty. Gen. John Van de Kamp on whether there are any obstacles to the buy-back. Spokesmen for Van de Kamp said the attorney general’s office is not legally obligated to rule in advance on the proposed deal but may provide the advice voluntarily.

However, the art museum directors group said its current ethics code appears to raise questions about the ethical propriety of the buy-back. The association noted that neither the USC gallery nor the Armand Hammer Museum of Art and Cultural Center, under construction in Westwood, is a member of the organization.

In the museum world, disposal of unwanted or surplus items in a collection is called deaccession. The museum directors group’s code cautions that deaccession “requires rigorous examination” and that it “should be related to policy rather than to the exigencies of the moment, and funds obtained through disposal must be used to replenish the collection.

“The procedure for deaccession or disposal of works should be at least as rigorous as that for purchasing major works of art.”

Neither Markey nor Holo could provide an exact number of paintings included in Hammer’s donations to USC. Halo said USC is attempting to conduct a detailed inventory of the Hammer holdings and to find out if any of the work was donated with restrictions attached that might complicate any deaccession.

Much of the collection is seen by art experts questioned by The Times as, in the main, of inferior quality, more suitable to university academic use than to public display. In the past, the Hammer collection was criticized in art circles as including many lesser works by recognized masters, as well as some paintings of questionable authenticity--most notably paintings attributed to masters but executed by students or assistants.

Hammer has not publicly disclosed his reasons for wanting to repurchase the collection, though Markey said Hammer’s construction of his own museum is apparently a major factor. “The fact of the matter is I cannot read his mind,” Markey said of Hammer, “but the man is building his own museum.”

Hammer moved to construct his own museum facility in late 1987 after a falling out with the Los Angeles County Museum of Art over demands made by Hammer for preferential treatment of his holdings and over Hammer’s objections to the county museum’s decision to name galleries for which Hammer made large donations after donors other than Hammer.

Before that decision, Hammer had pledged to donate his collection assembled since 1965 to the county museum. But the independent Hammer museum has stumbled into serious difficulties of its own.

Two pending shareholder lawsuits seek to block Occidental from underwriting the museum. The California Public Employees Retirement System, which owns more than 2 million shares of Occidental stock, is seeking to join in the litigation with a court filing that demands that construction of the museum be abandoned and the Hammer art collection turned over to Occidental Petroleum. A judge in Delaware, where the shareholder suits are being heard, is expected to rule on the petition in the next few weeks.

And while construction has continued, Occidental Petroleum officials objected late last year to cost overruns that had pushed the estimated price of the building to nearly $80 million--$20 million to $30 million more than originally estimated. Occidental officials have since reportedly canceled many luxurious appointments in the planned museum interior and decided to open the facility without its auditorium, restaurant or library. The construction cost is now said to be projected at $58 million to $60 million.

The museum is next door to and physically connected to Occidental’s corporate headquarters at Wilshire and Westwood Boulevards.

One source familiar with the Occidental situation said Hammer decided to try to retrieve the USC collection for reasons that have not been made completely clear, but which apparently include a concern that his existing collection may be insufficient to fill the walls of the new museum once it opens later this year.

But other sources said the situation was not so clear-cut and said Hammer had moved against USC more out of personal pique than anything else. “This is Hammer,” said one source familiar with the situation, “doing his own thing.”