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Restitution

The Nazi bounty hunters: War loot claims become big business

World War II restitution is now a multi-million dollar enterprise in which lawyers, auction houses and possibly even venture capitalists all have a stake

Just three days before Christie’s was expecting to sell Picasso’s Portrait of Angel Fernández de Soto for up to $60m at its auction of impressionist and modern art in New York last month, it was forced to withdraw the painting from auction. An heir to the original owner of the Blue Period work had mounted an eleventh-hour court “ambush”, claiming it had been sold because of Nazi persecution. And while a judge threw out the suit, the plaintiffs are continuing their action in another court (p52).

The increasing number of Nazi loot claims and the shifting legal ground on which they are based is worrying museums as well as art market professionals. At stake are works of art worth hundreds of millions of dollars; many have been hanging in major museums for decades, others belong to owners who bought them in good faith on the open market. Behind many of these claims is a new breed of Nazi “bounty hunters”, lawyers who see potential rich pickings in finding works of art that can then be claimed as war loot.

“It’s become big business,” says the Washington-based lawyer and historian Willi Korte who has been researching restitution cases for over 20 years.

Mr Korte says he has been approached by venture capitalists prepared to “invest $1m or more in the hopes of recovering and reselling art worth many times that amount. They asked me: ‘Can you name us five to ten multi-million paintings that are claimable, and we’ll provide you with funds’,” says Mr Korte.

We understand that at least one family is currently seeking “sponsors” to support a claim against a well-known US museum.

Dr Jost von Trott is a Berlin-based lawyer who specialises in the recovery of Nazi loot. He is one of several lawyers and firms who are increasingly reversing the traditional restitution process. As well as representing the heirs of Nazi victims after they approach him with a claim, Dr Von Trott also researches the provenance of paintings he suspects were looted and then finds people who might be entitled to claim them. He says he cooperates with art historians to identify works that might have been seized by the Nazis.

Speaking to The Art Newspaper, he says: “It might be that while doing research in these matters, one of the historians [I work with] comes across a further name of another Jewish family who lost property during the Nazi period. If the researchers find another name in the archives, then they or we could contact them as well and see if we can help in recovering lost objects,” he says.

Other law firms employ genealogists to search for potential claimants for works of art. Most of these firms, which are predominantly based in the US and Germany, charge between 40% and 50% for their services on a “no win no fee” basis. Once a work has been recovered, it is likely to be sold at auction so the claimants can meet their legal costs.

This shift in the way an increasing number of restitution claims are emerging is worrying museums. The German Museums Association president Michael Eissenhauer says: “It is worth it to go out and look for prey, to see which works can bring new blood to the art market.”

Last month Germany’s Culture Minister Bernd Neumann invited leading museum representatives and legal experts to a crisis meeting to discuss overhauling the country’s restitution laws, which they say are stripping its nation’s heritage. A working party will be set up to make recommendations.

Another factor which worries museums is the shift in the legal ground on which many claims are now based. Straightforward claims are brought for works that were seized by the Nazis from their Jewish owners or sold for a very low price under duress. However, claims are also being brought for works, sold by their owners in the mid 1930s. Opponents of such claims argue that the prices obtained were fair.

A case in point is the controversial restitution of Kirchner’s Berliner Strassenszene, 1913-14, to Anita Halpin, chairman of Britain’s Communist Party, from the Berlin Brücke Museum earlier this year. Critics of this restitution say the work should not have been returned because its owner, Alfred Hess, (Ms Halpin’s grandfather) had sold it at a fair price in the 1930s.

Ms Halpin consigned the work for sale at Christie’s, where it made $38m last month (p49). It has since emerged that Christie’ s put up €1m ($1.2m) to compensate the Brücke Museum which had acquired the work in 1980. Christie’s then deducted this sum from the sale price. Ms Halpin’s lawyers are reportedly pursuing other Hess collection paintings which she may be entitled to.

The auction houses are treading a very delicate line as the recovery of Nazi loot is providing a rich supply of fresh goods for sale.

They hail the “good” restitution cases (where they have carte blanche to sell) but decry the “bad” ones (where a restitution claim prevents them from doing so).

Collectors have also been suspected of encouraging potential claimants of works of art to seek their return, in the hope of then acquiring it themselves.

Some were surprised when the cosmetics tycoon and founder of New York’s Neue Galerie, Ronald Lauder, exhibited all five of the Klimts restituted to the 88-year-old Californian Maria Altmann last year in his private museum. He bought one, the Portrait of Adele Bloch-Bauer I, 1912, for a reported $135m, and the others were auctioned off at Christie’s (p49). Mr Lauder also bought the Kirchner returned to Ms Halpin at the same sale. Speaking to The Art Newspaper, Mr Lauder’s attorney Charles Goldstein said that Mr Lauder began making arrangements to show all five Klimts on the day the court case was resolved in Vienna and that negotiations for the purchase of the 1912 Klimt portrait came later.

“The idea that Mr Lauder is promoting restitution in order to gain from these claims is false. Since becoming chairman of the Commission for Art Recovery of the World Jewish Congress in 1999, he has never acquired any of the works associated with the recovery programme, which has retrieved work in excess of $15m representing more than 100 pieces.”

Mr Goldstein also said that Mr Lauder is a major supporter of restitution efforts but not for personal gain. He has spent millions of dollars of his own money towards this cause, says Mr Goldstein. Although he has acquired a handful of works through restitution over the years, he purchased these on the open market.

The issue is highly sensitive because of the ethical issues involved. Claimants of Holocaust art have the moral high ground. But after the eleventh-hour claim was made on the Blue-Period Picasso, Erika Jakubovits, executive director of the Presidency of the Jewish Community of Vienna, said: “Holding back a claim and bringing legal action at the last minute is a reckless action and causes harm to the restitution community in general.”

While Christie’s would not comment, there were rumours that the claimant in the Picasso case had attempted to obtain cash in return for not bringing the lawsuit. Asked if this was true, John Byrne, one of the lawyers for the claimant declined to comment.

The Picasso case is by no means the only one that many dismiss as opportunistic. Last year Sotheby’s was hit with a $1.8 billion class action brought by the “Association of Holocaust Victims for Restitution of Artwork and Masterpieces”, through New York lawyer Ed Fagan. The filing alleged that Sotheby’s had trafficked in works of art stolen from Jews during World War II.

The case was thrown out, as was a $40m case, brought by the same association against the Bank of Austria in 2004. In dismissing this case, the judge found that Mr Fagan had “acquired an interest in looted artwork for the purpose of bringing a lawsuit”. Attempts by The Art Newspaper to reach Mr Fagan were unsuccessful.

But restitution lawyers argue that the current situation has developed because not enough is being done to help the heirs of Nazi victims and that lawyers are filling this vacuum.

Speaking to The Art Newspaper, Randol Schoenberg, lawyer for Maria Altmann, said: “Information should be made available to the heirs of Nazi victims. Where are the agencies in Austria, Germany, France, or Holland doing this type of research? Most governments' attitude is ‘we can keep whatever isn’t claimed’.”

o For commentary by the historian and lawyer Willi Korte and the art restitution expert Mark Masurovsky, see p32

Appeared in The Art Newspaper Archive, 175 December 2006