RIN:286 Senator Wants Smithsonian Records on -Axelrod

Senator Wants Smithsonian Records on $50 Million Gift

By Jacqueline TrescottWashington Post Staff Writer

Tuesday, May 4, 2004; Page C08

The chairman of the Senate Finance Committee yesterday publicly asked the Smithsonian for all documents related to a gift of rare musical instruments from Herbert Axelrod, a New Jersey businessman who has fled to Cuba after being indicted for tax evasion.

Sen. Charles E. Grassley (R-Iowa) said he wanted to see any papers related to the gift in 1998 of four Stradivarius musical instruments. At the time of the donation, they were said to be worth $50 million, though that figure has been questioned. The committee is investigating in-kind gifts to charities and the tax implications. "It is troubling that the Smithsonian may be turning a blind eye to tax mischief. Government agencies should be working in concert, not against each other. . . .Donors shouldn't be able to get away with playing the taxpayers like a fiddle," said Grassley, in a statement released yesterday.

Late last week the senator wrote Lawrence M. Small, the Smithsonian secretary, to request for all materials related to the donation. Grassley also asked to review all donations of more than $10 million received by the Smithsonian since Jan. 1, 2001.Officials at the Smithsonian said they were cooperating with the request.

Small, at a briefing for reporters after the quarterly meeting of the Smithsonian Board of Regents, said the Smithsonian didn't do any appraisal of the donations, which Axelrod claimed were worth $50 million.

"It is not the responsibility of any museum to do any appraising or tax evaluation," said Small. "We do not know what any donor does in the way of tax deductions at all. That is not our business. There is no role that we play in that. We accept the gift. In some cases we will acknowledge that we received the gift, but appraising is something that has to be done by certified appraisers."

Axelrod, 76, has been charged with trying to defraud the Internal Revenue Service by helping a former employee hide $700,000 in bonuses in a Swiss bank account. That charge has also brought into question his sale to the New Jersey Symphony Orchestra of 30 stringed instruments. The selling price was $18 million, but Axelrod had valued the instruments at $50 million.

Small said yesterday that the gift agreement with the Smithsonian did not mention a dollar value.Axelrod made his fortune by publishing pet books. His lawyer has said he has not broken any laws.

Small said he was "quite amazed" by the revelations about Axelrod. "He is someone whose relationship with the Smithsonian goes back 40 years, so I was quite surprised to read what I read," said Small. He added that the Smithsonian hasn't been drawn directly into the broader tax evasion case. "Whatever his personal case is . . . as far as I know [it doesn't have] anything to do with us."

Since 1994, Axelrod donated cash gifts to the Smithsonian totaling $2.8 million. The money went to the National Museum of Natural History and the National Museum of American History, including funding for performances, exhibitions and maintenance of the donated instruments -- two violins, a viola and a cello. The instruments were on loan to American History for 12 years before the 1998 donation.In other Smithsonian news, Small said that strong sales at the gift shops and Imax theaters indicated that visits to all the museums were increasing. In the first quarter of 2004, Small said the sales were up around 25 percent. "That's substantially better than last year," he said.

However, better counting methods of visitors produced a decrease in the number of visits compared with the same period a year earlier."Statistically our visitation is down slightly from last year, about 16 percent," said Small. "We don't think that reflects what is really going on at the Mall."

He attributed the variation to improvement in the way visitors are counted, partly as a result of new security methods. For instance, now staffers aren't counted as visitors because they have identification that allows them to bypass the electronic screening.

The Udvar-Hazy Center, the Dulles Airport adjunct to the National Air and Space Museum, continues to be a popular destination. It received 835,000 visitors since it opened in mid-December, making it the fourth most visited Smithsonian attraction, after, in order, the Air and Space Museum (on the Mall), Natural History and American History.