Schiele's 'Wally' handed over to Leopold Foundation—in a Queens warehouse

But will the Austrian institution auction off another Nazi-looted work to pay for “Wally” settlement?

US Customs unpack Schiele's "Wally"

New york. The lady who vanished reappears – in Queens. “Portrait of Wally,” Egon Schiele’s 1912 painting of his mistress, Walerie Neuzil, was taken out of a crate where it had been since 1998, and handed over Tuesday by an agent of US Immigration and Customs Enforcement to Elisabeth Leopold, widow of the Austrian collector Rudolf Leopold, who died on 29 June.

The transfer took place at an unmarked warehouse in Queens, New York, as part of a settlement in which the Leopold Foundation in Vienna agreed to pay $19m to the heirs of Lea Bondi Jaray, a Jewish art dealer who fled Vienna after the picture was taken from her apartment by Friedrich Welz,  a fellow dealer and Nazi party member.

A homecoming Sonderschau (special exhibition) is scheduled to open at the Leopold Museum in Vienna on 23 August, but not before the picture goes on view for two and a half weeks in Manhattan at the Museum of Jewish Heritage. A ceremony to launch that brief exhibition will take place Thursday 29 July. The museum’s chairman is Robert Morgenthau, the former Manhattan District Attorney, who placed the painting (on loan to the Museum of Modern Art in January 1998) under subpoena in an investigation as to whether stolen art had been brought into New York State.

When the Court of Appeal of the State of New York overruled Morgenthau’s subpoena, the US Department of Justice seized the painting to begin a forfeiture action in US District Court, which ended with the recent settlement.   

Asked when she arrived to receive the painting at the warehouse whether the $19m price was excessive, Mrs. Leopold, a medical doctor like her husband, said, “This isn’t about price, it is about art,” and stressed that her husband’s goal was to reunite the “Portrait of Wally” and the Schiele self-portrait (“Self-Portrait with Chinese Lantern Plant,” 1912) with which the artist paired it. She called the diptych an Erinnerungsstuck (memento, souvenir), as had relatives of Lea Bondi, who owned it before 1939. The Schiele self-portrait is emblazoned as a logo on banners advertising the Leopold Museum all over Vienna.   

Mrs. Leopold received the painting from Bonnie Goldblatt, an undercover agent for the US Immigration and Customs Enforcement (ICE), who confirmed in an interview that the settlement was reached before Dr Leopold’s death. Goldblatt, who served forfeiture papers on the Museum of Modern Art in 1999, was scheduled to testify at the trial. Reports from Vienna say that Leopold himself had chosen a group of “erotic pictures” from the foundation’s collection that could be sold (presumably for high prices) to offset the settlement’s cost.

Sources close to the Leopold Foundation say the $19m was paid to lawyers for the Bondi heirs with funds from a bank loan taken out by the Leopold Foundation, which faces pressure from the recent findings of an independent commission to restitute four more paintings that are in the museum’s collection, one by Schiele and three by Anton Romako.

The Schiele painting, "Haueser am Meer" (Houses by the Sea), belonged to Jenny Steiner, whose assets were confiscated by the Nazis in the late 1930s. Rudolf Leopold bought the painting in 1955. 

In a bid to compensate the Steiner heirs and pay down the debt from the Wally settlement, Diethard Leopold, the son of Rudolf Leopold who was recently named to the museum’s board, proposed a public auction of the painting, with the proceeds divided between the Leopold Museum and the heirs.

"Houses by the Sea" is valued at some $24m. The Schiele auction record is $22.4m, set at Christie’s in 2006. (The New York dealer Jane Kallir of Galerie St. Etienne, author of the Schiele catalogue raisonné, said she had lined up buyers willing to pay $20m for “Wally” if a New York trial verdict had returned the picture to the Bondi heirs.)    

Once the auction was proposed, the Israelitische Kultusgemeinde Wien (Jewish Community of Vienna) condemned the idea as “tasteless.” The IKG’s executive director, Erika Jakubovits, said, “he wants to take the sale of one painting stolen by the Nazis to buy back another painting stolen by the Nazis.”  

Hannah Lessing, Secretary General of the National Fund and the General Settlement Fund for Victims of National Socialism, rejected the notion of an auction: “If this work of art has been identified as a stolen painting that has to be given back, then give it back. Full stop.”

“There are worse solutions,” said E. Randol Schoenberg, the Los Angeles lawyer for the Bloch-Bauer family in its successful action to recover paintings by Gustav Klimt in the Belvedere Museum in Vienna. “The worse solution is that they keep it, and fight,” he noted, citing the “Wally” dispute that lasted almost 13 years.

The auction proposal seems to be part of a reconciliation strategy by Leopold fils, who also has a strategy to lead the museum’s exhibition programme. According to Der Standard, Diethard Leopold is proposing an exhibition commemorating great pre-1938 Jewish art collections in Vienna, to be curated by Sophie Lillie, the provenance researcher and author of the survey of Jewish property in Vienna before World War II, "Was Einmal War" (What Once Was). 

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