ALPLM foundation seeks bailout
Shortly after the Abraham Lincoln Presidential Library Foundation closed a 2007 deal to buy a trove of Lincoln artifacts for $23 million, the nonprofit foundation signed an agreement with the state-owned presidential museum aimed at ensuring relics would be forever in public hands.
Under terms of the agreement between the state and the private foundation, ownership of artifacts purchased with borrowed money would be transferred from the foundation to the institution on an annual basis as the debt was paid down. If, for instance, the foundation whittled the debt by $1 million during a given year, artifacts worth that much were supposed to be given to the museum.
That didn’t happen.
Instead, the agreement between the state and the foundation went ignored and unenforced until 2012, when the agreement was altered so that the state lost rights to assume ownership of artifacts, even if the loan is paid off. Now, the foundation says that some artifacts might be sold to make good on $9.7 million in debt still owed to a bank with ties to a foundation board member.
“If the foundation is not able to secure commitments in the very near future to retire most if not all of the remaining $9.7 million debt, it will have no choice but to accelerate the possibility of selling these unique artifacts on the private market, which would likely remove them from public view forever,” the foundation said in a May 10 written statement released after behind-the-scenes efforts to secure a state bailout fell short.
Artifact sales already have started.
Rene Brethorst, the foundation’s chief operating officer, confirmed that nearly 100 documents, prints, photographs, campaign torches and other artifacts listed in a 2017 filing with the Illinois Secretary of State have been sold. It’s not clear how much the foundation received from artifacts listed in the 2017 filing, which memorializes the removal of items from collateral backing a loan used to finance the acquisition of more than 1,500 relics in 2007.
Dollar figures alongside each item total more than $86,000 and range from $100 to $15,000 for a single artifact, but it’s not clear whether the figures represent appraised values, asking prices, sales prices or something else. Brethorst did not provide a figure when asked how much the foundation realized from the sales. In an initial email, Brethorst wrote that the items were sold with ALPLM approval and that they were duplicates of relics already owned by the institution.
“They were lesser known items and a greater number of them existed not only in the ALPLM collection but in the world,” Brethorst wrote. “They were all sold to public entities that had an interest in Lincoln.” Proceeds, she wrote, were used to pay down debt incurred to acquire the items that were among more than 1,500 purchased in 2007 by the foundation from Louise Taper, a foundation board member. (She did not vote on the purchase.)
The saga of the Taper Collection is a classic Illinois tale of insider deals and potential conflicts of interest, with the state now being asked to bail out the foundation or see iconic Lincoln artifacts, some reportedly worth millions of dollars, be sold.
The story begins in early 2007, when Taper agreed to sell more than 1,500 artifacts to the foundation for $23 million, plus donate an additional $2 million in relics so that she could claim tax deductions. Both museum and foundation officials were ecstatic.
“We cannot let this world-class collection of our greatest president slip through our fingers,” T. Tolbert Chisum, a foundation board member, wrote to ALPLM officials and fellow foundation board members in the spring of 2007. “It is time to bring Mr. Lincoln home!”
Board members and museum officials often were one and the same.
Julie Cellini, for example, was both secretary to the foundation board and chairwoman of the Illinois Historic Preservation Agency that ran the museum. Ed Genson, a prominent Chicago attorney, also sat on both boards. Rick Beard, then museum director, was also director of the foundation, which paid him a $71,000 salary in addition to his six-figure state salary.
Judging from emails and other documents, it appears the foundation was fully in charge as the 2007 deal to buy Taper’s collection was made and the institution’s future course was charted. The deal went ahead even though a state-hired appraiser raised questions about provenance and at least one iconic artifact was taken off the table.
As initially proposed, the deal was supposed to include a copy of the Emancipation Proclamation signed by Lincoln, but that document wasn’t included in the final sale. Prior to the purchase, an appraiser hired by the state warned that a stovepipe hat that purportedly belonged to Lincoln -- the single most valuable piece in the collection -- had shaky provenance, and he was proven right: There is no solid proof that the hat ever graced the Great Emancipator’s head. The appraiser also raised questions about the authenticity of a clock that allegedly came from Lincoln’s law office in Springfield, as well as a fan that Mary Todd Lincoln reportedly carried with her to Ford’s Theater. Nonetheless, the deal went full speed ahead.
Wayne Whalen, then foundation chairman, told Illinois Times in 2013 that the foundation was conducting an internal review to address provenance questions after the paper and the Chicago Sun Times reported that the state-hired appraiser had raised issues. The results of that review have not been publicly released. During the past year, Illinois Times twice has asked ALPLM director Alan Lowe whether he has received results of the foundation’s review. The second time the newspaper asked, ALPLM spokesman Chris Wills said that he would look into the matter. The newspaper last week again asked Wills about the foundation’s internal review of provenance questions involving the clock and fan. The newspaper has received no response.
That the public institution wouldn’t hold the private foundation accountable is nothing new.
When does the museum get the collection?
As the closing date for the 2007 sale drew near, officials with the museum and the foundation discussed what should be included in an agreement spelling out the obligations and rights of each party. At one point, Beard emailed foundation and museum officials working on the purchase, saying that he believed the collection would not be collateralized and so ownership could transfer from the private foundation to the public institution “as soon as we wished.”
Beard soon sent a second email, saying that he had been mistaken and that an attorney for the foundation had told him that the foundation would retain ownership until the debt was retired. Susan Mogerman, then the ALPLM’s chief operating officer, said much the same in an email sent one week later. “As I understand it, nothing will be turned over until the entire debt is paid,” she wrote.
The Taper sale closed one week later. One week after the sales agreement was signed, Cellini signed an agreement that stated the foundation on an annual basis would turn over artifacts to the museum based on how much debt had been retired during a given year. Acting on behalf of the Illinois Historic Preservation Agency, Cellini signed the agreement even though she is listed as a recipient of Mogerman’s email sent two weeks earlier stating that nothing would be turned over until the entire debt was paid. Former Gov. Jim Edgar, who was chairman of the foundation, signed on behalf of the private group.
In a recent interview, Edgar said that he can’t recall details and so could not say why he signed the agreement that required the foundation to turn over artifacts on an annual basis. Cellini could not be reached for comment.
Beard says he doesn’t know why the agreement was signed despite emails showing that key players had decided that the foundation would retain ownership until the entire debt was paid. He speculated that Cellini had the state’s best interests at heart and so signed the agreement to put artifacts under museum ownership sooner rather than later. It wasn’t an arrangement that would upset the foundation, he says. “The foundation didn’t want to be in the business of owning the collection,” Beard recalls. “They bought it, but they didn’t want any responsibility for it. They didn’t want to pay to insure it.”
Even as Cellini and Edgar signed the agreement, the foundation was seeking tax-exempt financing via the City of Springfield to fund the purchase, which was costing the foundation $4,000 a day in interest via a bridge loan set up to pay Taper until permanent financing could be arranged. City taxpayers wouldn’t be on the hook, but bonds, backed by a bank, would cut the daily interest payment to $2,750. Shortly after the city approved bonding arrangements, the foundation obtained financing through Harris Bank in the fall of 2007.
“Nobody’s hands are clean”
The following year, the public institution descended into turmoil as both Beard and then-Gov. Rod Blagojevich lost their jobs after being arrested, the museum director for shoplifting, the governor for an array of corruption charges that landed him in prison. Board terms on the Illinois Historic Preservation Agency that ran the ALPLM expired, and the board became inactive. Jan Grimes, who took over from Beard as museum director, in 2009 signed a renewal of the agreement that required the foundation to transfer ownership of artifacts on an annual basis, even though no artifacts had been transferred since the agreement was first signed in 2007. Signing on behalf of the foundation was Chisum, who had become chief executive officer and chairman of the foundation. Chisum could not be reached for comment.
Gov. Pat Quinn revived the IHPA board in 2010, eventually replacing Cellini and Genson with members who had no ties to the foundation. And the requirement that the foundation turn over artifacts to the museum each year became an issue.
Under terms of the 2007 bond issue backed by Harris Bank, the foundation was supposed to retire $12 million in debt by the end of 2012. Fundraising hadn’t been as successful as hoped, and so the foundation made plans to refinance as the deadline approached. Lake Forest Bank and Trust was the new lender.
The bank is a subsidiary of Wintrust Financial Corp., a corporation where Chisum held the position of managing director of business development. The idea to get financing from a bank with ties to Chisum wasn’t new, according to Beard.
“Chisum was willing to finance it from the outset,” the former ALPLM director recalls. “But we thought that was a clear conflict of interest. But you’re also paying a (foundation) board member $23 million for a collection. That’s a pretty clear conflict, too. Nobody’s hands are clean on this.”
Lake Forest wasn’t willing to do the deal under the agreement between the foundation and the museum stating that the foundation would transfer artifacts to the museum on an annual basis. The bank also wasn’t willing to accept a revised agreement stating that the foundation would transfer ownership to the museum when the debt was retired, according to 2012 correspondence between Richard Astle, an attorney for the foundation, and Garth Madison, counsel for Illinois Historic Preservation that ran the museum.
“The foundation does not believe that it can include any statements in the…agreement regarding the disposition of the Taper Collection inasmuch as those statements would be troublesome to the bank and would violate its covenant to maintain the collection lien free,” Astle wrote in an email to Madison after the IHPA lawyer suggested revising the agreement to acknowledge that ownership would be turned over if the loan was paid off.
And so the IHPA board in 2012 erased language requiring that artifacts be transferred annually. Tony Leone, who was then on the IHPA board, proposed changing the agreement to make clear that artifacts would be transferred to the museum when the foundation paid off the loan, but he was unsuccessful.
“This was a racket,” Leone says today. “They were going to jam it past us, regardless.”
On paper, at least, it appears that Lake Forest Bank and Trust is in a better position than Harris Bank, the prior lender. With the collection appraised at $23 million and the bank owed $9.7 million, there seems to be substantial collateral to cover the bank in event of default. The foundation’s IRS filings indicate that more than $2.4 million in interest has been paid since Lake Forest took over the loan in 2012.
Contact Bruce Rushton at email@example.com.