Secretiveness has been a key feature of dealers’ business practice for hundreds of years. But their fortress of opacity—dedicated to keeping collectors, and competitors, in the dark on all sorts of transactions—is beginning to crumble.

Scandals have certainly helped tear down the walls, with the publicity surrounding them increasing awareness of a largely unregulated field. In a Ponzi-style scheme, fugitive New York and L.A. art dealer Michel Cohen ripped off an impressive roster of fellow dealers and collectors to the tune of at least $70 million. Even more astonishing was the virtual collapse and shuttering in October of Salander-O’Reilly Galleries, in New York, following an avalanche of lawsuits regarding transactions that appear to have been less than aboveboard. The outcome in a number of these cases would have been quite different if, for example, consignors had simply gone to the trouble of filing uniform commercial code agreements with the gallery. That legal documentation would have ensured that the pictures were handled properly or, failing that, would have given the sellers a chance to retrieve them.

Roland Augustine, president of the powerful Art Dealers Association of America, has waged a kind of bureaucratic jihad for more transparency among the ADAA’s 180 members since taking over in 2006. “One of my first initiatives as president was to form a standards and practices committee to effectively analyze, evaluate and articulate an appropriate and relevant code of ethics,” says Augustine, who is arming the organization with other black-and-white measures related to openness, such as guarantees pertaining to authenticity and clear passage of title. That process is still a year from being completed and implemented. “While there may have been resistance in the earlier years to the notion of transparency,” he says, “it has become the norm—with obvious exceptions such as the current situation with Salander.”

ADAA member Paul Gray, of the Richard Gray Gallery in Chicago and New York, says his gallery now issues written consignment agreements to all its clients and artists and also honors requests for purchase agreements beyond the standard invoice that spell out the warranties on authenticity and clear title. Without having these warranties in writing, a buyer who, for example, finds out her Warhol isn’t a Warhol would have little leverage to return it to the seller. Similarly, a consignor who doesn’t have the uniform commercial code paperwork on art he offers for sale could see those works lumped in among the gallery’s assets should it go bankrupt.

A few skeptics question the prospects of this budding development. “The trend is toward [getting] more documents in writing,” says New York art world attorney Ralph Lerner, “but there are still things that are kept confidential.” Transparency, of course, can only be as clear as all parties allow it to be.

"Lifting the Veil" originally appeared in the January 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's January 2008 Table of Contents.