Lee Rosenbaum heard back from the AAMD on the Montclair deaccessionings. They say everything is fine:
"Placing funds derived from deaccessions in an endowment restricted only to acquisitions is entirely consistent with AAMD policy since the funds generated by such an endowment may only be used for acquisitions. ... To argue that [the sale] conflicts with AAMD policy because the value of this endowment may be part of Montclair's bond covenants is to conflate the meaning of 'purpose.' The purpose of the endowment is not satisfaction of bond covenants; it is support of art acquisitions. That Montclair's restricted endowment for acquisitions may enter into bond covenants does not imply a purpose other than acquisitions."
Lee's not buying it: "It seems clear to me that these disposals, which Montclair tellingly describes as part of its 'Financial Security Plan,' are not only about getting money to acquire art. Their timing ... bespeaks a need to come up quickly with some cash to shore up an endowment, that ... plummeted from $8 million to $6 million since July 1." ( I made a similar point in this post. I don't see how anyone can claim with a straight face that "the purpose" of these sales is to acquire more art.) She thinks the AAMD "needs to rethink this issue. It's another slippery slope that may entice other financially pressed institutions if it's not placed off-limits."
It seems to me the AAMD's response makes a little too much of the distinction between the deaccessioning proceeds "backing the bonds," on the one hand, and being used to "satisfy bond covenants," on the other. (Remember, the question James Panero's WSJ piece raised was: "if museums are forbidden from collateralizing their bonds with the art on their walls, is it appropriate that they should be able to sell the art and use the proceeds to back their bonds?") You could just as easily re-write their response to Lee as follows:
"To argue that Montclair's restricted endowment for acquisitions is being used for a second and improper 'purpose' that conflicts with AAMD policy because the value of this endowment may be used to back the museum's bonds is to conflate the meaning of 'purpose.' The purpose of the endowment is not to back the bonds; it is support of art acquisitions. That Montclair's restricted endowment for acquisitions may back its bonds does not imply a purpose other than acquisitions."
How is that any different from what they're saying about using the proceeds to satisfy the bond covenants?