Recreating (and advancing) pk’s censored domains: Macroinformation.org &
Knatz.com / Personal / Stories / Themes / Business /
re 1974, @ K. 2002 09 14
|Deceive the Government||Tax Shelters||At its Invitation|
One Philadelphia lawyer decided that since Congress allowed depreciation on the machinery and tools of production, the “plate” used in printing graphic art might pass the new regulations for recognition as such a tool. So he was buying and selling volumes of copyrights of art images and commissioning the production of plates and “original” limited editions.
He knew nothing about art or the marketing of it. That’s where I came in.
The problem is, few modern editions are made from a single “plate.” In no cases were the plates regarded as permanent tools. Honor bound artists and ateliers to destroy, or at least mark as canceled, the plate from which a limited edition (which required just one plate — a single color etching, for example) had been made. In the case of silk-screen printing, the “plate” is washed from the screen at the end of each color run: or, if the “plate” is created by cut acetate, the acetate is peeled off and discarded. You couldn’t put it back right if you tried.
The production guy in the deals I was in on (I later learned) had the atelier make a set of phony “plates” to show the IRS. These were the plates that were sold with the copyright to the doctors and dentists and plumbers who suddenly decided, typically at fifteen minutes before midnight of December 31 that they didn’t want Uncle taking 50% of their nice income. The lawyer had an office on the top floor of a building facing Franklin Park. You could have landed a Cessna on his carpet (had the roof been removed): a pilot like Phil Lockwood or John Hunter could have landed their AirCam ultra-light within the length of the lawyer’s always-clear desk top. The lawyer filled his office annually at New Years with the prospects his shelter salesmen had found. The salesmen had been hammering them for five or six months. But 90% of the closes came just before midnight.
All the tax shelter lawyers would have been open and active at midnight, but my guy had them right there, feeding them cocktails.
When one edition of lithographs was ready I was surprised at its quality. It was by an artist I’d thought I’d succeeded in vetoing. But the lawyer must have made some special deals involving additional kick backs, so, if I wanted the up-front money, I was stuck with it. I phoned the buyer to tell him how “nice” his lithographs looked.
“Hello, Mr. Smith? This is Paul Knatz, PK Fine Arts, Ltd., the distributor of your Joe Blow edition.”
“Sorry, I don’t know you. You have the wrong number.”
“Just a moment: weren’t you in a certain office on Franklin Square in Philadelphia sometime before midnight, December 31st of last year?”
“Did you not buy something while you were there?”
“… Uh, yes.”
“Do you remember what you bought?”
“… Well … Some oil wells, some movies, some mining rights …”
“And the copyright with production plates for a multiple original lithograph by New York marine artist Joe Blow.”
“Who are you again?”
“Paul Knatz, PK Fine Arts, Ltd. Your distributor.”
“And why are you calling me?”
“I’ve called to tell you that your edition is ready. I think the chromist and printer did a pretty good job. I’m not sure when I’ll be releasing it, but it’s safe in the warehouse.”
“Oh. Really? How nice of you to call.”
He also told me that no one had ever called him before about any of his similar deals.
No one knew whether Congress would swallow or choke on the silk-screen “plates,” so this particular lawyer concentrated on railroads the following year. He bought a rusty half mile of unused siding and parked a dilapidated freight car on it. He filled the car with something like sawdust and sold time shares on the inventory at $30,000 the half-hour! He sold a lot of time shares. Still he was unhappy: for yet another year (late ’70s) his personal income was not quite seven figures.
The other tax shelter group I worked with wasn’t so altogether sleazy. Others, that my colleague-competitors dealt with, covered the diapason. There was one particular building on Madison Avenue that houses a great deal of such traffic. Going up on the elevators the sharks would recognize their ilk and tele-ID themselves:
They’d look at me. “Product.” Everyone but me had the eye glint of amyl nitrate if not coke. Or maybe each thought I had it too and he was the only one who didn’t.
There was another thing that killed me. After the signing, the buyer’s lawyers would call me, asking me to explain the contract to them! I always did my best. (Alas, I never sent my own legal consultant’s bill.)
By the way, what did it mean? What did I explain with ever so much difficulty to the hick town lawyers? It means, I said in essence, that if you can get away with it, then you can get away with it.
The poor sense that something is fishy but few decipher the real sense of it. Foutu encore, as the French say.
This expanded what had been a note in Masks: re: psychology.
|Stories||by Age||by Theme||by Others|