Shame and the Redemptive Effects of Philanthropy

At SAM, a lush gallery space bears the name of a WaMu bad guy. What’s a museum to do?

My daughter and I were strolling through the Seattle Art Museum recently, enjoying the treasures in the museum’s still-feels-new expansion wing, when I turned a corner and saw these words: “Kerry & Linda Killinger Gallery.”

I stood there, gobsmacked.

The Killinger Gallery: I’d never noticed it before. Donor names on gallery walls and theatre seats are so ubiquitous that they rarely register. But this one popped up as if lit up in Dan Flavin neon. Here was Seattle’s culpability in the global economic crisis laid bare. Here was our shame displayed.

Illustrations by Sean Alexander for City Arts

When commentators lay blame for the economic meltdown, they tend to aim at obvious targets: Lehman Brothers CEO Dick Fuld, Countrywide Financial’s Angelo Mozilo, or those arrogant bastards at AIG. But the housing bubble, with its rampant speculation and blind greed, couldn’t have happened without cheap, easy credit. And that’s where SAM benefactor Kerry Killinger came in.

Killinger became Washington Mutual’s CEO in 1990, and over the next eighteen years he turned a sleepy hinterland bank into a national powerhouse. During the housing run-up, Killinger turned the bank’s mortgage business into a massive money-spinner. In TV ads, WaMu invited borrowers to experience “the power of yes.”

As it turned out, the power of yes meant if you could push a wheelbarrow through the door, WaMu would gladly fill it with cash. “On a financial landscape littered with wreckage,” Peter Goodman and Gretchen Morgenson wrote in a recent New York Times investigation, “WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending.” The Times story exposed the boiler-room culture that existed within WaMu. Bank employees were pressured to pump out risky loans regardless of the borrower’s income and assets. WaMu booked healthy loan fees and considered defaults somebody else’s problem. The bank boomed and Killinger profited handsomely. Between 2001 and 2007, the WaMu CEO pocketed an estimated $88 million in compensation.

In 2007, all those bad loans began exploding. Foreclosures skyrocketed. As mortgage defaults began crippling WaMu, bank executives cleverly excluded subprime loan losses when calculating their yearly bonuses. In 2008, the housing market imploded, credit markets seized and the global economy collapsed. Killinger was fired just weeks before WaMu collapsed in late September, going down as the biggest bank failure in American history. In the great crash of 2008, Seattle’s hometown bank wasn’t an innocent victim. It was one of the main perpetrators.

Seattle and its art museum — in some ways, all of us — profited from WaMu’s go-go years too. Killinger’s name went up on the gallery wall because he and his wife, SAM board member Linda Killinger, gave more than $1 million to the capital campaign that built the new wing. But Kerry Killinger means more to the museum than a one-time donation. In 2002, WaMu and SAM cut a deal that allowed the bank to build its new headquarters on a chunk of SAM property while SAM got construction loans to help build the new wing, which would triple its exhibition space. As part of the creative agreement, WaMu agreed to a long-term $5.8-million-a-year lease for the eight floors of office space that exist above SAM’s new four-floor wing.

At a time when owners of professional sports teams routinely heist taxpayer money for new stadiums, SAM’s deal was a brilliant piece of civic-minded horse swapping. Today the deal looks a little less sweet. JPMorgan Chase, which took over the failed WaMu, recently announced that it wouldn’t honor WaMu’s lease for the eight office floors (owned by SAM) above the museum expansion. That leaves SAM with a $3.8 million hole in its $26.4 million annual budget.

As a tool to part the wealthy from their money, naming rights are hardly new. But in the past decade, with the economy awash with discretionary cash, museums discovered that just about any available space could become a revenue source. New York’s New Museum of Contemporary Art, for example, sold the naming rights to its bathrooms to a venture capitalist for $100,000.

SAM didn’t go that far, but it did put the names of benefactors on at least forty-nine galleries, studios, auditoriums, board rooms and waiting areas. To my mind, this is a fine expansion of a longstanding cultural tradition. Anything that moves money out of hedge funds and into the cultural economy — trickling down into paychecks for curators, designers, installers and artists — is a good thing.

The risk, of course, is that many benefactors are still alive. And when one of them turns notorious, things can get sticky. When John Eleuthere du Pont, heir to the chemical fortune, went off his meds and murdered an Olympic wrestler in 1996, officials at Villanova University hastily redubbed Du Pont Pavilion, named for the perp, “The Pavilion.” In 1997, Seton Hall University named its main business school building after Dennis Kozlowski, in honor of the Tyco CEO’s $3 million gift. Seven years later Kozlowski Hall was quietly renamed Jubilee Hall after its namesake was sent to prison on numerous counts of corporate fraud.

What does it take to get a donor’s name scraped off the wall? Quite a lot, it turns out. Murder will do it. Simple malfeasance won’t. A criminal conviction for price fixing wasn’t enough to cause Harvard University to remove the name of Sotheby’s owner Alfred Taubman from the school’s Taubman Center for State and Local Government (for which he had paid $15 million). White-collar crime has to rise to gross Kozlowskian proportions before the shame becomes too great for an institution to bear.

Which brings us back to the dilemma of the Killinger Gallery. Kerry Killinger doesn’t approach the level of Kozlowski or Alberto Vilar. He’s been accused of no crime. What he did was lead Seattle’s most powerful bank, and by extension the nation’s economy, straight off a cliff. And he made a hell of a lot of money doing it. Standing there in the gallery, staring at his name proudly displayed, I felt a wellspring of anger rise within me. Has he no shame? I thought. Has the museum none either? It felt like walking into the Ivan Boesky Gallery or the Kenneth Lay Rotunda.

But here’s the ethical dilemma. While the steam escaped my ears, my daughter and I were enjoying the fruits of Killinger and WaMu’s foolishly gathered profit. We were more than happy to stroll the gleaming floors and gaze at the African art on display. We love the expansion wing. And it wouldn’t exist if Kerry Killinger hadn’t championed the deal.

A Seattle Art Museum spokesperson told me SAM has no plans to rename or alter the Killinger Gallery. As I’ve wrestled with the issue over the past few weeks, I’ve come to agree with that decision. In fact, I’d make it stronger. Double the size of the Killinger name. Hell, commission Dan Flavin to actually put it in neon. (Whoops — Flavin died in 1996. Scratch that.)

The names on the walls at SAM aren’t merely thank-you notes from Mimi Gates, the SAM director who guided the museum’s expansion. They’re a form of family brand building. Look who’s up there: the Alhadeffs, the Benaroyas, the Grinsteins, the Skinners, the Brotmans, the Sarkowskys, the Stroums, the Runstads, the Wrights. In Seattle cultural circles those are powerful brands, built up through years of conspicuous — and, believe me, as a sometime recipient, well appreciated — arts philanthropy. Say the name Bagley Wright in this town, and you’ve conjured up an entire ethos of civic-minded noblesse oblige. To borrow a term from the Lacanian days of my youth, the names signify.

In 2009, the Killinger name signifies shame. Or at least it should. CEOs like Dick Fuld and Angelo Mozilo have been well pilloried in the media, but somehow Kerry Killinger has escaped much public notice. Perhaps it’s because he’s in Seattle, not New York, and in Seattle we consider it impolite to call attention to the embarrassments of the wealthy.

So by all means keep Killinger’s name on the gallery. Pay attention to it the next time you’re strolling through SAM. Steep yourself in the guilty pleasure of the four-story expansion wing, and feel a little uneasy about the fact that it was paid for by the economic pain we’re all now experiencing. Look at the Killinger family brand and remember that it stands for ruin. And think about the gallery name as its own work of performance art.

What “Killinger” signifies in the coming years will be determined by Kerry Killinger himself. In his post-WaMu life he has a shot at redemption. It’s been done before. After the fall of Drexel Burnham Lambert, former junk-bond king Michael Milken remade himself as a philanthropic machine. Andrew Carnegie turned from ruthless capitalist to the greatest library builder the world had ever seen. What will Kerry Killinger do? Here’s a thought. Perhaps he could help the museum find a new tenant to pay the rent on those eight empty floors above the expansion. It wouldn’t earn him absolution. But it would be a start. •