The great and the good who sit on the board of San Francisco’s prestigious Asian Art Museum are grappling with problems that run deeper than reviving recession-hit visitor numbers or repairing a dented endowment fund.
A financial derivative gone bad is threatening to become the last straw that tips the museum into bankruptcy – unless a stand-off involving the city and two prominent US financial institutions can be resolved within the next two weeks.
The museum’s problems have touched off a war of words in recent days. Dennis Herrera, San Francisco’s city attorney, fired off letters last week to JPMorgan Chase and bond insurer MBIA, accusing them of taking millions of dollars in fees from the city while washing their hands of the problems to which they have contributed.
“The city’s involvement is not just for the city attorney to write a letter and say it’s everyone else’s problem,” retorted Mitchell Sonkin, chief portfolio officer at MBIA. The city itself had short-changed the museum in recent years, forcing it to draw more heavily on its endowment, and should take part in a rescue.