Toppling Off the Auction Block

During a sale of American paintings she was conducting in May 1998, Diana D. Brooks, the president and chief executive of Sotheby’s, looked down from the podium at a man in the audience who was waving his hand.

“Is that a bid, sir?” she inquired.

“No, I’m waving at my wife,” the man said.

“That could be very expensive, sir,” Brooks shot back. Her remark brought down the house.

Brooks is far less flippant these days. Last October she pleaded guilty to conspiring with arch auction rival Christie’s to violate the Sherman Antitrust Act, and faces the possibility of three years in prison. Her fall from the pinnacle of the American establishment has been spectacular.

Once a role model, she has resigned not just from the elite auction house she headed, but as a trustee of Yale University, her alma mater, and from the board of Morgan Stanley Dean Witter & Co. Now the threat of bankruptcy looms over Brooks, once one of the most powerful women in the art world.

There are deep scars these days on the facade of Sotheby’s Manhattan headquarters, which is undergoing major renovations. But inside, the scars are perhaps even deeper. Brooks was a highly visible, upbeat and charismatic leader who not only became the public presence of the 256-year-old auction house, but succeeded in dramatically modernizing and broadening its business. On her watch, profit rose steadily.

“She set the tone and was its voice. She enjoyed the limelight,” said Allison E. Leeds, editor of the Magazine Antiques. “She did a lot to get that name in front of people’s faces.”

Many of Brooks’ former colleagues feel stunned and betrayed. They look back, dissecting her actions, searching for signs of recklessness that they might have missed. Others are amazed that Brooks--”Dede” to most who know her--secretly met for more than six years with Christopher M. Davidge, Christie’s then-chief executive, to fix commissions. They even exchanged such details as employee salaries to prevent staff from leveraging better pay by jumping ship to the competing house.

“It’s like a John Le Carre novel, the meeting in out-of-the-way restaurants and in limousines,” said one former colleague, who, like many people interviewed for this article would not allow their names to be used because they still have some loyalty to Brooks or they continue to do business with Sotheby’s and Christie’s.

“They played this competitive thing to the hilt,” added a second former Sotheby’s employee. “We hated Christie’s. The thought of cooperating was so alien, and then to find out they were doing comparisons of salaries. It was the ultimate sellout.”

Even after Brooks resigned last February--in the midst of the federal investigation--some co-workers refused to believe she was capable of doing anything wrong. “Her life was Sotheby’s,” said one executive of the auction house.

That faith was crushed when Brooks pleaded guilty to one felony count of conspiring to “suppress and eliminate competition” by fixing commission rates with Christie’s. In court, Brooks said she was acting “at the direction of a superior at Sotheby’s.” And she only had one: A. Alfred Taubman.

When Taubman first met Brooks, the story goes, she was the only woman in a meeting, and he asked her to bring him a cup of coffee. “With pleasure,” she reportedly replied before handing him a pile of documents and saying: “And can you photocopy these for me?” (Taubman has said the tale is apocryphal.)

Prosecutors have named Taubman, the Michigan shopping center developer and art collector who bought Sotheby’s in 1983, as the target of their ongoing investigation. He was accused in court by Brooks, who has agreed to cooperate with government lawyers. The quality of the testimony and information she is providing will, in large degree, determine whether she goes to prison or is sentenced to probation, plus a sizable fine.

Taubman, 75, has flatly denied Brooks’ claim and has not been charged. He has waged an aggressive campaign in the media and in the courts--seeking to subpoena documents from Christie’s and question Davidge, who left Christie’s in December 1999 and is reportedly in India.

“Whatever Ms. Brooks chose to do, she did completely on her own--without my knowledge or approval,” Taubman said in a statement after Brooks appeared in court in October. He had resigned as chairman of Sotheby’s in February at the same time as Brooks. “This clearly is not an easy decision for me,” Taubman said at the time. Sotheby’s immediately appointed William F. Ruprecht, a 20-year veteran of the auction house, who was managing director for North and South America, as president and chief executive. Former Columbia University president, Michael I. Sovern, was named chairman.

Under antitrust law, one of the parties involved can receive conditional amnesty by confessing to the illegal activity and agreeing to testify. As the government’s investigation heated up, Brooks--reportedly with Sotheby’s permission--sought amnesty. Christie’s, including Davidge, had beaten her to the prosecutor’s door.

One thing is clear: Brooks’ meetings with Davidge, which started as early as April 1993, came at a very bad time in the art market when both houses were scrambling for profits. Promotional expenses at Sotheby’s and Christie’s had soared. Competition was fierce to court clients with desirable merchandise, and the houses were slashing the commissions they charged sellers. “Dede was a product of a climate,” said a dealer who purchased many valuable antiques from both Sotheby’s and Christie’s over the years. “Her behavior was an extension of that climate.”

Sotheby’s and Christie’s have agreed to pay $256 million each to settle a class-action lawsuit brought by angry clients. Taubman, according to Sotheby’s, has agreed to pay $156 million of Sotheby’s share himself.

Brooks has declined requests for interviews, and her lawyer, Stephen E. Kaufman, would not comment on the case.

Reared to Be Competitive

Brooks, 50, was raised in prosperous Laurel Hollow--on Long Island’s North Shore--in a household that valued competition and athletic achievement. Her father, Martin Dwyer Jr., a varsity athlete at Yale, was head of Jamaica Water & Utilities Inc., which provided drinking water to parts of Long Island and New York City. Brooks, one of six children, was expected to hold her own with her three brothers.

“The father would say to them: ‘Which one of you did best today?’ ” said Robert Lacey, author of “Sotheby’s Bidding for Class,” a sometimes-critical book about the auction house.

Brenda Callaway, who was Brooks’ ninth-grade field hockey coach, remembered her as “headstrong. She was an excellent player, beautiful athlete,” Callaway said. “She wasn’t a team player. She held onto the ball.”

After attending Miss Porter’s School in Connecticut--graduates include Jacqueline Kennedy Onassis, whose possessions Brooks would auction years later in perhaps the high point of her career--she spent a year at Smith College and then transferred to Yale, where she majored in American studies.

After graduating in 1973, she joined Citibank, and became one of the bank’s first women executives. After five years, she took a leave of absence so she could be with her young daughter, who recently graduated from Yale. A son is still in prep school. Her husband, Michael, is an investment banker.

In 1979, Brooks started part time as director of financial planning at Sotheby’s, and was quickly promoted. In November 1993, at 43, with Taubman as her mentor, she became president of the auction house.

Standing 6 feet tall in her trademark brightly colored Bill Blass and Valentino suits, Brooks was a commanding presence at Sotheby’s.

“She was very direct,” said one employee who asked not to be named. “She looked at you and she meant business. She was very straightforward.”

“Dede has a great sense of humor. She was one of the guys,” said another former colleague, who explained that Brooks was able to bridge the gap at Sotheby’s between the auction experts, who judge an item’s value and woo collectors, and the financial gurus. “She could pull it together.”

Because of Brooks, Sotheby’s is a market basket of financial services--lending, real estate, the Internet. “The auctions,” added the colleague, “are only a piece.”

Brooks impressed people with her quick mind and charm. She could figure the most complicated deals in her head without using a calculator. “She could walk into a collector’s house and . . . memorize everything,” an aide said. “She would look at the grandchildren’s photographs, the books the person was reading, and she could comment on that. She could say, ‘You have five children and 24 grandchildren.’ She had wonderful people skills.”

At the same time, noted one dealer whom Brooks courted for Sotheby’s Web site, she could be brash and aggressive.

Bruce Wolmer, editor of Art & Auction magazine, said that Brooks “was a brilliant marketer of brands” who set out to personify Sotheby’s with high-profile events. “Both the Jackie [Kennedy Onassis] sale and the [Duke and Duchess of] Windsor sale ended up being episodes on ‘Seinfeld.’ For an auction house to be marketed to the hot heart of popular culture, that takes some doing.”

The $34.4-million Kennedy Onassis sale was a worldwide phenomenon. Potential bidders lined up outside Sotheby’s headquarters to scramble for scraps of Camelot. During the frenzy, some Sotheby’s employees grumbled that Brooks hogged the limelight by conducting most of the sales herself. They said she didn’t have the rhythm, finesse and warmth of a natural auctioneer.

“Dede was always a very controversial figure,” Wolmer said. “She had her loyalists and detractors, and they are equally strong in their feelings. Some people think she was driven by an overwhelming ego and could not be in the same room with anyone who had the same drive.”

For all her toughness and curtness, she could be caring. Friends say she stressed that family always came first, and was supportive in times of crisis. When Robert Woolley, a longtime employee of Sotheby’s was dying from complications of AIDS, Brooks shepherded the staff into the main auction room for a tribute to him. Both Brooks and Woolley spoke, bringing the audience to tears.

Detractors, however, say she could be equally passionate in getting rid of colleagues she disliked. They charge that in her desire for the spotlight, Brooks tended to diminish the position and the prestige of the experts at Sotheby’s.

In retrospect, her critics say, there were signs of recklessness. They point out that she began colluding with Christie’s immediately after being named Sotheby’s chief executive--and they find it hard to believe she was unaware of the potential antitrust consequences.

Some meetings with Davidge took place in 1997, while Brooks was defending Sotheby’s against public allegations that an employee in Milan had evaded Italian art export regulations by arranging for a painting to be smuggled out of Italy for auction in England.

Critics recall Brooks’ decision in 1987 to lend nearly half the $49-million purchase price of Vincent van Gogh’s “Irises” to Alan Bond, an Australian entrepreneur. The deal became public when Bond later couldn’t pay for the painting, which now hangs in the J. Paul Getty Museum. Even though Sotheby’s eventually got its $24 million back, the transaction raised more than eyebrows.

“So far as dealers were concerned,” wrote Lacey, “the success of ‘Irises’ had further increased the auction house share of the art market to their detriment, and they were outraged to discover, as they saw it, that Sotheby’s had inflated the price by putting its own money into Alan Bond’s pot.”

To many supporters who worked with Brooks, the revelations have been painful. “I thought I knew her. No one really knew her,” said a specialist who has left the auction house.

Lingering Questions

One day last fall, memorabilia from the collection of the late actor Clayton Moore was on display at Sotheby’s in Manhattan. Arranged before auction for all to see were the Lone Ranger’s hand-tooled gun belt, boots, silver bullets, brown satin jacket and black mask, among other items.

The exhibit could not have been more symbolic given the debate in the art world: Was Brooks acting as a lone ranger, or as Taubman’s faithful sidekick when she colluded with Davidge? Given her strong personality, some co-workers find it doubtful that Brooks would undertake anything she didn’t want to do. Others point out that Taubman was the only person she feared. She would break up meetings to take a phone call from Sotheby’s chairman, they point out, something that would not happen for anyone else.

When Davidge turned over his private files in December 1999 in a dispute with Christie’s over severance, the auction house’s criminal lawyers handed the records over to prosecutors.

Taubman’s associates stress that he never colluded with Sir Anthony Tennant, Christie’s former chairman, who had left the post before the scandal erupted. They say any reports by Davidge of meetings between Tennant and Taubman had nothing to do with price fixing--as Davidge may have claimed--but concerned issues in the French auction market. Aside from questions of building design and the format of auction catalogs, they emphasize, Taubman left Brooks alone.

People who know him well say that Taubman passed a lie-detector test, arranged by his lawyers, in which he denied agreeing to fix prices with Tennant, directing Brooks to collude with Christie’s or receiving reports from her about her illegal conversations with Davidge.

Associates of Brooks emphasize that Brooks spoke frequently with Taubman during the period that she was meeting with Davidge--conversations that can be supported by phone records and the diaries and recollections of secretaries. As the principal owner of Sotheby’s, they say, he wanted to know of any significant financial transaction.

Soon after she resigned from Sotheby’s, Brooks cut her hair, leading some who know her to speculate that she might have done so out of a sense of shame--or in order not to be readily recognized. By the time she pleaded guilty in October, her hair had grown back. Answering questions from U.S. District Court Judge Richard M. Berman, she said she was not under the care of a doctor, including a psychiatrist. Brooks said her health was very good.

“And your mental health?”

“Very good,” she replied.

People who know Brooks stress that, above all, she is a survivor. Soon after she resigned from Sotheby’s, Brooks and her husband put their Connecticut home on the market and purchased a house near her mother in Florida, where bankruptcy laws are more protective.

In her Sotheby’s office, Brooks kept a pillow with a message in needlepoint.

“It’s not easy being Queen,” it said.

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Times staff writer Suzanne Muchnic contributed to this story.