There were some that thought when MEARS announced its 2008 Auction House Policy and only Rob Lifson agreed to an open/ short notice compliance audit, that it was all just smoke and mirrors. Maybe true, but not in the way you might have thought…Today Rob saw smoke and we all looked in the mirror.
Rob Lifson’s auction has gotten solid attention, even though the catalogs have not arrived for bidders to review. The e-mail that I got from Rob was to inform me that his system, policies and procedures identified that a person with a financial interest in a lot had placed a bid on it. Rob’s first action was to cancel the bid and inform the interested parties, of which I was included because this is something I would have been looking for as part of the audit process. Rob also did it because it was the right thing to do.
The item in question was Lot# 8, 1921 Babe Ruth Pro Model Side-Written Bat. This bat had been consigned and listed on the Bushing and Kinunen For Sale Site at one time. The owner decided to consign it to an auction house where it did not meet the reserve. He discussed this with Dave Bushing, a person he has had a long term relationship with and Dave advised him to consign it to REA. Dave Bushing had possession of the bat and it was sent in with other items that he and Troy Kinunen consigned to Rob Lifson for the spring REA event.
After sending out an e-mail to the owner, Dave, Troy, and Rob Lifson and expressing my concerns about how this appeared, Rob Lifson made the following amendment to the listing for this lot:
Disclosure Notice: The owner of this lot has authorized MEARS authenticator David Bushing to oversee all arrangements regarding this consignment. All arrangements regarding the sale and consignment of this lot have been and will be overseen by David Bushing as an authorized agent on behalf of the owner. Reserve $25,000. Estimate $50,000+.
Was Dave Bushing the consigner of this item? No and he does not stand to benefit in any financial manner no matter what the bat brings. Dave felt he owed the owner something since it did not sell on his For Sale Site. The owner informed me that in previous auctions, others than those of REA, he has been permitted to bid on and win his own items if he paid both the buyer premium and the hammer fee. Specifically:
“I have been in auctions before where I elected to pay both sides of the commission rather than let an item go for a low price. In this case this is was what I thought I was doing. When informed by Rob that I couldn’t do this and that it was against the rules. I apologized and told him I was unaware of this not being allowed. I told him that I hadn’t read the rules and assumed that this would be ok. Not reading the rules is totally my fault.”
The REA rule #12 states:
In accordance with the applicable FCC regulations, under no circumstances may consignors bid on their own materials.
What may be O.K in other auction venues is not O.K with REA nor MEARS. Was Dave Bushing worried about having his name associated with this situation? He was not. He had no interest in the item and has openly declared his lots on the MEARS web site which he always has done and encouraged Rob to list his name in the catalog. Something MEARS had asked others to do as well, but didn’t happen. Dave has also agreed that in the future, he will provide a document to potential customers that seek his advice and management in their collections that states, regardless of the auction venue they chose… if they wish to have his services, they must agree not to bid on their own items, and if found to have done so, they will no longer be welcome as clients.
The question you may have is why tell this story now? Why not wait to cover it as part of the highly touted audit exposé? I have been in Washington for far too long to know that the first question asked is often “What did they know and when did they know it.” We know about this today and so do you. If I had waited, the conspiracy theorists will suggest it was kept out of the public eye until after the bidding was complete. REA does not run that type of auction and quite frankly, MEARS would have had no part in this either. We have all invested too much in this on a personal and professional level to try to game this situation.
If you don’t think we are taking this seriously, we are…all of us. If you run an auction house like the one described above that allows bidders to bid on their own items as long as you get your consignment and hammer fee, then I can see why the 2008 MEARS Auction Policy was not for you. Smoke and Mirrors? We saw smoke, looked in the mirror and we liked what we saw and we hope others do as well.
You can’t bid on your own items in a REA Auction. Rob Lifson won’t let you and he won’t hide it from me. I won’t hide the story and Dave Bushing…He’s got nothing to hide in this matter. It’s just that simple.
MEARS Auth, LLC