Portrait of Wally Forfeiture Progressing

Martha Lufkin has news of some movement in the Portrait of Wally civil forfeiture proceeding currently underway in Federal District Court in Manhattan.

[Judgment] on a long-running lawsuit in New York which helped launch a world outcry over Nazi-looted art at museums and prompted many institutions to begin examining their collections for history of Nazi theft, has been postponed to let the US government review new evidence. On 3 June the schedule was suspended on a case brought by the US government in 1999 to seek confiscation of Egon Schiele’s Portrait of Wally from the Leopold Museum in Vienna, under the US National Stolen Property Act. The US says the Leopold knew that the art was stolen by a Nazi in 1939 from its Jewish owner, Lea Bondi. The case, which the parties had asked the court to resolve without a trial, is before the federal district court in Manhattan.

It’s true that the Portrait of Wally dispute has probably caused some museums to re-examine their collections, but its also been pointed to as a risk to art loans and traveling exhibitions. It also puts a lot of power in the hands of prosecutors when they can use a forfeiture proceeding like this, as the government essentially brings suit against the object itself, with the benefit of far lower burdens of proof. Historically, federal prosecutors have intervened on behalf of source nations or claimants when they have potential claims. It’s a very useful thing for claimants to get this kind of assistance in these cases. I’m very interested to know what new information may be coming to light.

My understanding of the facts in this case indicates its a difficult case for the prosecutors to prevail. Hopefully a resolution is pending, as the work has been in storage for nearly a decade now.

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

Should Cultural Property be used to satisfy judgments?


There has been increasing attention paid lately to the use of art and antiquities to satisfy unrelated judgments against nations. In 2005, Russia had a $1 billion shipment of 54 paintings from Moscow’s Pushkin Fine Arts Museum seized at the Swiss border to satisfy Russian debts owed to Noga.

Similarly, in 2003 a group of American plaintiffs won a $90 million judgment against the Islamic Republic of Iran for a suicide bombing which took place in Jerusalem in 1997. James Wawrzniak Jr., a recent Harvard Law graduate has posted an excellent working paper on bepress titled Rubin v. The Islamic Republic of Iran: A Struggle for control of Persian Antiquities in America. It is likely to be published next fall.

Hamas claimed responsibility for the bombing in question, and the Rubin plaintiffs brought civil actions against Hamas, and also to Iran for providing material support and finance for the bombing. Experts testified that Iran provided both economic assistance from between $20 and $50 million dollars, and also terrorist training. Now I’m sure many readers would be quick to point out the US has given similar aid to similar groups, perhaps even during this Sunni awakening in Iraq, in which the US is essentially paying Sunnis to stop attacking coalition forces. I imagine Iran would have had a vigorous potential defense, however a default judgment was entered, whereby Iran essentially ignored the suit. Iran has since changed their stance after the Rubin plaintiffs decided to execute the $90 million judgment by claiming Persian antiquities in museum collections across the country. I’ll defer to Wawrzniak’s analysis as to what has transpired, but this litigation seems destined to last a number of more years.

One one level I can sympathize with plaintiffs who attempt to satisfy their judgments in this way. However, such a strategy, if taken to its logical conclusion would have troubling consequences for the cross-border movement of works of art. This was an issue in the recent dispute over the Royal Academy display of “From Russia: French and Russian Master Paintings 1870-1925 From Moscow and St. Petersburg”. Russia nearly backed out of the deal, eager to avoid a replay of the Portriat of Wally litigation.

The display required an act of Parliament to grant special immunity to prevent the works from being claimed by descendants of the original owners from whom many of the works were summarily seized during the Bolshevik revolution.

The question is, are the cultural benefits Great Britain and Russia share by viewing these masterworks, many never seen in London before? I think there is, and this cross-border movement of art is an important ideal which should be preserved, the recent string of nazi spoliation, and terrorist and other claims are important, and those victims deserve their day in court. However it should not be at the expense of our collective cultural heritage.

(Photo: Wassily Kandinsky Composition VII, 1913 on loan to the Royal Academy)

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

Germany Creates a Restitution Commission

Germany has decided to create a kind of Nazi Spoliation Office. From the AP:

BERLIN (AP) — A new office within Germany’s Institute for Museum Research is opening in January to help identify and research art stolen by the Nazis, Germany’s culture minister said Wednesday.

The office, which comes under the State Museums of Berlin, will help museums, libraries and archives identify items that were taken from their rightful owners during the Nazi period, Culture Minister Bernd Neumann said.

“I expect from this an important push in Germany in the clarifying of restitution questions,” he said.

Neumann founded a working group to look into how to deal with restitution issues, after Berlin sparked controversy with a decision last year to return Ernst Ludwig Kirchner’s “Berlin Street Scene” to the heirs of a Jewish collector who said the Nazis forced the family to sell it in the 1930s.

Some art experts questioned whether the expressionist work was sold under duress and whether its return was legal.

With the new office, which has a $1.47 million annual budget, Neumann said he hoped the restitution process would be better coordinated and more transparent.

This appears to be a good idea, and perhaps will preclude the need for private legal disputes when, for example, these works are displayed abroad as is the case with Schiele’s Portrait of Wally. Will this commission help to return works to claimants? Offer settlements? Or, will it instead merely warn German institutions that certain objects are suspect and should not be loaned abroad?

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

"Portrait of Wally" and Nazi Spoliation Litigation

Over at Culturegrrl, Lee Rosenbaum has some interesting information on Egon Schiele’s Portrait of Wally which has been sitting in storage for about 8-9 years now pending litigation. Two other articles on this topic have appeared in the last week as well. Carol Kino has an article in the NY Times on this as well. Kelly Crow had an article ($) in last week’s Wall Street Journal as well.

Here’s what Rosenbaum had to say on “Portrait of Wally”:

“Wally” is still languishing in storage, but not at MoMA. Having been seized by the U.S. Customs Service, it is now in a warehouse run by the Department of Homeland Security. According to MoMA’s deputy general counsel, Stephen Clark, “No trial date [at U.S. District Court in Manhattan] has been set.”

The Times reported that New York art-restitution attorneys Lawrence Kaye and Howard Spiegler are “helping the heirs” of the Viennese dealer in their effort to recover the Schiele painting from the Leopold Museum, Vienna, which had lent it to the MoMA show. The heirs assert that it had been confiscated from Jaray by the Nazis and should be returned to the family.

Spiegler told CultureGrrl today that an effort early last year at mediation in the case had failed, but he was hopeful that the matter would be resolved in court by “the end of this year or the beginning of next.”

Well, let’s hope that is the case. Rosenbaum blames the law for this extended delay, and that’s right in a sense. This painting was seized under a civil forfeiture statute. The relevant federal prosecutor seized the work years ago, but the judicial machinery has been incredibly slow. I write about this at length in my article for the Cardozo Journal of Art and Entertainment law which should appear sometime next fall. Jennifer Anglim Kreder had an outstanding article on this dispute, and civil forfeiture a couple of years ago in the Vanderbilt Journal of Transnational Law. I think this is a topic which warrants some more discussion, so I’ll revisit it later this week when I have more time.

In the meantime, you can see what I’ve written on the “Portrait of Wally” dispute.


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

Egon Schiele Litigation

There was an interesting article by Jason Horowitz of the New York Observer this week discussing a lawsuit implicating an Egon Schiele drawing. The dispute involves a Schiele drawing which was owned by a Jewish singer and comedian, Fritz Grunbaum. The works were seized by the Nazis, though the work eventually ended up in the hands of the Nazis. The work at issue is,

a gouache-and-black-crayon drawing of a headless woman clutching her knee. It has meandered for decades through art galleries and private collections before ending up in the middle of a pitched legal battle in New York’s Southern District court, where two of Grünbaum’s heirs—Leon Fischer, a New York stamp dealer, and Milos Vavra, who lives in Prague—have bickered for two years with the drawing’s owner, David Bakalar.

Now, a key Swiss gallery owner is prepared to give a deposition for the first time about the drawing’s provenance, and the presiding judge has expressed his eagerness to resolve the case.

At the same time, the heirs’ New York lawyer, Ray Dowd, is weighing the potentially momentous step of going after the Viennese company Schenker & Co. A.G.

Schenker’s global network of shipping firms amounts to one of the world’s largest logistics companies, with more than 40,000 employees in dozens of countries and more than $10 billion in turnover a year. Mr. Dowd contends that the company, which serves as the Olympic Games’ official movers, stole the drawing and set in motion a litany of fictitious provenances that skip from Vienna to Brussels, from Bern to New York.

The whole factual background is quite detailed, and too intricate to delve into here. The attempt to implicate the wing of the American Schenker Corporation seems quite difficult, especially as it was not formed until 1947.

Though there have certainly been some very positive results in Nazi restitution cases, Picasso’s Femme en Blanc is one example, not all the litigation in this area has produced positive results. Consider the case of another Schiele work, Portrait of Wally (pictured above) which was seized in a civil forfeiture action by federal prosecutors. I’m currently looking at this case for an article I am preparing. Based upon my initial research, it appears as if the work is still locked in storage at the Museum of Modern art. If anyone has any information on the present disposition of the dispute, I would really like to talk about it.

Here is my present understanding of the case. Nearly nine years on, the Portrait of Wally litigation has still not managed to reach the substantive issues of the case, and the work remains in storage in the New York Museum of Modern Art in a tragic echo of the fictional Jarnydyce v. Jarndyce in Charles Dickens’ Bleak House.

At present, a new trial will likely ensue to determine if the painting was stolen under the relevant Austrian law. Some time before 1938, Egon Schiele’s Portrait of Wally was housed in the apartment of a Jewish gallery owner, Lea Bondi Jaray “Bondi”. In April 1938, Friedrich Welz acquired the gallery belonging to Bondi in a process called “aryanization”, in which Jews were forced to sell their property at extremely low prices. Welz was later interned by the US military on suspicion of war crimes, at which point it confiscated his possessions, including the Portrait of Wally. Then, as per its post-war military policy, the military returned the property to the government of Austria, not the individuals to whom the property may have belonged prior to its seizure.

The work then was then mistakenly included in a shipment to another dispossessed family. Bondi, who had since fled to London, then allegedly enlisted Dr. Rudolph Leopold to recover the work from the Belvedere Gallery, the purchaser of the work. Later, Leopold acquired Portrait of Wally for himself from the Belvedere, without Bondi’s knowledge. After later learning of Leopold’s possession of the work, Bondi hired an Austrian attorney, but she was unable to recover the work before her death in 1969. Leopold then sold the work to the Leopold, the museum in which he serves as the Director for life.

The dispute remained dormant until 1997, when the Leopold Museum-Privatstiftung (Leopold) presented the work to the New York Museum of Modern Art (MoMA) for a temporary exhibition. After the exhibition, the Manhattan District Attorney’s Office subpoenaed the painting. That subpoena was quashed initially by the New York Court of Appeals because it violated New York’s anti-seizure statute. That same day a Federal Magistrate Judge issued a seizure warrant for the work based on probable cause that Dr. Leopold, had violated the NSPA. The painting has been in storage since the beginning of the dispute in 1998, while the value of the “Portrait of Wally” has soared to between $5 and $10 million.

Many argue this dispute has had a chilling effect on international art loans. As art adviser Ashton Hawkins says,

I think that people who would have previously considered lending now simply don’t consider it…I know from my colleagues who arrange these exhibitions in New York and in other cities that lending to the United States and particularly to New York has been more of a problem than it used to be.

Glenn Lowry, the director of the MoMA had a similar view testifying before the House Committee on Banking and Financial Services in 2000, “[Portrait of Wally] had been exhibited around the world for decades and … had been reproduced frequently in books.”

The case stands as a cautionary tale of what can happen if we extend restitution litigation too far. The clear cases of theft and loss are easily handled. But when you talk about a series of owners, some with varying degrees of knowledge and bona fides, I think there is a very grave risk of injustice being done. After all, this kind of litigation has three victims: the original owner, the present good faith possessor, and the public who may not be able to have access to the work. If anyone has any information about where this Portrait of Wally litigation currently stands, I would be delighted to hear it.

(Correction: earlier today I incorrectly labelled the publication as the NY Sun, rather than the actual publication, The New York Observer. I’ve corrected my error.)

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