Where is Rudy Giuliani When We Need Him?

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Posted By: CoreyRS.hanus

I agree with Jeff's statement that nothing will ever be accomplished with Bruce's idea unless and until any such regulatory committee has the authority to make unannounced intrusive inspections of an auction house's books and bidding records. I'm not persuaded, though, that this cannot happen. Over the past several years I know of instances where a number of auction houses have expressed concerns about the legitimacy of some of the claimed prices realized of their competitors. It seems, then, that there is a desire within at least a portion of the auction house ranks to clean up the fraud in the auction business.

So, to those of you who run auction houses and are miffed that you are losing business to competitors you feel are rigging their auctions to "realize" such high prices, I posit the following challenge. Publicly announce that you are willing to allow your books and bidding records to be audited. Yes, you will have legitimate concerns about keeping confidential proprietary information, and legitimate concerns about respecting the privacy of your consignors/bidders. But I have no doubt those concerns can be addressed. Auditors can be required to sign confidentially agreements, in addition to being selected outside the ranks of the hobby (so nobody will be concerned they will use what they learned to have an unfair advantage in conducting hobby business). Then, publicly challenge your competitors to do the same. If they don't, then I would think you would have one terrific sales pitch -- not only do we talk the talk, we walk the walk.

Now, you might fairly wonder, is it worth all the trouble? After all, as has been noted, in the collecting world the card rules. Collectors will grumble about underhanded tactics yet continue to bid with the suspect auctions houses to get that prized card. To this concern I have two responses. First, the great majority of items sold by auction houses are not the extraordinarily hard-to-come by items. They are items that will within some reasonable time undoubtedly appear in another auction. Given this reality, maybe enough collectors will come around to understanding that by making a stand for honesty and integrity in the hobby and not bidding on non-extraordinarily hard-to-come items (the lifeblood of an auction house's business), they will not be adversely impacting their ability to add to their collections. But they will, by their forbearance, be doing something to making the hobby cleaner. So maybe it WILL garner more business for the honest auction house to go to the trouble. Second, what do you have to lose. If in fact you are honest and have nothing to hide, there seems to be no real downside, and possibly a big upside.