NEA Advisory Panel OKs Grants to 2 Controversial Galleries : Arts: But the council puts off federal funding for two performers who explore sexual taboos and are targets of conservatives in the obscenity debate.

The advisory council of the National Endowment for the Arts voted to approve $155,000 in grants Saturday to two art galleries that sparked an ongoing obscenity debate last year, while postponing a decision on funding for two controversial performance artists in a new dispute over conflict of interest by NEA grant reviewers.

However, the actions by the National Council on the Arts appeared to have fallen far short of the panel’s apparent goal of mollifying NEA critics, both on the political right and among artists and arts sympathizers.

Top staff aides to two key conservative congressmen said any benefit was effectively offset by a new focus on longstanding problems of conflict of interest in NEA grant-making.

Observers from the offices of Rep. Dana Rohrabacher (R-Lomita) and Rep. Dick Armey (R-Texas) monitored the NEA meeting throughout the day.

The council delayed voting on federal grants for the two New York performance artists, Karen Finley and Holly Hughes, until their work is reconsidered by a new panel of their peers. The vote to ask the peer panel to reconsider the applications was 10 to 6.

Technically, the council voted to require a brand new grant review for five questioned grants, including those for Finley and Hughes. The new review will not be completed until November--long after the final expected vote on NEA bills in Congress this year.

David Chambers, a Yale School of Drama professor and chairman of the NEA’s top theater program policy panel, charged that NEA Chairman John E. Frohnmayer wanted to “corral anything that might be construed as controversial.”

Council member Harvey Lichtenstein, director of the Brooklyn Academy of Music, delivered an impassioned defense of Finley, a lightning rod of conservative criticism. “There is no way that one can comprehend art by reading about it,” Lichtenstein said of the controversy, which has been fanned by racy descriptions of Finley’s stage technique in the press.

“The only way to experience art is face-to-face,” he said. “Yes, she smears chocolate on her body. Yes, she puts gelatin in her bra. It was not obscene. It was funny. She was professional. She was adept.”

Artists and gay rights groups immediately accused the arts agency of manufacturing a “bogus” excuse to sidestep funding for Finley and Hughes.

An official of one of the art galleries that received new funding said the actions of the NEA advisory board--on which Frohnmayer has the final say--represented a “mixed message” to artists and the nation.

Votes on the grants came during a tumultuous, daylong meeting here in which gay rights and arts freedom demonstrators disrupted the gathering, carrying signs and chanting: “NEA do your part! We demand more homo art!”

More than a dozen demonstrators were removed by police, but no charges were filed. About 250 people marched outside.

Frohnmayer had little better luck in keeping peace on the council as factions clashed repeatedly. At one point, arts council member Phyllis Berney asked Susan Lubowsky, the NEA official explaining one of the grant proposals, “Is there an artist in this particular group who will immediately inflame the public?”

A flustered Lubowsky answered no, but Frohnmayer disclosed that he had personally screened the work of 10 artists to be included in the Awards in the Visual Arts show, apparently to make sure the selections were devoid of controversial work.

A total of $80,000 went to the Institute for Contemporary Art at the University of Pennsylvania, which last year organized a show of work by the late photographer Robert Mapplethorpe that resulted in the obscenity prosecution of a Cincinnati gallery. The show opened to new controversy in Boston last week.

The vote reversed a decision taken three months ago, in which the council withheld the money in an earlier ill-fated attempt to placate congressional opponents of the arts agency. The National Council on the Arts has advisory power within the arts endowment. Its votes are not binding on Frohnmayer, but are almost never set aside.

Another $75,000 was voted for the Southeastern Center for Contemporary Art in Winston-Salem, N.C., for the 1990 edition of an touring art show. Last year’s show was a center of controversy because it included a photograph of a crucifix immersed in urine.

Judith Tannenbaum, assistant director of the Institute for Contemporary Art, said the mix of grant votes by the 24-member presidentially appointed arts council “leaves it really ambiguous” in terms of what political or artistic message--and to whom--the NEA was attempting to send.

The conflict-of-interest issue led to the vote to ask a reconsideration of five of 52 grants proposed for funding in an NEA program that specializes in cutting-edge work. The action had been closely watched because Finley and Hughes were recommended for funding despite an earlier move by Frohnmayer to cancel grants to the two women and to California performance artists Tim Miller and John Fleck.

Two weeks ago, The Times reported that the five new grants were involved in a conflict-of-interest situation long troublesome to the NEA--in which grant review panel members are simultaneously also applicants for money. Frohnmayer acknowledged Friday that the situation needed correction and announced a new policy curtailing the practice.

Hughes had been proposed for a $15,000 grant through New York’s Downtown Art Co. for a production called “No Trace of the Blond,” in which grant panel member Ellen Sebastian is a collaborator. Finley was involved in a grant under which she and musician Jerry Hunt--a grant panel member--would create a new production.

Hughes, a lesbian artist who attended Saturday’s arts council meeting, contended the decision to defer action on grants for her and Finley “is a bogus thing. They (Frohnmayer and the NEA) are looking for a reason because they do not want to fund openly lesbian, gay art or art that deals with sexual politics.”

Staff writer Don Shannon contributed to this story.