Secret Holocaust Art Agreement

Donn Zaretsky at The Art Law Blog offers some thought-provoking analysis of the Bloomberg story, "Judge Slams MoMA, Guggenheim on Secret Holocaust Art Agreement" published June 18. The headline refers to US District Judge Jed Rakoff's "lambasting" a secret settlement made between the museums and "a German historian named Julius H. Schoeps and his relatives on Feb. 2, the day a trial was to begin to determine the ownership of two Picasso paintings." The paintings in question were the 1906 "Boy Leading a Horse" now at the MoMA and the Guggenheim's 1900 "Le Moulin de la Galette." As Zaretsky points out, it's unclear why Judge Rakoff was so upset with the museums, or why, "despite the slamming, the Court left the confidentiality in place."

Regarding the settlement, the directors of the MoMA and Guggenheim in a joint statement said,

“Our provenance research made clear from the beginning that the museums are the proper owners of these works, and that the claims had no merit. It was a prudent decision -- we settled simply to avoid the costs of prolonged litigation, and to ensure the public continues to have access to these important paintings.”

When it comes to the reclaiming or the restitution of seized art from museums, the costs of "prolonged litigation" often result in the public's loss of access to many "important paintings." Suppose the museums' provenance research was not as thorough as they had thought and they lost to Schoeps et. al. at trial. Would the plaintiffs then have been able to afford the exorbitant legal fees that often come with art restitution cases? Additionally, if this was the outcome would they then have been forced to sell the paintings to pay the fees? It may be the secret settlement was a way to compensate Schoeps et. al. while also keeping the Picasso's on public view.

This discussion about art restitution legal fees comes on the eve of Christie's Impressionist/Modern Art Evening Sale in London. A highlight of the sale is Lot 7 - Pissarro's "Le Quai Malaquais et l'Institut," being sold on behalf of Gisela Bermann Fischer. According to Bloomberg, Fischer "recovered 'Le Quai Malaquais, Printemps' after a quest that pitched her into a battle of lawyers’ letters with Bruno Lohse, a Nazi art dealer appointed by Hermann Goering to loot treasures in occupied France, and finally led to a Zurich bank vault, where the picture was stashed in a safe." Fischer has decided to sell the painting because after having "invested such a tremendous amount over the past 13 years, so much energy and so much of [her] finances... it would be frivolous to keep it.” However, it should also be said that the protracted legal battle has cost her at least 500,000 Swiss francs ($466,000) in fees. For Fischer, 80, the proceeds from the auction will likely assist her paying off the legal fees (the painting is estimated to fetch $1,473,300 - $2,455,500).

In 2006 the relatives of Dutch-Jewish art dealer Jacques Goudstikker used the proceeds from the sales both privately and at auction of restituted art to pay off the millions of dollars worth of legal fees and expenses that had accumulated over the nine years it took to finalize their agreement with the Dutch government. As of April 2008, they had already sold two-thirds of the 200 Old Master paintings they reclaimed. It is highly unlikely that the same number of paintings that hung in museums around the Netherlands prior to their restitution are still hanging in museums or public spaces today.

Often law firms that specialize in restitution will defer the research costs and legal fees until after the trial. But, are they simply waiting to cash in on a painting's potential value at auction? In many cases, it would appear that the owners of reclaimed art have little choice, but to place the art up for sale. Restitution implies restoring something stolen to its proper owner. Clearly, restitution law is not advertised as pro bono work; however, it is ludicrous to work so diligently to recover an object with such sentimental value only to be forced to sell it to repay one's legal debts. Possibly, if they had the opportunity these individuals would rather donate or loan the art to a museum for the public's continued enjoyment?