Artwork in custody by Miro.

Courtesy of the Museu Oscar Niemeyer

Brazil's Museum of Stolen Beauty

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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When federal police showed up at his door in Rio de Janeiro with an arrest warrant in late 2014, Renato Duque grabbed the phone. "What kind of country is this?" the former top official at the Brazilian oil company Petrobras exclaimed to his attorney moments before being hauled off to prison on corruption charges.

No one asked me, but I'd say Duque's outburst might have made a fine title for the collection of fine art that the police seized from muckety-mucks caught up in the giant political graft and kickback scandal at Petrobras, known in Brazil as the Car Wash case.

The feds apparently heard other muses, and so the works on display in Gallery 7 of the Oscar Niemeyer Museum, a stunning home for modern and contemporary art and design in the southern city of Curitiba, fell under the just-the-facts-ma'am name of Artworks in Custody.

It's an unusual exhibit; think Nazi-purloined Holocaust art hanging in the Museum of Modern Art. But if the display has a doyen, it would have to be Duque himself. More than half the 270 modernist and contemporary works in the museum's care were apprehended in his luxury apartment. Prosecutors have accused Duque and his fellow art aficionados of acquiring their stash as bribes for allegedly fraudulent contracts at Petrobras.

Maybe it's poetic justice that Duque, who was sentenced to 20 years for corruption last year, is now lodged in a federal prison just a few kilometers from the museum -- an address he shares with a number of other Brazilian moguls, political operators and lobbyists ensnared in the Car Wash investigation.

That's not the only irony behind the exhibit. In 1953, Brazilians celebrated the founding of their national oil company with the rallying cry, "The oil is ours." The slogan became a proxy for civic pride, and Petrobras, a monument of national achievement.

Six decades later, it's more likely seen as an emblem of private enrichment at public expense, all to the benefit of a few well-placed fat cats, whose handsome loot is now hanging on the museum wall. It turns out this whole time the moguls thought the oil was really theirs -- along with the oils paintings, the acrylics, the collages, the lithographs and fine photography, as well.

Though the exhibit is spare -- only 27 works are currently hanging -- its message is hard to miss. The gallery opens with a huge lithograph signed by Miró, one of the many treasures taken from Duque's home.

Scores more paintings, including a small canvas by Picasso, another by Salvador Dali, and dozens of other works by revered Brazilian artists, like Vik Muniz (portrayed in the film Wasteland) and painter-photographer Miguel Rio Branco,are either hanging or stowed in the air-cooled museum vault, their final destiny awaiting word from the court.

Forensic teams are still poring over this oeuvre trying to determine what's real and what's fake. One putative painting by Renoir turned out to be a reproduction. Any that are proven to have been purchased before the plunder of Petrobras will be returned to their owners.

Buying fine art to launder dirty money is a global trend, favored by white collar criminals and drug dealers. But separating the crooked deals from the bona fide is tricky because art markets are largely self-regulated, sales often are in cash, and authentication can be difficult.

All the more so in Brazil, where courts and police investigators had little time for culture crooks until recently. "The federal police were used to dealing with conventional goods, like cars, jewelry and houses," Fausto Martin De Sanctis, an appellate court judge in Sao Paulo and author of a book on art and money laundering, told me.

So much the better for Brazil's criminal high rollers, who plowed fortunes into haute culture and then sold their collection again for clean profits with little questions asked. The result: Brazil's financial intelligence regulator has fielded only 82 cases of suspect purchases of art and antiques since the money laundering law was extended to the art market in 1999.

Thanks to some stubborn judges and splashy court cases, the official indifference may be changing. De Sanctis paved the way last decade when he ordered scores of paintings, rare books and fine crafts to be seized from high-profile criminals, including a Colombian drug trafficker who paid his attorneys with canvases by famed figurative painter Fernando Botero.  

He then ruled that the confiscated art be displayed by local museums and in city squares, launching Brazil's first stolen beauty exhibits. The art apprehended in the Petrobras case follows in that crusading genre.

Not everyone is wild about the idea of custodial art. "We don't want to be known as the Car Wash Museum," said Juliana Vosnika, director of the Oscar Niemeyer Museum, which keeps only about 10 percent of the thousands of works it is offered every year. After all, she said, museumS generally structure their exhibits around criteria such as who made prized works, not who made off with them.

Still, there's nothing like a corruption scandal to pique civic attention. Just ask Eli Eloi, the security guard at Gallery 7. The comments he most hears: "Let's see the art that our money bought."

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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