Director Revived Museum; Did He Also Ransack It? : Art: Former official, now under arrest, denies selling items from the Southwest Museum for personal gain.

Marvin Cohodas looked at a photograph of an American Indian basket in 1983 and knew he had seen the artifact before.

As an expert in basketry of the Washoe--a small, ill-fated tribe that once lived in the Lake Tahoe area--Cohodas had seen thousands of baskets. The picture had been sent to him by a private collector contemplating a purchase.

But this basket should not have been for sale.

Cohodas was sure he had seen it six years earlier at the Southwest Museum in Los Angeles, a stucco fortress that towers above the Pasadena Freeway on Mt. Washington.

He had a hunch that something was wrong.

That hunch would lead to years of intrigue and an FBI investigation that was to rock the American Indian art world.

Earlier this month the former director of the Southwest Museum, Patrick T. Houlihan, was arrested and booked on charges that he improperly removed items from the museum collection and sold or traded them for personal gain.

Prosecutors charge that while he was museum director from 1981 to 1987 he took not only baskets, but rare paintings, elaborately decorated garments, kachinas, pots and blankets. Museum officials, who have filed a civil suit against Houlihan, believe he took as many as 127 items. The total worth, according to appraisers, is almost $2.5 million.

The effects of the investigation went far beyond the venerated museum, long a favorite of visiting scholars and schoolchildren on day trips. It involved so many items, only about one-fifth of which have been recovered, that the “Missing Art Alert” list of them put out by the International Foundation for Art Research was the biggest in the foundation’s 23-year history.

Items were found in 12 states, Mexico and Canada.

“There was probably not a dealer or collector in the country that was not touched by this in some way or the other,” said Malcolm Grimmer, a dealer in American Indian art based in Santa Fe, N.M. “Each item probably went through two or three dealers before it finally found a home.”

The sales passed through such a complex network of buyers that prosecutors admit they had a hard time building a case. “It involved boxes of documents that had to be checked again and again to try and figure out what happened to these items,” Deputy Dist. Atty. Alexis de la Garza said.

“Up until a few weeks ago, we were not sure we would prosecute.”

Houlihan, who pleaded not guilty to all charges and said that any sales or trades he made out of the collection were to benefit the museum, is now executive director of the Millicent Rogers Museum in Taos, N.M.

His crowning achievement had been the transformation of the once-dowdy Southwest Museum into a vibrant, state-of-the-art institution valued by scholars worldwide. His achievements were celebrated not only among academics but also in the press and among critics.

Indeed, he failed in only one area during his tenure at the museum. Try as he might, Houlihan was never able to bring the Southwest Museum into the limelight.

Ironically, the theft and embezzlement case against him might do just that.

When Houlihan came to the museum in 1981, its 200,000-piece collection was in disarray.

“It was a disaster,” said one of the museum curators whom Houlihan hired early in his tenure.

“Fragile textiles were stuffed into drawers, pottery was jammed into every nook and cranny, native baskets were stacked 15, 20 deep. You could not even look for something for fear you would break things in moving them around.”

The display areas were not much better. Birds regularly flew into the museum through broken windows; some had built nests in the pottery.

“It was degrading to the cultures represented,” Houlihan, 49, said in an interview.

The museum had been started by Charles F. Lummis, a colorful character who was the first city editor of The Times. While walking all the way from Cincinnati to Los Angeles in the 1880s, he had fallen in love with artwork by American Indians of the Southwest. He founded the museum in 1907.

Until recent years the pieces that Lummis and his successors at the museum obtained were considered anthropological curiosities or curios rather than art. It is not likely they could have imagined that in 1992 a single Navajo poncho from the collection would be appraised at $250,000.

By the time Houlihan arrived, he had already established a solid reputation for his work as director of the Heard Museum in Phoenix and New York State Museum in Albany, both of which had extensive collections of American Indian pieces. He knew that the Southwest Museum, with its vast holdings of rare items, was a diamond in the rough.

With an infusion of $400,000 from members of the museum board, he tripled the employment roster and began an ambitious renovation program.

“No one, including Houlihan, was above getting into a pair of jeans and hauling pots up six flights of stairs,” said Steven LeBlanc, who was curator of archeology at the museum during the Houlihan years. “There was such an esprit de corps. We were bringing the museum back to life.”

Modern storage and conservation practices were instituted and a computerized video inventory system set up. Exhibits were streamlined and made more accessible to the public. In 1985, a refurbished 2,400-square-foot main exhibition hall opened its permanent “People of California” exhibit to wide acclaim.

Major grant-giving institutions responded; the J. Paul Getty Trust led the way with a $1-million gift in 1986. That same year the museum was granted accreditation by the American Assn. of Museums.

The museum’s board of trustees rewarded Houlihan for his accomplishments. State documents obtained by The Times show that in 1982, Houlihan’s first full year on the job, he received a salary of $80,200.

By 1987, the year he left, his salary was $97,500.

But the Southwest Museum never came close to joining the pantheon of Los Angeles museums. It never became much of a tourist attraction and even Southern Californians didn’t flock there in great numbers. In a 1983 interview, Houlihan said he hoped museum attendance would soon hit 500,000 a year. But during his tenure the highest it ever got was about 60,000.

“There were a lot of things working against us,” said a former curator, “the museum’s reputation as a ‘funny old place,’ the location, the tremendous competition from other museums in L.A. for the public’s attention.”

Houlihan, according to his former associates, grew frustrated, in particular with the museum board, which he felt did not bring in enough funds for continuing modernization or promotion.

“He used to say, ‘If we had the greatest collection of anything else, Impressionist paintings or whatever, then the resources would be there,’ ” LeBlanc said. “He felt the museum proved it was a valuable asset to the cultural life of Los Angeles, but that no one much seemed to care.”

Cohodas visited the museum on several occasions in the mid-1980s. It was in 1984 or 1985, he believes, that he asked Houlihan why a Washoe basket had gone out of the collection and into the marketplace.

“He said he didn’t know anything about it,” Cohodas said.

Cohodas, who is an assistant professor of fine arts at the University of British Columbia in Vancouver, did not pursue the matter at that time, but it was to him cause for concern.

A museum’s core collection is sacrosanct and any decision to remove an item for sale or trade--a process known in the museum world as de-accessioning--is normally closely scrutinized.

“It’s purposely a long, public process,” LeBlanc said, “to make sure that everyone knows exactly what is being done and why. It’s done that way so that no one can take advantage of the situation.”

Former staffers say they were told the core collection would remain intact.

“Houlihan was quite strict about that,” LeBlanc said. “I remember that the gift shop was not allowed to sell anything old, no matter where they got it, so that there was not even the appearance that we were selling anything from the collection.”

Claudine Scoville, who held the post of registrar at the museum from 1982 to 1987, would have overseen the paperwork concerning the departure or arrival of any object into the collection.

“I was not aware of any Native American pieces that went out when I was there,” said Scoville, who is collections manager of the Arizona State Museum in Tucson.

But Cohodas was right. Items from the Southwest Museum collection were showing up on the open market in numerous states. In some instances, it was very much out in the open.

On the cover of the November, 1984, issue of Western’s World--the in-flight magazine of now-defunct Western Airlines--was a color reproduction of a work by famed Western painter Maynard Dixon. It showed a Plains Indian holding a long pipe and was credited “courtesy of Fenn Galleries” of Santa Fe.

Current Southwest Museum officials say that the painting, which they estimate to be worth at least $300,000, had never properly undergone de-accession and should still be in the museum.

Similarly another Dixon painting, “Washoe Wickiup,” showed up for sale in an ad by an Idaho gallery in a 1988 issue of Antiques & Fine Art magazine.

According to investigators, rumors began to spread among dealers and collectors of American Indian art that a variety of items once in the Southwest Museum were becoming available.

At the museum, tension between Houlihan and the board came to a head in 1987 when Houlihan discovered that the board was considering a merger with the Los Angeles County Museum of Natural History. Numerous local groups came to his defense and the merger did not go through, but Houlihan resigned and left at the end of the year.

Soon after he left he took the job at the Millicent Rogers Museum, which also houses a collection of Southwestern art.

In 1989 Cohodas received a second photograph of a basket he thought belonged in the Southwest Museum. With Houlihan gone, he went to Jonathan Batkin, then curator of anthropology.

Batkin, according to the indictment the district attorney filed, called several dealers he knew to see if they knew anything about it.

They suggested he carefully check his inventory.

A preliminary check found that 50 to 60 items, many of which were highly valued, were gone. According to the indictment, Batkin also told investigators he found evidence that records had been altered to suggest that the pieces had been de-accessioned before Houlihan arrived.

The museum called the FBI. Further checks of the inventory swelled the list of missing items to 127.

In an interview shortly before he was arraigned, Houlihan said he had indeed taken about three-quarters of the listed items out of the collection to put them up for sale or trade without approval from the board. “It was standing policy at the museum when I got there that the director could do that,” he said.

Houlihan said that any items or profits from the transactions went directly back to the museum. “There was absolutely no profit or benefit that went to me,” he said.

He said the charges arose from old wounds over the proposed Natural History Museum merger.

“I think they felt some political embarrassment; it was a poisoned atmosphere,” Houlihan said, adding that he believes museum records will show his account of the transactions is correct.

Michael Heumann, a member of the board and a lawyer for the museum, said the board never gave Houlihan the power to de-accession items on his own. “There was a policy, made early in Houlihan’s time there, that required board approval of de-accession of items of significant value,” Heumann said.

Prosecutor De la Garza said she is confident she can get a conviction. But she admits it is far from an open-and-shut case.

“There was a reluctance to speak among many collectors and dealers in that art community,” she said. “Some of these people suddenly found themselves with hot property.”

The prosecution, she said, has a paper trail on only one Houlihan transaction. It involved a Navajo serape, made about 1850, that museum officials say could be worth up to $250,000. De la Garza said she will be able to prove that Houlihan sold the serape to Arizona-based collector Gerald Collings for $60,000 and used the money to make a down payment on a house in Rimrock, Ariz.

Collings declined to be interviewed, but his lawyer, Jan Lawrence Handzlik, confirmed that his client had testified before the grand jury. “Dr. Houlihan told Mr. Collings that the poncho was being sold for the museum and that the proceeds would go to the museum,” Handzlik said.

De la Garza alleges that Houlihan normally went to great lengths to launder payments to himself.

“Houlihan might say to a buyer, ‘Make out the check to so-and-so because the museum owes them money,’ ” De la Garza said. She declined to say how Houlihan would finally get the funds from the transactions.

The dealers and collectors who ended up with items formerly in the Southwest Museum--24 of which have been recovered by the FBI and are in storage--stand to lose big, no matter how the criminal case is decided. Museum officials say that even if Houlihan is found innocent, he had no right to take the artworks out of the collection and they don’t plan to return the pieces to the buyers.

The serape, for example, had found its way to George Shaw, a dealer in Aspen, Colo., before the FBI retrieved it.

“It has just been a nightmare,” Shaw said. “It’s gone now and I am out a lot of money.”