Art Litigation: Vienna's Leopold Museum Pays $19 Million For Stolen Schiele Portrait of Wally

Some good reporting on Portrait of Wally from Catherine Hickley of Bloomberg:

Vienna's Leopold Museum Pays $19 Million to Keep Schiele Portrait of Lover - Bloomberg

Piece on Portrait of Wally in the Washington Examiner.

My latest news on Austria buying the stolen Schiele Portrait of Wally here.

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Art Litigation: Leopold Museum Capitulates in Egon Schiele - Portrait of Wally Case - Pays Full Price and Admits Artwork Stolen

Egon Schiele's Portrait of Wally

Chief Judge Loretta Preska approved a settlement in the Portrait of Wally case.  Herrick Feinstein's press release reporting the settlement terms of the Portrait of Wally case here - Portrait of Wally Case Settles

This is good news for heirs of Holocaust victims and a measure of justice.  It also gives a flavor of just how tainted the Leopold Collection is.  Congratulations to all - the courtroom battle started in 1999 has finally ended.

A very nice touch is that Portrait of Wally will be displayed at the Museum of Jewish Heritage in Battery Park City.   This is a very nice vindication for Robert Morgenthau's 1999 seizure of Portrait of Wally at the MoMA.

Dead City III, stolen from Fritz Grunbaum, is still hanging in the Leopold Museum.  For more information on Dead City III, go here.   My posts on Egon Schiele here.

If you have an interest in the topic of Nazi art looting, go here.   There is an incredible amount of stolen art remaining in U.S. museums.  Learn about Nazi agent and art dealer Curt Valentin here.

A really huge scandal and breathtaking example of Holocaust denial in the American museum community, the sad story of Alfred Flechtheim here.

I have copied the text of the press release below:

The United States of America, the Estate of Lea Bondi Jaray and the Leopold Museum Settle the Long-Standing Case Involving “Portrait of Wally” by Egon Schiele


New York, NY (July 20, 2010) -- The Estate of Lea Bondi Jaray (the “Estate”) announced today that the United States Government, the Estate and the Leopold Museum Privat-Stiftung (the “Leopold Museum”) have agreed to settle the long-pending case of United States of America v. Portrait of Wally, which was about to go to trial before Chief Judge Loretta Preska in federal court in Manhattan on July 26, 2010.
The case involves Portrait of Wally, a painting by Egon Schiele (the “Painting”), stolen from a Jewish art dealer and collector by a Nazi agent in the late 1930’s in Vienna. The major terms of the settlement agreement, which has been approved by Judge Preska, are as follows:
(a) the Leopold Museum pays the Estate $19 Million;
(b) the Estate releases its claim to the Painting;
(c) the United States Government dismisses the civil forfeiture action it brought against the Leopold Museum and releases the Painting to the Leopold Museum;
(d) the Leopold Museum will permanently display signage next to the Painting at the Leopold Museum, and at all future displays of the Painting of any kind that the Leopold Museum authorizes or allows anywhere in the world, that sets forth the true provenance of the Painting, including Lea Bondi Jaray’s prior ownership of the Painting and its theft from her by a Nazi agent before she fled to London in 1939; and
(e) before it is transported to the Leopold Museum in Vienna, the Painting will be publicly exhibited at the Museum of Jewish Heritage -- A Living Memorial to the Holocaust, in New York, beginning with a ceremony commemorating the legacy of Lea Bondi Jaray and the successful resolution of the lawsuit.

The Painting was the personal property of Lea Bondi Jaray, a Jewish art dealer in Vienna, who fled in 1939 to London, where she died in 1969. The Painting became the subject of court proceedings in New York City, after it was loaned in late 1997 and early 1998 to the Museum of Modern Art in New York by the Leopold Museum as part of an exhibition of Schieles from the Leopold Museum’s collection. In 1998, Robert Morgenthau, Manhattan District Attorney, subpeonaed the Painting in connection with his investigation into whether the Painting was stolen property. After the State Court of Appeals ruled in 1999 that such “seizure” of an artwork loaned for exhibition was prohibited under New York State law, the United States Government immediately commenced a civil forfeiture action in New York, alleging that the Painting was stolen from Lea Bondi Jaray during the Nazi era by a Nazi named Friedrich Welz, and was imported into the United States in 1997 by the Leopold Museum in violation of U.S. law. The Customs Service seized the Painting in connection with that action. The Estate of Lea Bondi Jaray asserted a claim to the Painting in the action, and the U.S. agreed that upon forfeiture of the Painting, it would transfer to the Estate all right and title to the Painting.

Based on the evidence presented during the case, Judge Preska ruled last fall that the Painting was the personal property of Lea Bondi Jaray and that it was stolen from her in Vienna in the late 1930's by Friedrich Welz, who was a member and collaborator of the Nazi party. The Court found that the Painting had been seized from Welz by U.S. Forces in Austria after World War II and delivered in 1947 to the Austrian Federal Office for the Preservation of Historical Monuments (the “Bundesdenkmalamt”), along with paintings Welz had acquired from Dr. Heinrich Rieger, a Jewish art collector who had perished during the Holocaust. In 1950, the Bundesdenkmalamt delivered artworks to an agent for the Rieger heirs and included the Painting in the delivery. Later that year, the Rieger heirs sold their works to the Austrian National Gallery (the “Belvedere”), and the Painting was included in the delivery of the artworks to the Belvedere. In 1954, the Belvedere traded the Painting to Dr. Rudolf Leopold. In 1994, Dr. Leopold transferred the Painting to the Leopold Museum.

In a statement, representatives of the Estate expressed their appreciation at reaching this historic settlement, which reflects the true value of the Painting, and acknowledges Lea Bondi Jaray’s ownership of the Painting and her and her family’s long quest for justice. In addition, they underscored that the public display of the Painting at the Museum of Jewish Heritage in New York will mean that visitors will be able to view the Painting in a setting that memorializes the sufferings of so many in the Holocaust and the resilience and resolve of those who escaped and/or survived. They added that the permanent signage reflecting the Painting’s true provenance will ensure that future generations are told the real story of the Painting’s theft from Lea Bondi Jaray during the Nazi era.

In conclusion, the Estate representatives said: “Justice has been served. Finally, after more than 70 years, the wrongs suffered by Lea Bondi Jaray are at last being acknowledged and, to some degree, corrected. We are grateful to the many people who helped Lea and her family during these many years. We especially thank our attorneys at Herrick, Feinstein, and all the members of the Asset Forfeiture Unit team of the U.S. Attorney’s Office, led by Assistant U.S. Attorney Sharon Cohen Levin, for their unstinting dedication to the pursuit of justice during the long course of this litigation.”


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Art Litigation: Egon Schiele's Prison Converted To A Museum, Image At Center of Stolen Art Controversy

Egon Schiele's "I Love Antitheses" 1912 (Estee Lauder Trust)

Artkabinett has an article Schiele Prison Attracts Collectors on the prison that housed Egon Schiele in Austria when he was imprisoned for scandalizing public morals.   Today the prison is a museum dedicated to Schiele's works.  Above is an image of one of the works that Schiele created while in prison.  According to Schiele expert Jane Kallir, "I Love Antitheses" was part of the collection of Fritz Grunbaum, a Jewish cabaret performer who was murdered in the Dachau Concentration Camp.  Jane Kallir testified at trial that "I Love Antitheses" was one of the few works that Schiele himself titled, and that the work is documented as belonging to Fritz Grunbaum by a 1925 Wurthle Catalog and a 1928 Hagenbund - Neue Galerie catalog.  Today it is held in an Estee Lauder trust.

Neue Galerie was the name of Otto Kallir's art gallery in Vienna that organized a 1928 exhibition to commemorate the tenth anniversary of Schiele's death.  Otto Kallir borrowed 22 works from Fritz Grunbaum's collection to include in the 1928 exhibition.  The 1928 correspondence shows that Otto Kallir had full access to Fritz Grunbaum's Schiele collection and selected the works that he wanted to borrow.

Grunbaum's collection was stolen by the Nazis and surfaced in Switzerland in 1956 where some of it was sold off by Eberhard Kornfeld of Galerie Kornfeld to Otto Kallir.  Kallir bought 20 of Fritz Grunbaum's Schieles from Kornfeld, including Dead City III. 

Kornfeld shipped the Grunbaum Schieles to New York and sold them through the Galerie St. Etienne, the gallery today owned by Jane Kallir and named after St. Stephen's Cathedral (Stephansdom)  in Vienna.  Otto Kallir knew that the works had belonged to Fritz Grunbaum and was aware that Fritz and his wife had been murdered by the Nazis.   In the period Kallir was selling the stolen artworks from his gallery on 57th Street in New York, the U.S. State Department had issued warnings to art dealers, museums and collectors not to acquire artworks from Europe that did not have a clear provenance.   Schiele was unknown outside Austria prior to World War II and many of Schiele's top collectors were murdered Jews such as Heinrich Reiger,  Oskar Reichel,  Karl Maylander and Fritz Grunbaum.

Galerie St. Etienne's Inspiration  -  Stefansdom - Vienna - Image from Wikipedia

Dead City III was seized as stolen property by D.A. Robert Morgenthau in 1998. After Morgenthau's subpoena was quashed, MoMA gave Dead City III to Rudolph Leopold.

A lawsuit alleging that Fritz Grunbaum's art dealer, Otto Kallir (and for a time monarchist supporting the restoration of the Hapsburgs) laundered the Grunbaum collection through Switzerland is still pending. See New York Observer, Dealer with the Devil.   The heirs of Fritz Grunbaum have been battling to regain the artworks stolen from him.  More information at Art Stolen From Fritz Grunbaum.   Museums and private collectors who purchased the stolen works have not returned them and the issue on appeal now to the Court of Appeals for the Second Circuit is whether the 147 days that the stolen artworks passed through Switzerland was sufficient to apply Swiss law to "launder" the title to these stolen works.  Massachusetts collector David Bakalar sued Fritz Grunbaum's heirs to obtain a declaration of title to one of the stolen artworks.   My firm represents Fritz Grunbaum's heirs in the litigation and I was lead trial counsel in the action in the Southern District of New York, story here.

Along with Dead City III in the September 1956 of artworks from Eberhard Kornfeld was the work "I Love Antitheses" and "Girl With Black Hair" that is now at Oberlin College.   Oberlin's Allen Museum has refused to share its research or to publish a full provenance of "Girl With Black Hair" with Fritz Grunbaum's heirs in violation of the Washington Principles on Nazi-Confiscated Art.   The earliest provenance given of Girl with Black Hair by Oberlin College is Switzerland, 1956.

Artkabinett also has a story Infamous Collector Leopold Dies at 85 on Rudolph Leopold, the art collector who amassed a number of stolen artworks that Austria has never returned to the Jewish families from whom they were stolen.

Related:   Will Austria Return Egon Schiele's Portrait of Wally?  and David D'Arcy's Settlement close on Portrait of Wally case

Work stolen from Fritz Grunbaum at Oberlin College here.  More on the battles over Fritz Grunbaum's collection and Oberlin's falsification of the provenance of Girl With Black Hair here.

Watch the Boston College video here.

More information and coverage of the 1928 Hagenbund/Neu Galerie correspondence in the following Powerpoint:

Federal Bar Association ND Ohio IP Crimes Seminar on Nazi Art Looting

View more presentations from Raymond Dowd.

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Art Litigation: Austria to Buy Back Egon Schiele's "Portrait of Wally?"

Die Presse reports today that the Republic of Austria may be preparing to try to purchase the stolen Schiele Portrait of Wally.  German language link:  http://diepresse.com/home/kultur/578029/index.do?_vl_backlink=/home/kultur/577683/index.do&direct=577683

Use Google translate to get an idea of the article.  Background on the story from my past posts here. 

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Art Litigation: Will Austria Return Egon Schiele's Portrait of Wally?

Today's New York Times obit of Rudolph Leopold makes passing reference to the fact that he was to stand criminal trial in the United States on July 26 on the issue of whether he knew that "Portrait of Wally" (above) - was stolen.  After the Justice Department seized the work, my understanding is that it's been sitting in a warehouse in Long Island City, unseen by the public for over a decade.   So Austria will now have to decide whether it wishes to continue to fight the US government or to throw in the towel and give Portrait of Wally back to the family of the art dealer from whom it was stolen.

I understand that an Austrian paper reported yesterday that Austria would have a majority of the Board positions on the Leopold Museum, which makes it much tougher for Austria to continue to pretend that the Leopold Museum is a "private" institution, the fiction it has used to avoid returning stolen property up until now.

Readers of Austrian tea leaves predict that the death of Hans Dichand, Austria's most powerful man and long-term Nazi sympathizer and anti-Semite, is more significant in determining Austria's approach to the problem.   Leopold was under Dichand's political protection in Austria - he was an extremely powerful media mogul who made and broke politicians daily.  Now that Dichand is dead, there is a much greater likelihood that many of the stolen artworks in the Leopold Museum will be restituted.   Apparently, Dichand had a vast art collection that is not free of controversy.

My previous posts on Rudoph Leopold, the Leopold Museum, and Austria's dithering here.  Perhaps the New York Times will show a renewed interest in the topic of Nazi art looting.   If U.S. papers like the New York Times cover these issues, it has a major impact in Austria.    When U.S. papers ignore the topic, Germany and Austria seem to lose any momentum towards restitution.

Rudolf Leopold, Art Collector, Dies at 85 - Obituary (Obit) - NYTimes.com

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On the Eve of Criminal Trial in U.S., Rudolph Leopold, Collector of Artworks Stolen from Jews, Dies in Vienna

Egon Schiele's Dead City

Art collector Rudolph Leopold died today in Vienna, Austria.

In 1998, D.A. Robert Morgenthau seized two stolen artworks at the Museum of Modern Art that Leopold had loaned to the MoMA:  Egon Schiele's Dead City and Schiele's Portrait of Wally.

Leopold was scheduled to stand criminal trial this summer before the Hon. Loretta A. Preska in the U.S. District Court for the Southern District of New York after Judge Preska determined that Portrait of Wally was stolen.

But MoMA returned the stolen Dead City to the Leopold Museum in Austria.  The Austrian Provenance Commission's head Dr. Christoph Bazil, has repeatedly promised to investigate Dead City's provenance and those of other Schiele's stolen from Fritz Grunbaum that are in the Leopold and Albertina Museums in Vienna, but after 11 years, no report has issued.

Austria purchased Leopold's collection and made Leopold director of the Leopold Museum for life.  It remains to be seen whether Austria will carry through on its promises to investigate and return the stolen works in Leopold's collection.

Article 26 of the 1955 Austrian State Treaty requires Austria to return all property stolen from Nazi persecutees.  Yet Austria has not only failed to return the property, but repeatedly set up enabling legislation designed to frustrate claims and then let the legislation lapse.

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Austria and Fritz Grunbaum's Stolen Schieles at the Albertina Museum

In 1955, Austria signed a treaty with the United States promising to give back all of the property it stole from Jews during the period of Nazi "occupation" of Austria.   Ever since, Austria has treated this obligation largely as a joke, thumbing its nose at Jews who attempted to get their property back.  Only in the 1990's through a combination of class action lawsuits and the actions of the Clinton Administration spearheaded by Amb. Stuart Eizenstat, did Austria instead agree to pay pittances to Jewish persecutees in lieu of giving them their property back.   The sad tale is well told in Eizenstat's book Imperfect Justice.

But the class action settlements did not cover stolen artworks in Austria.  In 1998, in reaction to D.A. Morgenthau's seizure of Egon Schiele's Portrait of Wally and Dead City (Dead City belonged to Fritz Grunbaum), Austria passed an Art Restitution Law that permitted claims to be made against artworks in Austria's federal museum collections.  On April 13, 1999, the heirs of Fritz Grunbaum made claims to the following works by Egon Schiele that were stolen from Grunbaum while he was in the Dachau Concentration Camp:

Egon Schiele, Female Nude Seated on Red Drape, Back View
Sitzender weiblicher Rückenakt mit rotem Rock

Jane Kallir: Egon Schiele, The Complete Works 1998, New York №:1504
Gouache, watercolor, and pencil. Signed and dated, lower right. (48.2 x 31.8 cm).
Gutekunst & Klipstein, Nov. 24, 1955, lot 107 1

Exhibitions: London, 1964, no. 67, ill.; Hamburg, 1981, no. 214, ill.
Inventorylist Albertina: 39.931

Jane Kallier: Egon Schiele, The Complete Works 1998, New York №:1797: Heinrich Rieger; Gutekunst & Klipstein, Bern; Galerie St. Etienne, New York; Rudolf Leopold;

Provenance as per Catalog: "Egon Schiele" Würthle Gallery, Vienna 1925:
"Mutter und Kind", sign Egon Schiele 1915 Sammlung Fritz Grünbaum
Austria never responded to the claims of Fritz Grunbaum's heirs.  From 2000 through 2009, Austria claimed that it was "investigating" the status of the works.  In 2006, Mag. Eva Blimlinger was called in to oversee the investigation together with Mag. Annaliese Schallmeiner.


 Blimlinger is a respected Austrian historian and oversaw the Austrian Historian Commission's report found at http://www.provenienzforschung.gv.at/    The Blimlinger and Schallmeiner Report, which was supposed to have issued in the fall of 2009, never has seen the light of day, apparently the victim of the Austrian Federal Ministry for Education, Arts and Culture.   Why was that report killed and what did it say?
 
In the summer of 2009, at the Prague Conference on Holocaust Era Assets, Minister Claudia Schmid promised Congressman Wexler that she would investigate the status of the Grunbaum works at the Albertina.  I spoke to Dr. Christophe Bazil and Dr. Thomas Baier, who reassured me that they would investigate the issue and be in contact.   I wrote to them and never got any response.
 
In February, a client alerted me to a forum to take place in New York on Austrian Restitution.  The program is here.    I was rather shocked that the very Austrian officials who had promised to look into the Grunbaum affair and who did not have the time to answer my communications were to be speaking in New York City.
 
By failing to return property belonging to Jews, Austria has breached its obligations under the Austrian State Treaty of 1955.  This treaty was a condition of Austria's existence, like our Constitution.  The Allies - Russians, French, British and Americans - pulled out of Austria on the promise that all property would be returned to Jews.   Instead, Austrians continue to live in homes stolen from Jews, operate businesses stolen from Jews, and to buy, sell and enjoy art stolen from Jews.
 
Since the Allies left Austria, Austria has enacted successively a system of inadequate and insulting postwar laws that failed to restore property to Jews.   To understand Austria's obligations clearly (the treaty is written in plain English), we look to the actual writing. Article 26 of the 1955 Austrian State Treaty states as follows:

PROPERTY, RIGHTS AND INTERESTS OF MINORITY GROUPS IN AUSTRIA

1. In so far as such action has not already been taken, Austria undertakes that, in all cases where property, legal rights or interests in Austria have since 13th March, 1938, been subject of forced transfer or measures of sequestration, confiscation or control on account of the racial origin or religion of the owner, the said property shall be returned and the said legal rights and interests shall be restored together with their accessories. Where return or restoration is impossible, compensation shall be granted for losses incurred by reason of such measures to the same extent as is, or may be, given to Austrian nationals generally in respect of war damage.

The full text of the Austria is found here, courtesy Wikipedia.  You will see that there are no "if's" ands or "buts" in the Treaty.  Its language is unconditional and does not depend on enabling legislation.  Indeed, any enabling legislation that fell short of the absolute terms of the Treaty would be unconstitutional in Austria.

It is to be hoped that the U.S. State Department will assist the heirs of Fritz Grunbaum in obtaining a copy of the Blimlinger/Schallmeiner Report and in facilitating conversations through the U.S. Embassy in Vienna, consistent with the Washington Principles on Holocaust-Era Assets.   It is to be hoped that President Obama's Ambassador to Austria, Amb. William Eacho will take a personal interest in the plight of Jews dispossessed in the Holocaust.

Leopold Foundation Investigation Report Issued: Austria To Investigate Leopold Museum, Victim Compensation Promised

According to a December 25, 2009 article in the Kurier, the Austrian government has announced that a 2,000 page report of an investigation into the Leopold Museum's holdings of artworks looted from Jewish victims of the Holocaust has been completed but has not yet been released to the public. 

Apparently, the Leopold is refusing to return the stolen artworks, but will offer money instead.

More stalling from Austria on Egon Schiele's Dead City and Portrait of Wally.  Austria claims to have been investigating these cases for a decade, it is scandalous that they haven't yet done the right thing.

Let's hope Austria releases the report quickly.

http://kurier.at/kultur/1965210.php

A rough summary follows:

Leopold Museum: First Restitution Report
Exchange by all participants on the basis of recognized facts. Report by the provenance researchers engaged by the Leopold Museum and Culture Minister Claudia Schmied. According to Schmied’s plan, an independent commission will be created in the second half of January that will make recommendations about returning objects. The Leopold Stiftung has also said that as a “sign of good will,” they are prepared to make financial contributions to victims and heirs.

The provenance researchers, Michael Vladika and Sonja Niederacher have drafted a report of around 2,000 pages, but have not released the details. This report is supposed to be published in January. Until then, they are bound by confidentiality agreements. The Ministry and the Leopold Museum are taking time to study the report.

The researchers said that they need more time to study the collection of cabaret performer Fritz Gruenbaum, from whose collection Dead City III and Portrait of Wally were confiscated in New York in 1998, and which precipitated a debate. Wally is the subject of an on-going court case in New York and is not treated in the report.


The report covers, among other works, four Schiele graphic works from the collection of Karl Maylaender, who was deported to Lodz in 1941. It also treats three works by Anton Romako that were taken from the collector Oskar Reichel, which Leopold acquired by exchange.



If the Leopold Collection, which has been a foundation since 1994, is considered to fall under the 1998 Restitution Law [which applies to state collections] then these works would certainly be the subject of restitution cases. Leopold has maintained that he acquired these works in good faith as a private citizen. The question is, “what did he really know?” stands at the center of the matter.