Author: Derek Fincham

On Looting in Lebanon

 It should not really come as a surprise that Lebanon has experienced problems with looting given its rich ancient past, troubled recent past, and location at the crossroads of commerce in the Mediterranean.  It also has a connection with the Sevso Treasure—a forged Lebanese export permit meant that Lebanon intervened in the legal dispute with the Marquess of Northampton,  Croatia, and Hungary.  The Marquess’ Trust retained possession of course, and Lebanon withdrew from the action when the export permit was revealed to be a forgery.

But it also has a rich material heritage.  An anonymous looter tells Rana Moussaoui that:

“I know that these are historical artifacts, but much of the time I don’t know their exact value,” Abu Nayef admitted to AFP in his garden in Baalbeck.

“Sometimes we even move from one piece of land to another through tunnels, if we think we can find new vestiges,” he added.  . . .

“I have a wife and six children to support, and I do so through this business,” he explained.

This problem plagues a number of nations, but Lebanon has had particular difficulty.  Looting became widespread during the civil war between 1975-1990.  Funding for heritage preservation and policing is lacking, and there are a number of important sites.  In what is an otherwise sound article, Moussaoui criticizes the National Museum in Beirut for “showcasing 2,000 archaeological relics” while “hundreds of thousands of other pieces are gathering dust in storage”.  That ratio could probably be found in just about any museum; what goes on display is only the tip of the iceberg.  It may not be fair to criticize Lebanon for what is a common situation all over the World.

Rana Moussaoui, Lebanon’s archaeological sites a pillager’s paradise, AFP Mar.25, 2010.

Questions or Comments? Email me at derek.fincham@gmail.com

Interview with Cuno and Gerstenblith on Minnesota Public Radio

James Cuno, prominent critic of what he calls cultural nationalism, shares an extended interview with Prof. Patty Gerstenblith on Minnesota Public Radio.  Kimberley Alderman notes the “arguments themselves are not particularly unique to these discussions, but its kind of fun to hear the host and Gerstenblith sock it to Cuno on a couple of points (especially when he’s being smug).”  Is Cuno really smug?  Feel free to give the interview a listen and offer your thoughts in the comments below.

Here’s the MPR audio.

Larry Rothfield also notes the moderator “calls Cuno’s bluff”, and also notes the City University New York will be hosting a discussion on April 7th with Rothfield, Cuno, and Lawrence Coben in which focus will be placed on practical responses to the current looting of antiquities.

Questions or Comments? Email me at derek.fincham@gmail.com

Gardner Heist 20th Anniversary

The night before   after St. Patrick’s day, early on March 18, 1990, thieves stole 13 works from the Gardner Museum.  The lost works by Degas (including La Sortie de Pesage pictured here), Rembrandt, Vermeer, and Manet were stolen and some were cut from their frames, but were also stolen from the thousands of visitors who have visited the Gardner Museum in these twenty years.

The FBI and U.S. Attorney’s office are re-publicizing their offer of unconditional immunity to anyone who helps locate any of the 13 stolen works of art from the Gardner heist. Anyone with information regarding the Gardner Museum theft should contact the Boston FBI office at 1-617-742-5533.

There have been a slew of details on the theft in recent days, here are a few: 

  • Charles Hill, a former Scotland Yard detective, says art thieves are not that smart and do not deserve the glamour they receive from heists.
  • One of the least interesting items stolen in the infamous Gardner heist could turn over valuable clues.
Questions or Comments? Email me at derek.fincham@gmail.com

Footnotes 3.16.2010

  • 3,000 year-old wooden sarcophagus is returned to Egypt after being confiscated at the Miami Airport.
  • A Philadelphia museum sues over $1.5 million art swindle.
  • Suit filed over fake Native American art.
  • Efforts to battle sophisticated art-theft rings are halted by public misconception regarding the importance of art theft.
  • Unnoticed Chinese vase goes for 70 times it’s asking price at a public auction in Ireland.
  • Sotheby’s will sell at auction a Nazi-looted Jean Baptiste Camille Corot painting.
  • Egypt and Ecuador agree to return looted antiquities to their country of origin.
  • Three Russian brothers dominate the legal forgery market.
Questions or Comments? Email me at derek.fincham@gmail.com

Student Note on VARA

The Fall 2009 issue of the Rutgers Law Review has a student comment by Seth Tipton titled:  CONNOISSEURSHIP CORRECTED: PROTECTING THE ARTIST, THE PUBLIC AND THE ROLE OF ART MUSEUMS THROUGH THE AMENDMENT OF VARA.

From the introduction:

As will be discussed, VARA falls woefully short of granting meaningful and broad moral rights to artists. Most notably, deceased artists do not benefit from any of the protections of VARA. As such, it is imperative that Congress amend VARA to make the right of attribution perpetual and grant community standing to enforce
those rights where the artist is deceased. This Note will discuss the legal solutions that the amendment of the VARA could provide to ameliorate the hazards of the aforementioned issues of misattribution, increase the strength of American moral rights legislation, and protect and strengthen the role of museums in American
society.
Part I of this Note examines the inherent risks associated with assigning authorship to pieces of art. Although a highly important part of the sale and scholarship of art, this Part discusses the weaknesses of art connoisseurship. Also, this Part considers how those troubled methods of attribution cast considerable uncertainty in the assignation of authorship for the artwork of long-deceased authors. Part II maps the development of both the legal doctrine arising from misattribution and some of the solutions crafted by auction houses in response. This Part discusses the inadequacy and unpredictability of current common law doctrines developed to deal with misattribution. 
Part III introduces and explains the philosophical and intellectual underpinnings of moral rights and tracks the development of moral rights legislation in Europe. This Part discusses the inherent personal nature of moral rights and the key distinction between moral and economic rights.

Part IV goes on to introduce and explain state preservation statutes and the emergence of moral rights in American law. This Part also discusses the adoption of VARA. This Part explains that VARA’s
stated goal of protecting the artist’s honor and reputation is unattainable in light of its limitations when compared to European models.

Part V of this Note is a call on Congress to amend VARA. This Part posits that the European model of perpetual moral rights is a form of moral rights that should be implemented in American law. This Part goes on to suggest that perpetual moral rights could be combined with examples of community standing, readily available in state cultural preservation statutes throughout the United States, to vastly improve the actual protections VARA affords.
Lastly, Part VI revisits the solutions created by art auction houses to respond to liability for misattribution. This Part discusses how this model could be quickly and easily adapted as a pragmatic method of remedying a suit brought under an amended VARA. Armed with these examples and their success, Congress could
recreate a VARA that could ensure the protection of the moral rights of deceased artists, safeguard the societal position that museums occupy, and ensure that the public is given access to trustworthy and
objective information.
Questions or Comments? Email me at derek.fincham@gmail.com

Seminar Paper: The "Historic" Rehabilitation Tax Credit

I’m publishing here a series of papers written by Loyola law students in my ‘Property, Heritage and the Arts’ seminar from the Fall of 2009. This paper was written by Andrew Prihoda.
The “Historic” Rehabilitation Tax Credit
Why the Current Tax Code is Stifling Incentives
to Invest in Our Nation’s History
By: Andrew Prihoda

I.                 I.  Introduction

By affixing his signature to the National Historic Preservation Act (“NHPA”) in 1966,[1] President Johnson joined Congress in both declaring historical preservation to be a national prerogative and directing the federal government to take an active role in promoting preservation activities.  Congress had raised some awareness of the goal of preserving historical properties;[2] however, these statutes merely provided penalties for unauthorized injury to or destruction of such properties[3] and mandated categorization and, where possible, acquisition of such properties by the Secretary of the Interior.[4]  While these statutes represented a huge step toward the goal, neither had clearly stated the need for historic preservation by Federal action, nor provided a mechanism by which that preservation could be achieved.[5]
Congress enacted the NHPA in 1966 to fill both of these voids.  To remedy the first, Congress emphasized that preservation of our historical foundations as a living part of our community development was necessary “to give a sense of orientation to the American people”[6] and that, further, an expansion and acceleration of federal preservation activities was necessary to encourage and support private investment.[7]  Congress further elucidated this need in its 1980 amendments to the NHPA, declaring that increased knowledge and better administration of our historic resources will improve the planning and execution of federally sponsored projects and will assist the economic growth and development of the nation.[8]  Thus, the Act intended to foster a consistent and coherent policy of preservation among federal agencies, which would encourage “the use of historic properties to meet the contemporary needs of society.”[9]
Addressing the second, the NHPA authorized Interior to create and maintain an increased and improved categorization of historic properties, the National Register of Historic Places (“Register”), inclusion in which would qualify owners of such properties for federal grants-in-aid.[10]  To assist in this process, Congress later amended the Act to encourage the establishment of state historical preservation offices (SHPOs),[11] which were tasked to administer the state’s preservation plan, with responsibilities including identifying historic properties, determining the eligibility of, and nominating, properties for listing on the Register, and evaluating eligibility for Federal preservation incentives.[12]  Thus, the SHPOs came to assume the role of gatekeepers, maintaining access both to the Register and to the benefits attached to it. 
Although these programs were intended to provide the means by which to pursue a national preservation policy, Congress began to recognize they alone would not be enough to “overcome existing biases in favor of investment in new construction.”[13]  The original grant program’s limited fund availability made developers question whether the stringent application process required for inclusion on the Register, and the conditions imposed therewith, were worth the benefits received.  Therefore, Congress acted swiftly in 1976, creating multiple new incentives.  In addition to a new grant and loan program,[14] Congress enacted the Tax Reform Act of 1976 (“TRA”),[15] which created the first federal tax incentives for historic preservation.  Over the following 30 years, Congress has tinkered with the tax incentives to provide an incentive that is both workable and effective.
This paper will proceed in 3 parts.  Part II will track the attempts of Congress to revise and adjust the historic preservation tax incentives to serve the goals of the NHPA.  Part III will discuss tax credits generally and the current rules concerning the Federal rehabilitation credit.  Finally, Part IV will review recently a proposed amendment to the rehabilitation credit to determine whether it better satisfies the goals of the NHPA.

II.              II.  The “Historic” Tax Incentive

The TRA provided two alternative incentives for owners of qualified historic buildings which were used in the owner’s trade or business or for the production of income: first, owners could amortize, or write off, their entire qualified rehabilitation expense over a period of 60 months, thus speeding up a process that before required that the expense be considered a capital expenditure and depreciated over the life of the property;[16] second, in the alternative, owners who performed a “substantial rehabilitation” could elect to depreciate the entire building at a rate normally available only to owners or developers of new commercial building.[17]  What constitutes a “substantial rehabilitation” will be covered below in Part III.
To qualify for this tax treatment, a building must either have been included in the Register, or located in a district designated by the Secretary of the Interior or by the state or local government as historically significant,[18] and must have been used in the owner’s trade or business or for the production of income.[19]  Furthermore, the renovations must have been certified by the Secretary of the Interior as being consistent with the historic character of such property or district.[20]
Congress enacted further incentives in 1978 (“1978 Act”),[21] attempting to qualify more rehabilitation projects for tax benefits.  This new incentive provided an investment credit, under then-section 46 of the Internal Revenue Code, equal to 10% of the rehabilitation expenses, including reconstruction but excluding acquisition or enlargement costs, for a qualified commercial historic building.[22]  However, Congress relaxed the qualification rules, requiring only that the building have been in use for twenty years prior to the rehabilitation and that at least 75% of the existing walls be retained as existing walls.[23]  The 1978 Act did not override the TRA, but, to prevent double dipping by taxpayers, it did specifically limit the ability of a taxpayer to claim both the amortization incentive and the investment credit.[24]  The provision did not so limit the ability of a taxpayer to claim the investment credit and the accelerated deprecation incentive.
Largely encouraged by the success of the 1978 Act, Congress revisited the tax incentives in 1981’s Economic Recovery Tax Act (“ERTA”).[25]  The ERTA repealed the amortization and accelerated depreciation incentives under the TRA,[26] electing instead to expand and increase the credit program enacted in the 1978 Act.  In place of the 10% credit, the ERTA created a three-tier investment credit under which an owner could receive a credit of 15%, 20%, or 25% of rehabilitation expenditures depending on the classification of the property rehabilitated.[27] The ERTA raised the minimum age for a qualified rehabilitated building from twenty to thirty years,[28] while retaining the “walls test” and the restriction to commercial buildings.[29]  Further, the ERTA allowed for a 25% investment credit for certified historic structures, retaining the definition of such structures under the TRA.[30]  Preservationists cheered the strengthening of the incentives, which one article estimated would “stimulate an additional 24 percent in annual growth of restoration activities.”[31]
However, taxpayers quickly realized an opportunity to reduce their tax liabilities to negligible levels by combining multiple deductions and credits from activities outside their main income-producing activity with the alternative minimum tax to create a “tax shelter.”  Therefore, in an attempt to limit the availability of these structures, Congress reversed course with the Tax Reform Act of 1986 (“1986 Act”), a complete overhaul of the Internal Revenue Code of 1954.[32]  Reflecting a policy of reducing credit amounts, the 1986 Act replaces the three-tier rehabilitation credit with a two-tier credit.[33]  This allows a credit of only 20% of rehabilitation expenses for certified historic structures, and 10% for buildings “other than certified historic structures,” which were originally placed in service prior to 1936.[34] 
Additionally, the 1986 Act restricts the ability of taxpayers to claim losses or credits earned from activities in which the taxpayer did not materially participate.[35]  This provision disallows, or postpones, any losses or credits earned from such “passive activities,”[36] but provide an exception for individual taxpayers in the case of passive rental real estate losses or credits, in which the individual holds at least a 10% interest in such an activity.[37]  This exception allows such an individual to claim a deduction of up to $25,000 of the amount of credit or loss from the passive activity.[38]  However, this amount is reduced, or “phased out,” by the amount by which the individual’s adjusted gross income (“AGI”) exceeds $100,000.[39]  Thus, the Act allows an individual whose AGI is $100,000 or less to claim a deduction of $25,000, but prohibits any allowance where the individual’s AGI exceeds $150,000. 
The 1986 Act does make an attempt to maintain the rehabilitation incentive by making a further exception to the rental real estate allowance where a taxpayer claims the rehabilitation credit.  For these taxpayers, these sections relax the participation requirement[40] and raise the phase-out limitation from $100,000 to $200,000.[41]  Thus, a taxpayer who participates in any measure and whose AGI is less than $250,000 may claim a deduction of up to $25,000 of his qualified rehabilitation expenses per year.  Although this provision may have the best of intentions, the restrictions of § 469 still have the effect of reducing the ability of many taxpayers, particularly individuals, to claim the rehabilitation tax credit in the first place.  This will be discussed in more detail in the next section.
With only minimal amendments, the 1986 Act remains largely the law in force.[42]  The next section of this paper will discuss this current law and its implications for the future of historic preservation. 
Additionally, on Oct. 1, 2009, members of the U.S. Senate and House of Representatives introduced legislation[43] that would make potentially beneficial changes to the federal rehabilitation tax credit and provide a greater incentive for the reuse of historic and older buildings.  Part IV of this paper will review these suggested changes and discuss whether they will help the tax incentive program better serve the goals of the NHPA.

III.            The Federal Rehabilitation Credit

As a preliminary consideration, this paper wishes to define a tax “credit” and, further, to distinguish a “credit” from a “deduction.”  A tax credit is a dollar-for-dollar reduction in tax owed. A tax deduction, on the other hand, is a reduction in taxable income, and is considered before computing the tax owed.  Thus, because the amount of tax owed is based on a percentage of taxable income, the taxable value of a credit greatly outweighs the value of a deduction.
As a second consideration, the current Internal Revenue Code (26 U.S.C.) considers the rehabilitation credit as one of several credits[44] that comprise the investment credit under section 46.  The investment credit, in turn, is subject to the section 38 General Business Credit.[45]  Generally, section 38 uses the alternative minimum tax provided under I.R.C. § 55 to limit the amount any credit allowed under the section.[46]  This effectively restricts the use of business credits to offset alternative minimum tax liability.  Additionally, like other business credits, the rehabilitation credit is available only for properties used by the taxpayer in his trade or business or for the production of income.[47]
Section 47 of the Internal Revenue Code authorizes the rehabilitation credit and governs its mechanics.  Generally, the section serves four functions: first, it describes the amounts of the credit;[48] second, it determines the timing for taking rehabilitation expenditures into account;[49] third, and perhaps most importantly, it defines property to which the section applies;[50] and, fourth, it provides a process to accelerate recovery of the credit in certain situations.[51]
In determining the amount of the credit, as mentioned above in Part II, section 47 varies based on the classification of the building: for a building which is a “certified historic structure,” the owner, developer, or, under certain circumstances, lessee may claim a credit for 20% of the “qualified rehabilitation expenses;” for a building which is not a certified historic structure, but was originally placed in service prior to 1936, the credit is 10%.[52]  Definitions of these terms will be discussed below.
As discussed in Part II, the current credit is a reduction from the high-water mark of 25% set under the 1981 ERTA.[53]  The NPS is quick to trumpet the successes of the preservation incentives, including over $50 billion in investment since 1976, including a record $5.64 billion in 2008 alone.[54]  However, a more careful review of the annual report reveals that investment in historic properties declined to record lows during the period immediately following the 1986 Act, and did not begin to rise until the more business-friendly tax acts beginning in the late 1990s.[55]  So, while it is true that the two decades since 1986 have seen an enormous growth in the investment in historic preservation, this likely has been spurred less by a true availability of the tax credit and more by corporations seeking tax shelters contrary to the purposes of the 1986 Act if the first place.
Next, the timing provisions require that the expenditures be taken into account in the year in which the building is placed in service.[56]  Generally, this means that the project has been completed to a point, which would allow for occupancy of either the entire building or, at least, of some identifiable portion of the building.[57]  If the building is never removed from service, however, the “placed in service” date will be the same as the project completion date.[58]  Additionally, if the building is used for personal purposes after the rehabilitation, the credit will not be allowed until the property is converted to business use.[59]  While these provisions are important to designate when expenditures may be claimed, they also serve to reinforce the allowance of the credit only for income-producing property.
The section does permit for an early accounting of the expenditures in the case of self-rehabilitated buildings, where more than 50% of the expenditures will be made directly by the taxpayer.[60]  These so-called “progress expenditures” are proper where taxpayer reasonably expects that the rehabilitation will be completed within a two-year period and that the building will be a qualified rehabilitated building upon completion.[61]  Additionally, no amount may be claimed under this section during the year in which the building is put in service, because at that point the entire credit becomes available.[62]
Application of section 47(d) requires an election by the taxpayer, which is irrevocable except with consent of the Secretary of the Treasury.[63]  Progress expenditures may provide a measure of relief to individual developer-taxpayers; however, they additionally seem geared toward assisting corporate taxpayers, which have large amounts of available cash and do not require financing to complete the rehabilitation project.
Turning, finally, to the definitions, the section clearly delineates between two categories of buildings to determine the credit amount.  These definitions depend on certain characteristics of the building, and each carries with it a different set of responsibilities for the developer.  To claim the credit under either category, the building must have undergone a “substantial rehabilitation,” which requires that the qualified rehabilitation expenditures must exceed the greater of the buildings adjusted basis or $5,000, over a 24-month period including or ending in the taxable year in which the taxpayer claims the credit.[64]  Alternatively, owners may qualify for a 60-month timeframe, where they have made greater upfront effort to develop a phased architectural plan.[65]
Preliminarily, this paper should define “qualified rehabilitation expenses.”  These include any depreciable expenditure for the rehabilitation of property, which is nonresidential real property, residential rental property, or an addition or improvement to either of the above.[66]  Certain costs, however, are specifically excluded by section 47.  For instance, neither acquisition costs, nor costs to enlarge an existing structure will be included.[67] 
Moving to the first category of rehabilitated property, a “certified historic structure,” [68] is either a building that is listed in the National Register of Historic Places (“Register”), or that is located in a “registered historic district” and has been certified by the Secretary of the Interior as being historically significant to that district.  A “registered historic district” must either be listed in the Register, or substantially meet all the requirements for listing and have been designated by a state or local government “as containing criteria that will substantially achieve the purpose of preserving and rehabilitating buildings of historic significance to the district.”[69]
Where a building meets the above requirements, the National Park Service (NPS) and state and/or local historic preservation organization, where available, must conduct a thorough review of the building and any proposed rehabilitation project to ensure that the project meets the standards set forth by the Secretary of the Interior.[70]  During this certification process, the developer completes a three-part application, in which he must certify the historic nature of the building,[71] describe in detail the work to be done,[72] and, upon completion, submit evidence of the rehabilitation for final certification by Interior.[73]  The NPS recommends that Parts I and II be certified before beginning construction, as a denial at either stage may disallow the tax credit.[74] 
Additionally, the NPS charges an application fee based on the size of the rehabilitation ranging from free, for projects with a budget under $20,000, to $2,500, for projects exceeding $1 million.[75]  Furthermore, any property certified by Interior as historic bears an additional burden as it must meet Interior’s guidelines regarding its treatment once it is put in service.[76]
Beyond the “certified historic structure,” section 47 extends the credit to “qualified rehabilitated buildings.” [77]  This category includes buildings placed in service prior to 1936, but which are not “certified historic structures,” which have been “substantially rehabilitated,” and which satisfy the “walls test.”[78]  As mentioned in Part II, the “walls test” requires that at least 75% of the exterior walls of the original building are retained, at least 50% as external walls, and that at least 75% of the interior framework also be retained.[79]
The requirements for a “qualified rehabilitated building” are more relaxed than those for a “certified historic structure,” but are still relatively inaccessible to individual owners.  For one thing, while the 20% certified historic structure credit may reach housing, albeit only rental housing, the 10% credit is not allowed for any residential property.  Additionally, there are fewer and fewer buildings left which have been in use since 1936 and the number is only growing smaller.  This trend is slowly rendering ineffective the 10% credit.  Allowing for use of the credit in more residential situations and a more reasonable age requirement would certainly open the door for more historic investment.
As an additional limiting factor affecting the ability of individuals to access either category, the substantial rehabilitation requirements do not take into account inflation or higher real estate costs in certain parts of the country.  Therefore, in some areas it is more difficult for individuals or persons with smaller rehabilitation projects to reach the substantial rehabilitation’s adjusted basis requirement.  A relaxed or reduced substantial rehabilitation requirement that considers real estate values across the country would very much help to satisfy the goals of preservation.
Further making both categories inaccessible are the “passive loss” rules of I.R.C. § 469, described above in Part II.[80]  As previously mentioned, where a taxpayer does not materially participate in an income-producing activity, any loss or credit from that activity is disallowed until a later year when the taxpayer does materially participate.  Although there is an exception to this disallowance in the case of rental real estate, the exception does not make this credit any more accessible because it converts the credit into a deduction to be taken before the assessment of tax.  Losing the dollar-for-dollar tax reduction of the credit renders this incentive far less beneficial or attractive.
Moreover, taxpayer-owners are unable to transfer or alienate the credits, without resorting to some convoluted “investment vehicle.”[81]  The investment vehicle of choice for most developers is the flow-through entity, typically in the form of a limited partnership or limited liability company.[82]  Using this vehicle, the developer may seek out an investor in a higher tax bracket, like a bank or corporation, who might provide much-need upfront capital for the rehabilitation in return for use of the credit.  This concept, therefore, provides flexibility in the allocation of profits from the building once placed in service, while allowing the rehabilitation credit to flow through to an investor, who might be able to use it.[83] 
This process, however, is still cumbersome and requires the release of some rights.  Additionally, taken together with the passive loss limitation, it could keep a potential developer from being able to enjoy the tax benefit, thus reducing the incentive to invest in a historic property in the first place.  It is likely that both of these issues could be resolved by allowing open transferability or refund of the credit, which would enable lower income owners to obtain equity necessary to complete a rehabilitation project. Both measures have been employed with great success by a few state rehabilitation credit programs.[84]
Part II of this paper mentioned that efforts were under way in Congress to amend the rehabilitation tax credit.  These proposed amendments address many of these concerns.  The next section of this paper will briefly discuss this legislative effort.

IV.           The CRRA: Rehabilitating the Rehabilitation Credit

On October 1, 2009, members of both houses of Congress proposed identical bills to amend the historic tax credit.[85] This new bill, popularly known in the House of Representatives as the “Community Restoration and Revitalization Act of 2009” (“CRRA”), is not a complete overhaul of the credit, but provides several resolutions to the problems discusses above in Part III.  This section will explore the main provisions of the CRRA and discuss their impact on preservation efforts.
The first proposal is an increase in the credit amount for what are termed “smaller projects.”  The CRRA provides for a 30% credit in cases where the qualified rehabilitation expenditures are less than $7.5 million.[86]  On its face, this provision appears to hearken back to the ERTA of 1981,[87] which should have preservationists jumping for joy.  Additionally, it reflects recognition by Congress that individuals and small businesses have difficulties accessing the credit.
The proposed amendment would provide a second fix by allowing rental residential property to qualify for the 10% credit.[88]  Currently, section 47 allows a credit for rehabilitation of housing where the property is a “certified historic structure.”  Because housing is a popular use of rehabilitated property, this proposal would satisfy well the goal of the NHPA to use “historic properties to meet the contemporary needs of society.”[89]  As an added benefit, Congress would create more incentive[90] to rehabilitate older properties located in downtown settings to provide moderate- to low-rent housing for the people who need it most.
Third, the CRRA would provide for a more practical modification of the age requirement for non-historic property, by replacing “placed in service before 1936” with “placed in service at least 50 years prior to the rehabilitation.”[91]  As mentioned above, the stock of available non-historic buildings put in service prior to 1936 is dwindling.  Therefore, by opening the 10% credit to a wider category of buildings, Congress is both protecting the effectiveness of that credit, and further providing for NHPA goals by encouraging use of older properties.
Fourth, the CRRA would permit recovery of the credit where the rehabilitation may be classified as moderate, rather than substantial.[92]  The “moderate rehabilitation” requirement would modify the current rules by requiring that rehabilitation expenditures exceed only one-half the adjusted basis, instead of the full basis.[93]  As mentioned above, this provision would take into account inflation and more expensive real estate markets, so not to penalize developers in such areas.  Beyond merely opening up the credit to more properties, this policy will promote the goals of the NHPA by encouraging more minor rehabilitations and preventative maintenance.
Finally,[94] and most importantly in the view of this paper, the CRRA would permit free transferability of the rehabilitation credit.[95]  Allowing this free transferability would alleviate, if not eliminate, the problems created by the passive loss rules, without destroying the policy of section 469.  Additionally, to prevent fraud or the reemergence of tax shelters, the amendment would cap the transferable amount of the credit at $5 million.[96]  The ability to transfer or alienate the rehabilitation credit will allow the developer to seek and receive capital and equity necessary to complete the rehabilitation project without being forced to resort to an investment vehicle.
While the proposed amendment does not go so far as to allow taxpayers to claim the rehabilitation credit for non-income producing residential property, it seems that it will provide significant assistance for a program that was struggling to meet its purpose.  Hopefully, Congress will pass this amendment the second time around, and allow the rehabilitation credit to be more accessible and to better serve the goals of preservation.

V.              Conclusion

The foregoing is not intended to be an indictment of the current federal rehabilitation tax credit program.  This paper merely set out to explain the development of this program, with an eye toward the principles, which underlie that development.  Within that framework, this paper concludes that the current tax rules severely limit the ability of individuals and small business owners to claim the federal rehabilitation tax credit.  For the many reasons stated above in Parts III and IV, investment in rehabilitation projects dropped 75% between 1986 and 1997.[97]  Only recently, and because of business friendly legislation, have the investment figures begun to rise again.
However, this influx of corporate cash is not sustainable and continued effectiveness will require some modification to the rehabilitation credit system itself.  Fortunately, Congress has gotten the message and is beginning to bring the system more in line with the “historic” rehabilitation credit.  With an eye toward the future of historic preservation, it is this paper’s hope that Congress acts quickly and decisively to forge a more permanent solution to what has historically been a very successful program.
2
[1] National Historic Preservation Act of 1966, Pub. L. No. 89-665, 80 Stat. 915 (codified as amended at 16 U.S.C. § 470a-470x (2006) [hereinafter NHPA]).
[2] See Antiquities Act of 1906, ch. 3060, § 2, 34 Stat. 225, 225 (codified at 16 U.S.C. § 431) (authorizing the President to declare national monuments); and Historic Sites Act of 1935, ch. 593, § 1, 49 Stat. 666, 666 (codified at 16 U.S.C. § 461) (declaring “a national policy to preserve for public use historic sites, buildings, and objects of national significance for the inspiration and benefit of the people of the United States”).
[3] Antiquities Act § 1 (codified at 16 U.S.C. § 433).
[4] Historic Sites Act § 2 (codified at 16 U.S.C. § 462).
[5] Advisory Counsel on Historic Pres., An Overview of Federal Historic Preservation Case Law, 1966-1996, A.L.I.-A.B.A., April 2007, at 215, 220 [hereinafter Overview].
[6] § 1(b), 80 Stat., supra note 1, at 915.
[7] Id. at § 1(d).
[8] Pub. L. No. 96-515, § 1(b)(6), 94 Stat. 2987, 2987 (1980) (codified at NHPA § 470(b)(6)).
[9] Overview, supra note 5, at 220.
[10] Overview, supra note 5, at 221
[11] sec. 201(a), § 101(b)(1), 94 Stat at 2988 (codified at NHPA § 470a(e)).
[12] Pub. L. No. 102-575, sec. 4004(4), §101(b)(6)(A), 106 Stat. 4600, 4754-55 (1992) (codified at NHPA § 470a(b)(3)).
[13] Susan Feigenbaum & Thomas Jenkinson, Government Incentives for Historic Preservation, 37 Nat’l Tax J. 113, 113 (1984).
[14] Pub. L. No. 94-222, 90 Stat. 1320 (1976) (codified at NHPA § 470a(e)(1)-(2)).
[15] Tax Reform Act of 1976, Pub. L. 94-455, § 2124, 90 Stat 1916 (codified as amended at I.R.C. § 47 (2006)).
[16] § 2124(a)(1), 90 Stat. at 1916, repealed by Economic Recovery Tax Act of 1981, Pub. L. No. 97-34, § 212(d)(1), 95 Stat 172, 239.
[17] § 2124(d)(1), 90 Stat. at 1919, repealed by Economic Recovery Tax Act, § 212(d)(1).
[18] § 2124(a)(1), 90 Stat. at 1917 (current version at I.R.C. § 47(c)(3)).  Buildings meeting this requirement are commonly referred to as “certified historic structures.”
[19] Id. (current version at I.R.C. § 47(c)(1)(A)(iv)).  To qualify, the current statute requires that “depreciation . . . is allowable with respect to such building,” which, under I.R.C. § 167(a), only applies to property “used in the trade or business, or . . . held for the production of income.”
[20] Id. (current version at I.R.C. § 47(c)(2)(C)).
[21] Revenue Act of 1978, Pub. L. No. 95-600, § 315, 92 Stat. 2828 (codified as amended at I.R.C. § 47).
[22] Id.
[23] Id. § 315(b).  Structures meeting the twenty-year requirement are commonly referred to as “qualified rehabilitated buildings.”
[24] Id. § 315(c).
[25] Economic Recovery Tax Act of 1981, Pub. L. No. 97-34, § 212, 95 Stat 172.
[26] § 212(d)(1), 95 Stat. at 239.
[27] § 212(a)(2), 95 Stat. at 236 (codified as amended at I.R.C. § 47).
[28] § 212(b), 95 Stat. at 236.
[29] Id.
[30] Id. at 238.
[31] Feigenbaum & Jenkinson, supra note 13, at 117.
[32] Tax Reform Act of 1986, Pub. L. No. 99-514, 100 Stat. 2085.  This Act is now designated the “Internal Revenue Code of 1986,” and represents the current law on the subject.
[33] § 251(a), 100 Stat. at 2183 (codified at I.R.C. § 47).
[34] Id.
[35] § 501, 100 Stat. at 2233 (codified at I.R.C. § 469). “A taxpayer shall be treated as materially participating in an activity only if the taxpayer is involved in the operations of the activity on a basis which is regular, continuous, and substantial.”  I.R.C. § 469(h)(1).    Section 469(c)(1) designates activities that do not satisfy this material participation requirement as “passive activities.” 
[36] Id.  Any losses or credits earned from passive activities are disallowed in the current tax year and must be postponed until a later year in which the activity is no longer passive, or in which the taxpayer’s completely disposes of his interest in the activity.
[37] § 501(a), 100 Stat. at 2237-8 (codified at I.R.C. § 469(i)).
[38] Id.
[39] Id. (codified at I.R.C. § 469(i)(3)(A)).  Generally, AGI is determined by subtracting from a taxpayer’s gross income several categories of deductions and expenses listed under I.R.C. § 62.  For the considerations of § 469, AGI further makes further exclusions but these are beyond the scope of this paper and will not be discussed.  § 469(i)(3)(F).
[40] Id. (codified at I.R.C. § 469(i)(6)(B)).
[41] Id. (codified at I.R.C. § 469(i)(3)(B)).
[42] Thomas R. Curran, Jr., The Rehabilitation Tax Credit: Historic Preservation, Affordable Housing, and Community Development, 6 J. Affordable Housing & Community Dev. L. 145, 146 (1997).
[43] Community Restoration and Revitalization Act of 2009, H.R. 3715, 111th Cong. (2009); S. 1743, 111th Cong. (2009).
[44] I.R.C. § 46.  The investment credit is the sum of the rehabilitation credit, the energy credit, the qualifying advanced coal project credit, the qualifying gasification project credit, and the qualifying advanced energy project credit.  This distinction may be important where a taxpayer claims several of these credits; however, this paper is solely concerned with the rehabilitation credit, and will not consider the intersection with these other credits.
[45] § 38(b).
[46] § 38(c).  Generally, a business credit may not exceed the excess of the taxpayer’s income tax liability over either the tentative minimum tax, or 25% of the amount by which the taxpayer’s taxable income exceeds $25,000, whichever is greater. 
[47] § 47(c)(1)(A)(iv).
[48] § 47(a).
[49] § 47(b).
[50] § 47(c).
[51] § 47(d).
[52] § 47 (a).
[53] See supra note 25.
[54] 2008 Nat’l Park Serv. Ann. Rep. 2.  Further, NPS notes that more than 67,000 jobs were created by rehabilitation projects in 2008, providing evidence of additional benefits beyond preservation.
[55] Id. at 2-3.  These included reductions in the capital gains tax in 1997 and 2003, and the allowance of more tax deferral procedures.
[56] § 47(b)(1).
[57] Treas. Reg. § 1.46-3(d) (as amended in 1995).
[58] Id.
[59] Id.
[60] § 47(d).
[61] § 47(d)(2).
[62] § 47(d)(3(F).
[63] § 47(d)(5).
[64] § 47(c)(1)(C).  Adjusted basis is a calculation of the amount of capital a taxpayer has in property.  To compute, the taxpayer begins with his purchase price, minus the cost of land, and adds the value of any improvements he has made, while subtracting any depreciation he has taken on the property.  Where the property was obtained by gift, the previous owner’s basis is transferred to the taxpayer.  Similarly, where the taxpayer obtained the property by devise, the fair market value of the property at the time of the testator’s death is the basis.
[65] § 47(c)(1)(C)(ii).
[66] § 47(c)(2)(A)
[67] § 47(c)(2)(B).  Also excluded are any expenditures to rehabilitate a certified historic structure, which have not been certified by the Secretary of Interior; expenditures to rehabilitate tax-exempt property; or expenditures incurred by a lessee whose lease term is expected to expire before the depreciation recovery period for the property as defined under I.R.C. § 168.
[68] § 47(c)(3).
[69] § 47(c)(3)(B).
[70] The Secretary of the Interior’s Standards for the Treatment of Historic Properties, 36 C.F.R. §§ 67-68 (1995), illustrates the preservation activities supported by the NHPA, including “protection, rehabilitation, restoration, and reconstruction,” and the criteria NPS uses to certify the project.
[71] 36 C.F.R. §§ 67.4-5.  Generally, only the owner of the property may apply for this certification.  However, state historical preservation organizations and the Secretary of the Interior may initiate an application on their own, after giving notice to the owner and permitting a 30-day period for the owner to contest the application.
[72] 36 C.F.R. § 67.6.  A typical application will include detailed schematics, plans, and drawings compiled by professional architects, the cost of which can exceed the cost of the rehabilitation.  These costs are not barred from recovery with the credit, so a taxpayer may recoup at least some of this burdensome expense.
[73] 36 C.F.R. § 67.7.  This includes photographic and other evidence, detailing all changes in the property.
[74] 36 C.F.R. § 67.6(a)(1).
[75] 36 C.F.R. § 67.11.
[76] 36 C.F.R. § 68.
[77] I.R.C. § 47(c)(1).
[78] § 47(c)(1)(A).
[79] § 47(c)(1)(A)(iii).
[80] See supra notes 35-41.
[81] Curran, supra note 42 at 154-55.
[82] Id.
[83] Id. at 155.
[84] Janette M. Lohman et al., State Rehabilitation Tax Credits: A Rebirth of History Across the U.S., J. Multistate Tax’n & Incentives, Nov.-Dec. 2000 at 1. For example, Missouri, Louisiana, and Maryland permit some form of transferability, while Iowa has a refund provision.
[85] Community Restoration and Revitalization Act of 2009, supra note 43 [hereinafter “CRRA”].
[86] CRRA § 2.
[87] ERTA, supra note 25.
[88] CRRA § 3.
[89] See supra note 9.
[90] This is in addition to the low-income housing credit available under I.R.C. § 42.
[91] CRRA § 4(a).
[92] CRRA § 7.
[93] Id.
[94] The CRRA provides a few other amendments to the rehabilitation credit, including providing better interaction with the energy credit and with state rehabilitation credits, and allowing the use of the rehabilitation credit for tax-exempt property.  However, because these topics received no treatment in this paper, it would seem out of place to discuss them in much detail here.
[95] CRRA § 6(a).
[96] Id.
[97] 2 Christopher J. Duerksen, Rathkopf’s The Law of Zoning and Planning § 19:46 (4th ed. 1997).
Questions or Comments? Email me at derek.fincham@gmail.com

Footnotes

  • Taped phone conversation are coming to light in the da Vinci trial in Scotland.
  • More on how the key witness, Ted Gardiner, in the Four Corners looted native art case committed suicide.
  • DNA evidence may offer some new leads in the Isabella Stewart Gardner Museum art theft with the 20 year anniversary approaching, while the museum hosted a talk, stating that “everyone is a suspect.”
  • 2010 Summer internships available with the LCCHP, the Lawyer’s Committee for Cultural Heritage Preservation
  • University of Seville engineers have created a way to monitor monuments by remote control.
  • The son and daughter-in-law of Ansel Adams have filed suit to stop the Fresno Metropolitan Museum of art from auctioning off Adams’ works.
  • With the increased revenue from tourists comes the increased risk of damage to cultural sites.
  • Mark Durney gives an economic view on forgery.
Questions or Comments? Email me at derek.fincham@gmail.com

Peru has Dropped Some Claims Against Yale

Peru has decided not to allege fraud and conspiracy claims against Yale University in its lawsuit over objects removed from Machu Picchu in the early part of the 20th century.  One of the main points of contention in the dispute is whether this action is timely.  It surely would have if brought soon after the objects were removed, but Peru will either have to justify waiting decades to bring a claim, or convince a court that Peruvian law applies—perhaps under the lex originis rule. 

For background on the dispute see these posts. 

From the AP:

The withdrawal of some claims comes after Peru hired new lawyers who said the move would simplify the case and “facilitate resolution” of the dispute. Yale’s lawyers had warned that the claims violated civil procedures prohibiting frivolous arguments.

The fraud allegations that were withdrawn accused Yale of intending to deceive Peru by promising to return the artifacts and conspiring with Bingham to retain the artifacts unlawfully by fraudulently assuring that Yale would return the artifacts when Peru demanded.

“Peru has dropped all claims of Yale having intentionally done anything wrong,” said Jonathan Freiman, Yale’s attorney. “We’re glad that they have done so, but we think the rest of the case is equally misguided and should be withdrawn, as well.” . . .

“Yale has wholly betrayed Peru’s trust and confidence,” the lawsuit states. “Yale has exploited its holding of the Machu Picchu collection for commercial and financial gain at the expense of the interests of the Peruvian people and in violation of the fiduciary obligations that Yale owes Peru.”

  1. John Christoffersen, Peru lifts some Machu Picchu claims against Yale, AP, March 10, 2010 (last visited Mar 10, 2010).
Questions or Comments? Email me at derek.fincham@gmail.com

Art Crime Exhibition Opening in Washington DC on March 22

ARCA staff and volunteers are putting together an exhibit at the National Museum of Crime and Punishment, and there is an opening on March 22.  Here are the details:
DilValArt 
in partnership with
  ARCA 
 cordially invites you to the opening of the exhibit
The Dark Arts; Thieves, Forgers and Tomb Raiders
artcrimes1art crimes 4art crimes 3
March 22, 2010  
6:00-8:30pm  
at the National Museum of Crime & Punishment
 575 7th Street NW

6:00- guests are invited to tour the museum at their leisure

7:00- Curator Colette Loll Marvin presents the exhibit and guest speakers:

 Anthony Amore
Director of Security for the Isabella Stuart Gardner Museum
will discuss the largest art theft in history on its 20th anniversary.

Robert K. Wittman
  former special agent & senior investigator for the FBI Art Crime Team
will discuss cases from his distinguished career as detailed in his new book Priceless.

8:00- Reception with light hors D’oeuvres and drinks will follow.

RSVP is required by 3/15/2010 to rachael@crimemuseum.org  
 You must have your invitation to enter this event.
 Special thanks to:
Art Guard
Ferretti Designs 
Corcoran Caterering
Windows Caterering

*ARCA (Association for Research into Crimes against Art)
 is an interdisciplinary think tank/research group on contemporary issues in art crime. This international non-profit organization studies issues in art crime & cultural property protection, runs educational programs, & consults on art protection & recovery issues brought to them by police, governments, museums, places of worship, & other public institutions.
blacksomuchfun600x145
NMCP footer
Questions or Comments? Email me at derek.fincham@gmail.com

Law and Art: Ethics, Aesthetics and Justice at the Tate Modern

There looks to be a terrific symposium at the Tate Modern on Tuesday March 23.  Here are the details:

Tuesday 23 March 2010, 10.00–18.00

This unique and enticing one day symposium brings together world-leading scholars to reflect on the relationship between law and art.

Speakers offer unique perspectives on the relationship between law and art. Some are philosophical while others discuss issues that arise in specific instances of this relationship: film, theatre, music, fine art, poetry and literature. Despite representing a wide range of philosophical orientations, disciplines and art forms, all speakers articulate some affinity between law and art while also strongly conveying the unease that characterise their engagement.

All speakers at this conference are contributors to Law and Art: Ethics, Aesthetics and Justice to be published by Routledge-Cavendish, Glasshouse Books, summer 2010.

Tate Modern Starr Auditorium
£15 (£12 concessions), booking recommended
For tickets, call 020 7887 8888.

I’ve copied the detailed outline after the jump.

Law And Art – the tension.

This symposium will unearth a fascinating debate about the complementarity between art and law and their otherness from many perspectives. The relationship between art and law is troubling to say the least. In philosophical and historical terms, therefore all speakers rethink this uneasy yet pervasive and necessary relationship.

Law was classically defined as ars iuris, an art of law, which used the panoply of humanist disciplines, from philology to fine art, in the exercise of the legal role and the scholarly understanding of its texts. However, that tradition has fallen by the wayside over time, and particularly in the wake of modernism and the increased specialisation of legal expertise. Law and art now exist in a tense and uneasy relationship with each other.

One of the problematic contemporary aspects of this relationship is how its troubled nature becomes less and less visible in a legalised, representational and calculative world. That this world becomes more and more violent in the wake of more and more critical legalisation may hint at a deeper unfolding which is silenced by always-already legal responses to that violence. The contemporary legalised world and its legalising critical actors may be conceived itself to be a work of art that remains a sign which is not read.

During the symposium, speakers will offer short talks followed by a panel discussion and questions from the audience. We will publish short summaries of contributions here.

10:00

Welcome: Marko Daniel

10:05

Oren Ben-Dor: Introductory Remarks

10:15

Panel 1: Law Between Ethics and Aesthetics
Chaired by Panu Minkinnen

Krzysztof Ziarek: Poetic Justice: Art and the Measure of Morality
Much of the reflection on law and justice takes its cue from the notion of the subject as possessing rights and the capacity, given the proper freedom, to exercise them. Even the radical critiques of the notion of subjectivity have failed to introduce a significant change into the debates about justice. Perhaps the one notable difference is the emphasis on the idea of alterity and the notion that justice should be centred not on the subject but rather on the ‘radically other,’ and thus promote justice and rights of the other. In this essay, I take as the point of departure Heidegger’s thought of the fourfold, and in particular, its displacement of the human from the position of centrality to the role of a participant in a nexus of relations constitutive of the world. The primary determination of the human in this context is neither the notion of the subject nor that of the other’s alterity, but instead that of mortality and the perspective its opens onto being. Mortality becomes the measure of the place and relations of the mortals, always thought by Heidegger as a plural, within the world. Yet mortality reveals itself most strikingly in what Heidegger describes as ‘poetic dwelling’ in his essays such as ‘…Poetically Man Dwells…,’ ‘The Thing,’ or ‘On the Way to Language.’ For Heidegger, this poetic measure of the mortals’ dwelling discloses itself precisely in art, specifically in the poetic event of the world opened up in the artwork. In this context, justice would need to be approached from the perspective of the role of the mortals in the world, as justice of and for the world, and not simply for human beings. Justice, therefore, has everything to do with art’s poetic event of disclosure, that is, with the way in which the artwork, as Heidegger points out in The Origin of the Work of Art, suspends the usual ways of acting, perceiving, knowing, and valuing. Allowing us to experience the temporality of this suspension and displacement, the artwork opens up being as the historical-temporal event of finitude: the poetic measure of mortal dwelling. Justice then is always already ‘poetic’ justice, always ‘in question’ as a certain mode of being, free of power and dominance. Justice for beings, non-human and human, comes as part and parcel of the power-free, poetic way of world’s being.

Igor Stramignoni: Seizing Truths: Art, Politics, and Law
The work of French philosopher Alain Badiou has been described as ‘the most powerful alternative yet conceived in France to the various forms of postmodernism that arose after the collapse of the Marxist project’ (Hallward). Art interests Badiou in and of itself but, also, as both that which during the twentieth century took over philosophy and as that which philosophy, now increasingly de-sutured from art, must nevertheless imitate in order to make clear that, quite simply, there are truths, after all. Law, on the other hand, is for Badiou the ‘cipher of a finitude’ (le chiffre d’une finitude), part and parcel of a specific political machine that must continuously perform certain problematic exclusions if it is to keep the fiction of parliamentary democracy together. So how is the relationship between art and law, between the poet and the city, in Badiou’s oeuvre?

Ariella Atzmon: Judaism in the ‘No man’s Land’ between Law and Ethics
The Judaic prohibition of ‘the image’, recognized as the ‘triumph of intellectuality over sensuality’, results in a deficiency of ‘art’ and ‘science’, and implies a convoluted attitude towards ethics, morality and ‘The Law’. Heidegger’s approach, that hermeneutics is a ‘search into ontological and epochal thinking’ is alien to the Jewish tradition, which concentrates on immutable, preserved, textual knowledge. Hence, Judaism’s claim as representing the zenith of hermeneutics fails. Since hermeneutical awareness impacts on rhetorical and political styles, I argue that because, in Judaism, the people’s relationship to God is conceived both in legalistic terms and requiring strictly God-fearing obedience, this vitiates recourse to a vigilant ethical judgment.

Costas Douzinas: The blindness of law and the Insight of Justice
This talk reflects on the relationship between law, justice and regimes of visibility.

Adam Gearey: ‘I wish you well’: Aesthetics and Welfare
This paper uses Jean Luc Nancy’s understanding of being-with as a way of thinking about the possibilities of a philosophy of welfare. The paper is committed to poetry rather than either social theory or social science as an authentic philosophical resource. The paper begins with a consideration of Walt Whitman’s ‘To a Stranger’ and ‘Once I Passed through a Populous City’. These poems are approaches to ‘being with’- the circulation of meaning amongst bodies – the rooting of experience in reason, rhythms and sensuous responses to the world. Where does this take us? Being with might not lead to any direct political recuperation or institutional theory. However, it can point towards a notion of welfare as the open set of my encounters with others, with whom I am concerned and wish well. It also points towards one way in which we might think about institutionalised forms of welfare.

Panel discussion

12:00

Panel 2: Law, Art and Violence
Chaired by Ewa Ziarek

Oren Ben-Dor: The Sublime Origin of Violence and the Tragedy of Law
From now on, we will call ‘most thought-provoking’ what remains to be thought about always, because it is at the beginning, before all else. What is most thought provoking? How does it show itself in our thought-provoking time? Most thought provoking is that we are still not thinking – not even yet, although the state of the world is becoming constantly more thought-provoking. (Martin Heidegger, What is Called Thinking)

I argue that the essential relationship between law and art can not be assimilated into ‘critical’ usefulness but rather forms a relationship of call and response that manifests as primordial strangeness. Art persists for the sake of guarding ineliminable strangeness that characterises the guardianship of be-ing. Reflections will traverse the notions of ‘hermeneutics’, ‘beginning’, ‘decision’ and lastly, the relationship between ‘being’ and ‘becoming’.
Resorting to critical thinking in law through engagement with ethics and aesthetics is inevitable, but at the same time does not yet respond to the call of be-ing, thus anticipating violence. Tragedy occurs as violence of be-ing when critical thinking silences the transcendence of strangeness which is itself characterised as a near/far movement – when, following Heidegger’s quote, what is most thought-provoking provokes only as impossibility to provoke.
We can hear an echo of this violence and tragedy in the very condition of political possibility encapsulated in art. It is this tragedy which is political in art rather than any opening of possibilities that anticipate useful audibility in ethics, politics and the law. Strangeness to anything legal, I would argue, embodies the ‘prophetic’ in art. The strangeness of the prophetic embodies a de-cision that originates in the mystery of be-ing, and which embodies the be-coming of be-ing. Law, in its essence as art always estranges legal being and becoming.

Richard Wilson: As the Osprey to the Fish: Shakespeare and the Force of Law
I think he’ll be to Rome.
As is the osprey to the fish, who takes it
By sovereignty of nature. [Coriolanus, 4,7,33-5]

Shakespeare’s plots turn on the tension between justice and positive law which has become a focus for postmodern philosophy thanks to Derrida’s readings of the Weimar thinkers Carl Schmitt and Walter Benjamin. In play after play the dramatist poses the same question as these theorists of ‘the state of emergency’: ‘How to distinguish between the force of law of a legitimate power and the allegedly originary violence that must have established this authority and that could not have authorized itself by any anterior legitimacy?’ [Derrida, ‘The Force of Law’]. This essay will therefore examine Shakespeare’s representation of the successor or post-war regime in a range of plays from A Midsummer Night’s Dream to Hamlet and The Tempest, and consider how this relates to debates in contemporary jurisprudence about the conflict between prerogative and ‘the voice of the recorded law’ [Measure for Measure], ‘the Norman Yoke’ and the rights of ‘Free Born Englishmen’.

Bernadette Buckley: Emergency Art: The Revolution will not be Curated!
This talk builds on my existing work on the relationship between art and terrorism—in particular on those artists who styles themselves as a artist-guerillas whose role it is, they believe, to subvert and challenge an essentially misguided ‘authority’. The aim of this talk is to explore and to critique what I am calling the ‘Emergency Art’ tradition.
‘Emergency Art’ falls into two categories. Firstly it refers to artworks, the creation of which necessarily constitutes some kind of legal or criminal offence e.g. Situationist ‘detournements’, works by Alexander Brener, Josh Mac Phee, Mark McGowan, Yuan Cai and Jian Jun Xi, irational.org, graffiti artists from Banksy to Chairman Mao, CrimethInc, Baader-Meinhof etc. etc. Secondly, it refers to those situations in which artists’ work has resulted in state or police ‘actions’ in order to ‘protect’ the public – e.g. Critical Art Ensemble, Manga, Tierney Gearon, Nan Goldin, Robert Mapplethorpe, Edward Kienholz, Allen Ginsberg, ‘Degenerate Art’.
Overall, the talk will raise questions around the notion of ‘artistic merit’ when raised as a legal defence and will explore the related question as to whether or not the public needs to be protected from art and artists. Consequently, it will also raise issues arising from the ‘democratisation of art’, the notion of ‘unauthorised’ art and/or ‘art against authority’.

Panel discussion

13:15

Lunch

14:15

Panel 2: Creativity, Singularity and the Law
Chaired by Adam Gearey

Jaime Stapleton: Copyright Activism as Art: Aesthetics, Ideology and Ethics
This paper treads the well-worn path between art and law, that of copyright. But, rather than exploring the usual conflicts between art and copyright law, the paper examines the development of anti-copyright activism as an art form. In particular, the paper focuses on the political and economic paradigms that underpin the current wave of copyright activism. The paper concludes with a discussion of the role of art in coalitions for copyright reform, and the ethical challenges this entails.

Zenon Bankowski: Beyond the Text of Law
When people view art objects in galleries, too often they rely on textual explanation, looking for the text in the catalogue to explain it and not letting the object explain itself. Some curators try to get people to engage the art object without text, to use their imagination to let the object speak to them and not be subsumed by the text. Lawyers face an analogous situation when they encounter events that need decision; too often they look to the text and do not experience the particularity of the situation by letting it speak for itself.
For law is a text-based discipline. That is both its strength and its weakness. It is its strength in that it enables decisions to be transparent and constrained by the text; it is its weakness in that decisions tend to be dominated by text, and situations are shoehorned into the text with stultifying results. The answer is always sought within the text, viewing the situations law encounters through the optic of the text and thus manipulating them rather than transforming them, and not letting the situation speak to the text and the law.
I aim to examine how the visual and movement arts help in promoting the ethical imagination and creativity needed at the moment when law and lawyers encounter these situations.

Thomas Irvine: Musical Performance and the Law Givers, Then and Now
In the opening to the ninth chapter of his Violin School of 1756, Leopold Mozart writes that appoggiaturas, notes left unwritten yet customarily added to join together and embellish melodies, are products of nature herself (the emphasis in bold is original). They are, in other words, matters of natural law. This is a key passage in a signal work about musical performance in the eighteenth century. It illuminates a tension at the heart of this conference, between the singularity of the event and the ethical responses to it, for, then as now, the presence of musical performance challenges the law-givers of music. In this paper I will ask what natural laws mean to musical performance, and reflect on how a historical discourse like Leopold’s might still resonate in the world of our own musical practice and theory.

Robin Lister: Reading Law and Literature: a Case for Conversation
Law’s functionality is uncontested, art’s sake a matter of endless argument. If art claims to see the world anew, accepting mystery and doubt, law claims to deal out order and finality, setting the world to rights. This talk argues that law’s and literature’s conversation tells another story about law’s melancholic, troubled human soul. The talk focuses on a literary case of law v art and a number of chapters in common law’s story of negligence. These stories show how law’s negative incapability leads it on a ‘frolic of its own’, towards a solipsistic discourse aloof from its human subjects, the masters it should serve. This tendency, encouraged by a consumerist childish dependency on the part of litigants and audiences, may be one shared by law and art.

Panel Discussion

15:45

Tea

16:15

Panel 4: Law, Justice and the Image
Chaired by Richard Wilson

Panu Minkkinen: Crucifixion as Armature: Francis Bacon seen through French eyes.
Francis Bacon seldom discussed his art in theoretical terms, and most British art critics and historians have respected the artist’s apparent disdain of high theorising by constraining themselves to descriptive analyses. But quite unlike their Anglophone counterparts, the French have regarded Bacon’s paintings as archetypal representations of modern art worthy of the most abstract generalisations and speculations, a perspective that Bacon, through his personal friendships with French intellectuals like Michel Leiris, in a somewhat contradictory fashion seemed to endorse. What does Bacon look like seen through French eyes?

Desmond Manderson: Governor Arthur’s Proclamation: indigenous people and the deferral of the rule of law
This essay examines two iconic documents, one Australian and one North American, each of which lay claim to being both works of art and of law. As such, they demonstrate exactly the ways in which aesthetic representations can provide crucial insights into legal concepts and legal history. In this case, the images provide a complex and ambiguous reading of the nature and implications of the rule of law in colonial societies. Working with these images, and simultaneously with contemporary legislative measures in the treatment of indigenous peoples, especially in Australia, the essay develops a critique of the rule of law as it has been applied or, indeed, not applied to, aboriginal people. These pictorial laws shed a dramatically new light on fundamental issues in the rule of law; while contemporary issues in law and law-making shed new light on these works of art.

Andreas Philippopoulos-Mihalopoulos: Awnings of Justice: De Chirico and Repetition
In the final stage of his career, Giorgio de Chirico produced a long series of almost identical paintings that copied and only partly developed his successful early metaphysical period style. This was less of a performance and more of an income-generating exercise based on the high demand for his metaphysical paintings, especially the ones of the Piazza d’Italia. Whether this rather technical repetition can also be considered ‘art’ is certainly worth considering, despite a rather facile rejection by the relevant literature. Its relevance, however, for this volume is revealed if one compares the technique that is undoubtedly present even in this blind, made-to-order repetition and the technicality of legal ‘norm-applying’. Beginning with this parallelism, the text considers the edifice of the law as the repeating quotidian practice of judicial decisions. This is described as a way of evading the transcendental elements of judging and instead a way of returning to the safety of the normative repetition. In such an edifice, awnings of justice can be observed, artfully posited against the horizon of waiting, as windows capturing moments of transcendence. This connection between the edifice and the horizon is described here as the awnings of justice. The argument is substantiated through a discussion on Luhmann’s theory of art and of justice from a poststructural critical position, employing the thought of Derrida, Kierkegaard and Cacciari.

Alain Pottage and Tatiana Flessas: The new museum: aesthetic form, cultural politics and legal means
Museums articulate a set of tensions between art and law. The legislative warrant, architectural form, curatorial politics and public self-representation of the museum purport to resolve a set of tensions between art or culture and diverse regimes of legality: the legality implicit in anthropological, taxonomic and art-historical knowledge and the national and international politics of cultural identity and educative democracy. The tensions between art and legality remained latent in the era of nineteenth-century imperialism, when the universalizing pretensions of reflections on art, science and culture went unchallenged, secured by the reach of imperial power. In the post-colonial era these tensions have become singularly acute, and the question of ownership has emerged as a leading theme in debates about the role of the museum as an articulation of art and legality. What is in question is the authorial and authoritative status of the museum. Taking the new Acropolis Museum as an example, we explore some aspects of these debates.

Panel discussion

17:45

End

Speakers

Ariella Atzmon. Israeli born. Senior lecturer in the School of Education and the School of Law at the Hebrew University of Jerusalem. (Retired in 2002.) Graduate in Chemistry, postgraduate in Philosophy of Science and Political Science. Fields of research: rhetorical styles shaped by false images of science that prevail in liberal democracies and its interference with public opinion in the context of decision making. Particular topics of interest: hermeneutics, jurisprudence referring to the intricate nature of Jewish thought. Author of Multiple Amnesia: a poststructuralist gaze.

Zenon Bankowski is of Polish Descent. He was born in 1946 in Germany. Bought up in England, he studied in Scotland at the Universities in Dundee and Glasgow. He is currently Professor of Legal Theory at the Law School of Edinburgh University. His book Living Lawfully looks at the relations between Law and Love and the ethical life of Legal Institutions. He is currently looking at the place of the visual and movement arts in relation to Law and Legal Education. He has taken part in dance workshops, was a competitive athlete (a past winner of the Edinburgh 7 Hills race), and is a volunteer neighbourhood mediator.

Oren Ben-Dor is a Reader in the Philosophy of Law, School of Law, University of Southampton. He is the author of Constitutional Limits and the Public Sphere, Oxford: Hart Publishing, 2000, and Thinking About Law: In Silence with Heidegger, Oxford: Hart Publishing, 2007. He is the editor of Law and Art: Justice, Ethics and Aesthetics, to be published by Routledge-Cavendish, Glasshouse in 2010.

Bernadette Buckley lectures in the Politics Department, Goldsmith College, London. Formerly a lecturer in Contemporary Art Theory & Practice at the International Centre for Culture & Heritage Studies, Newcastle University and Head of Education & Research at the John Hansard Gallery, University of Southampton. Bernadette is a Board Member of Tate Papers and the Journal for Museum Education as well as a member of Polarts, the ECPR Standing Groups for Politics and the Arts. Bernadette’s interest is in the relationship between art and war and/or art and terrorism. Her Interest in ‘Gallery Studies’ explores the relationship between ‘curating’ and ‘creating’ and investigates the ontology of curating from the perspective of the ‘event’. Bernadette is interested in the (de)differentiation between ‘contemporary art’, ‘heritage’, ‘education’ and other areas of practice. She has explored notions of (un)’education’ both in ‘artistic’ and in ‘gallery’ practices. Her recent publications include: ‘Mohammed is Absent, I am Performing’ in Iraq and the Destruction of Heritage, P. Stone, & J. Farchakh eds, HMP: London, 2008, and ‘Terrible Beauties’, in Art in the Age of Terrorism, G. Coulter-Smith, M. Owen and Paul Hoberton eds., New York, 2005.

Costas Douzinas LLB (Athens) LLM PhD (LSE) is Professor of Law and Director of the Birkbeck Institute for the Humanities, Birkbeck College, University of London. He is the managing editor of Law and Critique: The International Journal of Critical Legal Thought, and managing director of the publishing house Birkbeck Law Press.

Tatiana Flessas teaches cultural property and heritage law at the London School of Economics. She is working on a major research project on the changing role of the museum.

Adam Gearey is a Reader in law in the School of Law at Birkbeck College. He is presently working on a book tentatively entitled Justice as Welfare to be published by Continuum next year.

Thomas Irvine is Lecturer in Music and Deputy Director of the Centre for Eighteenth Century Studies at the University of Southampton. He has published articles and essays on W.A. Mozart, Leopold Mozart, and theories of performance in the eighteenth century. Before becoming an academic music historian, he was a busy professional performer on both the modern and historical viola.

Robin Lister
After a previous incarnation as an editor and writer Robin Lister has lectured about law since 1992 and has been teaching a law and literature course for the past decade. He is currently a Senior Lecturer at the University of Bradford. His most recent publication is about the shifting relationship between property and identity in the eighteenth- and nineteenth-century English novel.

Professor Desmond Manderson holds the Canada Research Chair in Law and Discourse, Faculty of Law, McGill University. Prior to coming to McGill, he was foundation Director of the Julius Stone Institute of Jurisprudence at the Faculty of Law at the University of Sydney. He is a managing editor of Law/Text/Culture, an international interdisciplinary journal that is committed to the developing of connections between aesthetics, law, and philosophy. Desmond’s books include Songs Without Music: Aesthetic Dimensions of Law and Justice, University of California Press, 2000; Proximity, Levinas, and the Soul of Law, McGill-Queen’s University Press, 2006 and Essays on Levinas and Law: A Mosaic, Macmillan, 2009.

Panu Minkkinen
Professor of Law at the University of Leicester and Adjunct Professor of Legal Theory at the University of Helsinki, Finland. He is former Deputy-Director of the Helsinki Collegium for Advanced Studies (2001-2004) and Director of the Finnish Institute in London (1999-2001). His publications include Thinking Without Desire: A First Philosophy of Law (Hart Publishing, Oxford, 1999) and Sovereignty, Knowledge, Law (Routledge- Cavendish, Glasshouse Books, 2009)

Alain Pottage teaches law and social theory at the LSE; his current research focuses on theories of ownership and the history of intellectual property.

Andreas Philippopoulos-Mihalopoulos, LLB, LLM, PhD, is a Reader in Law, University of Westminster and Director of The Westminster International Law & Theory Centre. His research includes critical theory, phenomenology, autopoiesis, law and literature, gender studies, law and geography. His edited volume Law and the City (2007) and his monographs Absent Environments (2007) and Niklas Luhmann: Law, Justice, Society (2009) are published by Routledge.

Dr Jaime Stapleton is an Associate Research Fellow of the School of Law, Birkbeck, University of London. He speaks regularly in the UK and Europe on issues relating to creative practice, law and political economy. He has worked as a consultant on economic, social and cultural impact assessment of copyright for the World Intellectual Property Organization, and on intellectual property reform as the Research Coordinator of the Adelphi Charter on Creativity, Innovation and Intellectual Property for the Royal Society of Arts, London. He has a long standing interest in intellectual property history and served on the Editorial Board of Art and Humanities Research Council ‘Primary Sources in Copyright (1450-1900)’ project, based at Cambridge University. He is currently a core research participant in the AHRC network ‘Intermedia: New Media Art, Performativity and Authenticity’ based at Tate Modern, which examines issues relating to the acquisition and display of new media works in art museums.

Igor Stramignoni teaches in the Law Department of the London School of Economics and Political Science. His work on the history, ethics, and poetics of comparison combines insights from contemporary philosophy, anthropology, literature, and psychoanalysis, to examine key aspects of Western legal and political knowledge of the world.

Richard Wilson
Professor of Literature, School of English, Communication and Philosophy, Cardiff University. Richard was the 2006 International Globe Fellow. His books include, Secret Shakespeare: Studies in Theatre, religion and resistance, (Manchester UP, 2004); Shakespeare in French Theory: King of Shadows (London: Routledge, 2006), and Will Power: Essays on Shakespearean authority (London: Harvester 1993). He has edited collections of essays on Julius Caesar and Christopher Marlowe, and co-edited volumes on New Historicism and Renaissance Drama, Theatre and Religion and Region, Religion and Patronage. He is currently completing Free Will: Essays on Shakespearean autonomy. Richard’s recent edited volume is Shakespeare’s Book: Essays in Reading, Writing and Reception (with Richard Meek and Jane Rickard, Manchester UP, 2008)

Ewa Plonowska Ziarek is Julian Park Professor of Comparative Literature and the Founding Director of Humanities Institute at the State University of New York at Buffalo. She is the author of The Rhetoric of Failure: Deconstruction of Skepticism, Reinvention of Modernism (SUNY, 1995), An Ethics of Dissensus:Feminism, Postmodernity, and the Politics of Radical Democracy. (Stanford 2001); editor of Gombrowicz’s Grimaces: Modernism, Gender, Nationality (SUNY, 1998); and co-editor of Revolt, Affect, Collectivity: The Unstable Boundaries of Kristeva’s Polis (SUNY 2005) and Time for the Humanities: Praxis and the Limits of Autonomy (Fordam UP 2008). She has published numerous articles on Kristeva, Irigaray, Derrida, Agamaben, Foucault, Levinas, Fanon, feminist theory and literary modernism. Currently she is working on a book on feminist aesthetics.

Krzysztof Ziarek is Professor of Comparative Literature at the State University of New York at Buffalo. He is the author of Inflected Language: Toward a Hermeneutics of Nearness (State University of New York Press, 1994), The Historicity of Experience: Modernity, the Avant-Garde, and the Event (Northwestern University Press), and The Force of Art (Stanford University Press, 2004). He has also published numerous essays on Coolidge, Stein, Stevens, Heidegger, Benjamin, Irigaray, and Levinas, and co-edited two collection of essays, Future Crossings: Literature Between Philosophy and Cultural Studies (Northwestern University Press) and Adorno and Heidegger: Philosophical Questions (Stanford University Press, 2007). He is the author of two books of poetry in Polish, Zaimejlowane z Polski and Sad dostateczny.

Questions or Comments? Email me at derek.fincham@gmail.com