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Glenstone, a private museum in Potomac, Maryland, owned by Mitchell Rales. (Glenstone Foundation)

Congress is looking for answers from a number of museums around the country that may be getting more from the public than they’re giving. Two of the museums identified in the probe are located in the D.C. area: the Kreeger Museum and Glenstone.

Last month, the Senate Finance Committee issued a letter to art museums in Dallas, Los Angeles, Miami, New York, and other cities. All 11 museums are private art collections, most of them small and dedicated to a single vision or purpose. As private nonprofit foundations, these museums enjoy tax-exempt status.

The Senate letter, a copy of which was obtained by City Paper, asked for a raft of facts and figures from these organizations: operating hours and annual visitation, loans and acquisitions, title and property taxes. The purpose of the investigation is to determine whether private art collections are worth the public money they draw in the form of tax deductions.

Specifically, the letter is an attempt to suss out whether private art museums are violating Internal Revenue Service rules prohibiting “private inurement”: benefits diverted from the public interest to private figures, including non-monetary benefits.

“[R]ecent reports have raised the possibility that some private foundations are operating museums that offer minimal benefit to the public while enabling donors to reap substantial tax advantages,” the letter reads.

Museum lovers rely on the benevolence of elite collectors who give their artworks and collections up for public consumption. The law encourages collectors to give to museums. What concerns Congress is the prospect of tax shelters that do little more than flatter wealthy collectors.

The Kreeger Museum and Glenstone, the two D.C.–area museums that received the letter, are both supported by private nonprofit foundations. Both were built by individual collectors. Both are housed in architectural jewel boxes. And both are hidden far from the places where museum-going tourists typically explore.

Between them, these museums boast some of the best modern and contemporary art in the region. However, as Congress may have learned by now, they are categorically different.

David Kreeger, who built the Kreeger Museum collection with his wife, Carmen, died at 81 in 1990. (Carmen died at 94 in 2003.) The Kreeger Museum, which was designed by Philip Johnson and served as the Kreegers’ home in Foxhall, opened to the public in 1994. Tax records for the museum list a board of three directors: the Kreegers’ children, Peter Kreeger and Carol Ingall, and Robert E. Davis. Peter Kreeger received $126,000 in compensation from the foundation in 2014.

Mitchell P. Rales, 59, the billionaire co-founder of the Danaher Corporation, launched Glenstone in 2006. Rales still serves as its director and chairman today. His wife, Emily Wei Rales, is the president of Glenstone. Tax records do not list any trustees for the museum. Glenstone is located at 12002 Glen Road in Potomac, Md., on the same 200-acre estate as the Rales’ home.

While Glenstone boasts impressive sculptures by Richard Serra and paintings by Ellsworth Kelly, very few people ever get to see them. Rales, a notoriously private figure who has granted interviews rarely over the last 30 years, tightly controls admission. Glenstone was the subject of a City Paper feature in 2008 that detailed the museum’s efforts to keep information about Glenstone out of the public realm. The reporter, Angela Valdez, was not allowed inside the building.

On two occasions, I have also been refused entry at Glenstone: once while working as an art writer, shortly after the museum opened, and again in 2011, as an editor of an architecture magazine. Over the course of reporting this story, however, I was invited by the museum’s chief administrative officer, Laura A. Linton, to make a reservation on the website to visit. Glenstone provided no further answers or comment for this story, except to note that Philip Kennicott, the art and architecture critic for the Washington Post, had reviewed Glenstone’s show of minimalist sculpture by Fred Sandback in October.

The Kreeger Museum, designed by Philip Johnson, in Northwest D.C. (Kreeger Museum)

Kennicott describes Glenstone as “an emerging powerhouse in the national arts scene,” noting that when the museum’s Thomas Phifer–designed addition opens in 2017 that “Glenstone will rank in the top tier of privately endowed contemporary art institutions.” While that might be right, its traffic is a trickle: Glenstone’s summary of direct charitable activities, which it is required to disclose with its tax records, notes that 15,000 people have visited the museum. (This was the figure as of 2013, the most recent year for which records are available.) By comparison, the Kreeger Museum, which is tucked away in Foxhall and also requires reservations for part of the week, has had more than 15,000 visitors in 2015 alone.

Glenstone is undeniably a powerhouse financially. Tax records for the Glenstone Foundation list the museum’s net assets at more than $800 million. By comparison, the National Gallery of Art held a little over $1 billion in net assets at the end of 2013. Glenstone belongs to an elite category, the 1 percent of museums.

The Potomac museum holds a small fortune in the form of Danaher shares, the source of Rales’ wealth. Records show that, between 2011 and 2013, Rales has contributed more than $360 million in Danaher stock to the Glenstone Foundation. He put more than $143 million in Danaher stock in Glenstone in 2013 alone. And back in 2011, Rales and his brother and Danaher co-founder, Steven Rales, each gave the Glenstone Foundation $26 million in stock in their joint holding company, Janalia Corporation.

The benefits to stashing a fortune in a private art museum are immense. Glenstone itself can write off expenses associated with housing and insuring art, of course. And as a nonprofit foundation the museum does not have to pay state or local sales taxes for new acquisitions. Moreover, by giving his stock to the Glenstone Foundation—which he personally controls—Rales is able to avoid paying capital gains taxes. He can deduct his contributions, which run in the hundreds of millions, from his own taxes. Further, nonprofit foundations do not have to pay estate taxes on assets when their founders die.

Presumably this information and more will soon be reviewed by the Senate Finance Committee. The committee’s directive, which was signed by Sen. Orrin Hatch, asked museums to comply by Dec. 15. Linton would not say whether Glenstone had yet responded.

The Kreeger Museum met Hatch’s deadline, according to its founding director, Judy Greenberg. She says that she doesn’t know how the Kreeger made it onto his list in the first place.

“I don’t see any questions on our end,” Greenberg says. “I certainly feel like we do the proper thing to do in running a museum. I think we have one of the best education programs in Washington.”

Like the Phillips Collection across town or the Barnes Foundation in Philadelphia, the Kreeger Museum is a modernist art collection with a strong focus on educational programming. The Kreeger is smaller than its peer institutions, but it still mounts special exhibitions. Last year, for its 20th anniversary, the Kreeger assembled a show of D.C. artists whose work has appeared in the museum, including Sam Gilliam, Kendall Buster, and Gene Davis. For a smart show in 2012, Dan Steinhilber created a sculptural installation from various odds and ends that once belonged to the Kreegers—leftovers from the building’s tenure as a home.

Compared to Glenstone, by the numbers, the Kreeger is a guppy. The David Lloyd Kreeger Foundation’s net assets totaled $99 million in 2013, and its overall annual income is about $7 million. Glenstone’s annual income is more than $400 million. The Kreeger pays about $500,000 in salaries to its executives and staff; none of Glenstone’s executives draw salaries, and the museum’s tax records up to 2013 do not list any wages for employees whatsoever.

The Broad, another private museum identified by the Senate Financial Committee letter, opened in Los Angeles in September. (Don Barrett/Flickr)

There’s a reason why Congress extends tax-exempt status to private art collections. As museums, these collections give back to the public through shows and scholarship. That’s the argument, anyway, for extending an immense privilege to private museums at substantial cost to the public—a federal subsidy, as the New York Times put it back in January.

Measuring that public benefit is hard to do. Congress may need to see something more substantial than subjective claims about the spiritual appeal of art. Most museums can point to some tangible ways that they prove themselves. For example, the Kreeger promotes a special education program geared toward people with Alzheimer’s disease and other conditions affecting memory loss. It will hold ten of these “Conversations” events in spring 2016, throwing the spotlight on paintings by Picasso, Monet, Joseph Albers, and others. “I think we’re a wonderful example of a small museum and the contribution it could make,” Greenberg says.

For its part, Glenstone loans its artworks to institutions around the world. It also provides direct support to art causes: In 2013, the foundation gave $121,000 to various arts organizations and entities, including the Skowhegan School of Painting and Sculpture, the Dia Art Foundation, and the University of Maryland. It paid almost half that much to the Vanity Fair architecture critic Paul Goldberger in consultant fees, but no matter. At the end of the day, Glenstone maintains a solid contemporary art collection. According to Kennicott, it’s a hell of a place to see art.

What if the Kreegers hadn’t seen any incentive in turning their home and art fortune into a museum for the public? What if it didn’t make sense for Duncan Phillips, or Henry Frick, or Alice Walton, or William Corcoran? One alternative is every art lover’s nightmare: collectors who buy artworks and never show them at all.

Tax policies can guide these decisions in the art world—especially as prices continue to soar and art’s capacity as an investment rises to the fore. Delaware’s lax rules have created a market for art-storage facilities—warehouses, essentially, where buyers stash their art commodities and skirt sales taxes. In Delaware, works of art might as well be figures on a spreadsheet or funds in an off-shore account. The public flips when super-villain Martin Shkreli buys the world’s only copy of the latest Wu-Tang Clan album and refuses to share it. But that’s nothing. Cash rules everything in the fine art world.

So the situation could be worse than a class of more exclusive and inaccessible private museums. But a shift toward exclusivity raises the cost to the public, since they are receiving less benefit. The tax code encourages major philanthropists to hold their art collections privately, but some may be doing so a little too privately. Same as it ever was: Andrew Mellon launched the National Gallery of Art in 1936 in an effort to deflect IRS charges against him over self-dealing and fraudulent philanthropy. (Mellon reportedly bought paintings, hid them in the basement of the Corcoran Gallery of Art, and deducted their value from his taxes, while claiming that he had donated them to his personal trust.)

Rales is a trustee at the National Gallery, and his giving to that institution could only be described as extremely generous. He is one of the donors who together pooled $30 million to finance the renovation of the East Building. He has given the National Gallery works by Picasso, Ellsworth Kelly, and Gordon Matta-Clark. In the last year, as a member of the museum’s Collectors Committee, Rales helped the museum to acquire pieces by Roni Horn, Cecily Brown, and Martha Rosler, boosting the presence of work by women in the museum. His devotion to art, and to the role of art in the public sphere, cannot be questioned.

And yet the Glenstone Foundation enables Rales to buy artworks for his estate and erect museum-quality buildings to showcase them on his property—where very few people may ever see them—without paying taxes on any of this activity. Even a secretive museum is better than no museum. But a private museum that raises eyebrows in Congress isn’t doing art any favors.

A rendering of the Thomas Phifer–designed addition to Glenstone. (Glenstone Foundation)