Nazi Looted Art Case: Restitution

There has been continual coverage of the 2011 discovery of over 1,400 Nazi-seized paintings made public this month.  It is a fascinating story with lots of moving parts:

• The sheer value of the art is tremendous, initial estimates ranging from $1.3 - $1.8 billion.
• Cornelius Gurlitt, the 80-year-old recluse who inherited the works is a very interesting character, to say the least.
• But the reason the case is being so widely covered and getting so much attention...Restitution

Confiscated artwork does not equal restitution. In 1938, the Nazi government ordered all state-run museums to remove "degenerate art" from their collections.  As a matter of fact, proof that a piece was in a German museum prior to 1938 is good proof that it was not stolen from a Jewish family.  No moral dilemma.

There is a great article out by the New York Times today that goes into detail on the 1938 law that gave Nazi's the right to seize "degenerate art" and sell it in the open market.  Very interesting and informative read discussing how to handle the law, which is still on the books today - check it out.

-M.P. Callender Signet Art

Knoedler Gallery: The Value of Forgery

Knoedler Gallery, the second oldest fine art dealer in the country, closed abruptly in late 2011 after 165 years of business in the art world.

The gallery’s website was taken down and replaced with a note.

            “It is with profound regret that the owners of Knoedler Gallery announce its closing, effective November 30, 2011. This was a business decision made after careful consideration over the course of an extended period of time. Gallery staff are assisting with an orderly winding down of Knoedler Gallery.”

No one answered the phone.  The doors were locked.  One of the most prestigious galleries that helped create and cultivate American art was finished, and it took the art world by surprise.

Born in Bavaria, Michael Knoedler immigrated to New York to open a branch for Goupil, Vibert & Company, a Parisian dealer he worked for at the time.  He established Knoedler and Company in 1846 and attracted wealthy clientele from the California gold rush and the discovery of petroleum in Pennsylvania.  By 1859 he was able to buy out Goupil and move his gallery to North Broadway.  Not much is known about Knoedler himself, but he cultivated a reputation for his gallery and for American Art.  Before his death in 1878, he brought his son, Roland, into the business to take lead; his other sons, Edmond and Charles, also joined later.

The rest of Knoedler’s history is extensive and romantic; the gallery is praised as being essential to the American art world and as an institution that represented great artists.  However, as allegations of forgery and corruption taint its glorified history, Knoedler Gallery is also going to be remembered for its downfall.

Eight lawsuits have been filed by customers who claim they were fooled into buying forged artworks purported to be originals from the hand of modern masters like Robert Motherwell, Jackson Pollock, Mark Rothko and Richard Diebenkorn.  As of August, two of these claims have been settled, one involving a Jackson Pollock action-painting purchased for $17 million.

Stories and articles detailing the accusations as they unfolded against Knoedler, and Knoedler’s response to those accusations, have been bouncing around since the gallery shut their doors in November, 2011.  Boiling down all the moving parts and players leaves: Ann Freedman – Knoedler’s former gallery director, president and 31-year employee who resigned in October of 2009; Julian Weissman – a dealer in his own right who worked for Knoedler in the 1980’s; Glafira Rosales – a dealer from Long Island; and Pei-Shen Qian- a 73 year old immigrant from China and struggling artist.

There are a lot of pieces to the puzzle, more than 60 drawings and paintings in question and over $80 million spent on them, but when looking past the trees to see the forest it is all pretty straight forward.  Glafira Rosales found Pei-Shen Qian in Queens and paid him to paint fakes for her (only a few thousand dollars for each piece). She then took those fakes to Ann Freedman at Knoedler Gallery or Julian Weissman and, over a period of 15 years, sold them as newly discovered works.

Rosales claimed she obtained the majority of the paintings from a collector who did not want to be named.  This collector, later referred to as “Mr. X” or “Secret Santa,” supposedly inherited the artwork from his father.  Throughout this ordeal Knoedler gallery, Ann Freedman and Julian Weissman have repeatedly stressed they never doubted the authentication of the artworks provided by Rosales.  Even without documentation of provenance, they always believed the pieces to be authentic.

The civil lawsuits filed by collectors claim Knoedler Gallery, Ann Freedman or Julian Weissman sold them fake Abstract Expressionist artworks that Glafira Rosales provided.  It is now known all the paintings were done by Pei-Shen Qian in the style of well-known Abstract Expressionist masters, and the thing is – they were well done.  There is a high skill level behind Qian’s trained hand.  He was able to study, master, and replicate the techniques and individual nuances associated with each artist he copied.  His fakes, purported to be and marketed as authentic originals, flew under the radar and passed initial sniff tests by experts; for the first few years there was no suspicion, nothing that raised red flags or caused concern.

It wasn’t until 2009, when several Robert Motherwell works were questioned and investigated by the F.B.I., that the bubble burst.  Rosales was arrested and released on a $2.5 million bond as she awaited trial for the criminal charges brought against her, and, so far, she is the only person being criminally charged. Her trial was scheduled for Monday, September 16.  Ann Freedman has brought two defamation of character suits as of this September, claiming several news outlets did not do due diligence in reporting the experts she consulted regarding authenticity on a number of paintings.  Mr. Qian, the man behind the “Secret Santa” and “Mr. X” monikers, has since fled to China.

It was recently reported that Freedman sold 40 counterfeits and Weissman sold 23; clients who purchased the fakes Rosales provided are suing both Freedman and Weissman in civil court.  The U.S. Attorney for the Southern District of New York released a statement stating Rosales earned $33.2 million selling the forgeries to the Manhattan galleries through Freedman and Weissman; the galleries then sold the Rosales fakes and profited over $47 million total.

The dust is settling as much of the media hyped ‘forgery in the art world’ moves from the gallery to the courtroom.

But what of the value of forgery?  Who is to blame, really?

Many responses to Knoedler Gallery’s involvement in the long-running fraud mock the art world, asserting if experts and collectors can be fooled it’s their own fault.  Likewise, praise is brought to Rosales and Qian for swindling millions of dollars out of the hands of those elite who could afford to buy and invest in such property.  This response, letting the rich endure the consequences of their privileged investments, comes up in the debate of forgeries; especially when the forgeries have passed the tests of experts and allowed the thieves to profit.

Make no mistake – they are thieves.  People like Wolfgang Beltracchi, Ken Perenyi, John Myatt, and Han van Meegere (to name a few) are crooks.  They create a product, create a story surrounding it, or, in some cases, fabricate provenance materials; then, profit off those they are able to fool.  Like the Rosales-Qian team, these forgers were skilled and conniving, able to deceive and trick the eye in order to cash-in.

So why is there a portion of the public who cares not for the losses suffered by collectors and investors?  Why is art fraud considered by the public as different from other forms of fraud, even though real people suffered?  Honestly, it beats me.

I mean, OK, I get it – the average family working to keep debt at bay and a roof over their heads doesn’t have much sympathy for the guy who loses a few million on a forged painting.  But, it makes no sense for the forger to be portrayed as a Robin Hood with a paintbrush.  It is illogical to assert the mindset that, ‘the rich got what they deserved’ by purchasing or investing in artwork that turned out to be fake.

The wheels of justice turn slowly, but at least this fraud ring has been found-out.  As of 1:24 p.m. this last Monday, Glafira Rosales pleded guilty to all nine counts brought against her, including wire fraud, filing false tax returns and money laundering, that she faced in connection with the ongoing investigation of the sale of forged works of art by the now-closed Knoedler gallery.  When asked by the judge to explain why she is guilty Rosales admitted to, “falsely represented authenticity and provenance” on works sold to Knoedler Gallery and Julian Weissman Fine Art as being works by abstract expressionists including Mark Rothko and Robert Motherwell.  She confessed the works were “actual fakes created by an individual residing in Queens.”

She faces up to 99 years in prison, though her sentence is likely to be far less, and $81 million in restitution.  She is free on bail and will officially be sentenced in March of 2014.

Greed will make people do crazy things. Rosales will likely spend the rest of her life in prison.  But that cannot undo the damage she has done.  Her actions shut down one of the longest running art galleries in American history, cost many people their jobs, soiled the reputation of several dealers and experts in the art world and cost real people real money and anguish.

So, the value of forgery?

Forgery involves an intention to deceive others about a work's history, and for Glafira Rosales the value of forgery came down to facing a maximum of 99 years in prison and 81 million dollars to make amends for the damages she caused.

That's a stiff consequence but the art world will be sorting out the damage she has done for many years to come.

-M.P. Callender

Recent articles on the case

New York Daily News The New York Times Art Daily Art Market Monitor

Art & The Third Reich: Appraising Art in the Aftermath of World War II

There it was.  Twenty-seven years as an appraiser and the topic had always been looming somewhere in the background.  I always knew at some future time a very large ethical conundrum would rear its ugly head, what to do when I discover Nazi-looted art in the collection of a client.   On the phone that day was a colleague who needed my help with a collection of art owned by an elderly German lady, now living in North Texas, a German lady whose family had been “personal friends of Hitler.”   My colleague’s client wanted to sell the work and I was asked to give my opinion of value.

Ever since the Nazi war machine undertook their hideous plan of complete cultural annihilation of the Jews in the late 1930’s, the ripples of consequences have continued to expand.  The Allies did defeat the Nazis in 1945.  But by that time, millions of lives had been lost and the Nazis had systematically looted the fortunes of Jewish inhabitants of every country through which they had waged war.   In some countries, they swept in and seized the collections and shipped the owners off to concentration camps.  In other areas, like Poland, they carried out a scorched earth policy, seeking to erase the cultural heritage of whole people groups as they swarmed through.

Hitler fancied himself an artist.  As an 18-year-old he had applied to the Art Academy in Vienna and been rejected twice, his drawing skills declared unsatisfactory. He had a very set idea of “good” art vs. “bad” art.  Hitler’s tastes ran to realism.   He adored the old masters and disdained most art created from late 19^th C. Impressionists forward.  Power in Germany during the Nazi-era was dispensed by Hitler.  Climbing the ranks meant adopting Hitler’s interests and his tastes.  Art and politics were always intermingled in the Third Reich. Hitler planned to “Germanize” every country under his control.   Young Nazi officers and political leaders were encouraged to collect art, attend concerts and cultural events, so long as the art fit Hitler’s parameters for “good” art.   The Nazi elite had a bit of a competition amongst themselves for who might amass the best and biggest collection of art. What better opportunity to “collect” than to rape the collections carefully assembled over years by collectors and dealers who were named enemies of the state and disenfranchised?

But early in his rise to power, Hitler started his cultural policies in Germany itself.  He ordered all museum directors within Germany to “cleanse” their collections of what were labeled Degenerate Art, and mounted an art show in Munich in 1937 of these pieces.  Labels accompanying the exhibition derided the work and propagandized against the creators, mostly Jewish artists.  After removal from German museum collections, many were destroyed.  However, the Nazis were conniving enough to offer those that could be sold in the Paris and Swiss markets up for sale.

As the war progressed, a large corps of Nazi bureaucrats whose job it was to expropriate all items of value closely followed the war machine into each new area of conquest.   In such cultural hubs as Paris, the Nazis and their Vichy collaborators’ goal was to have business and commerce continue as the Nazis took over power.   Galleries not owned by Jews remained open, some selling pieces stolen from their former Jewish colleagues.  Auction houses in Paris and neutral Switzerland continued with their business.  Questions about the origins of the artwork being offered for sale were not being asked.   Whether owners were selling under duress or whether the pieces offered were stolen goods, the sales went on unabated.   At the same time, large collections of stolen art were being gathered at the Jeu de Paume in Paris and specially commandeered trains were hauling loads of art back to Germany on a regular basis.  Hitler had made his plans for a large art museum in Linz, Austria be known early in the war and his loyalists began assembling a massive collection of art for that project.

At the end of the war, the American and British forces set up what came to be known as the Monuments Men, corps of specially trained military officers whose job it was to quickly locate art looted by the Nazis, gather the pieces into several safe storage areas, attempt to catalogue the art and begin the process of returning works to their rightful owners.   This proved to be a huge task that raised many ethical and legal questions.  What sort of proofs were those seeking return of their property required to offer? These people had been driven out of their homes.  The idea that they would have sales receipts or other proofs of ownership was unreasonable.  What was to be done with unclaimed pieces?  After all, the Nazi regime killed six million Jews.  Some of those whose artwork was stolen were murdered and would never return for their art.  What about pieces that had been sold by Jewish families during the war years?  Were those sales to be considered irrelevant because the owners likely were under duress or were those to be considered legitimate sales?

On some matters, an international consensus of legal opinion regarding ownership and reparations was developed.  On other matters, various countries implemented laws which conflict radically with one another.  For instance, America and Great Britain have laws in place that make it illegal to have title to stolen goods, whether one was knowledgeable about the theft or not.  A thief cannot pass title to stolen goods, whether the buyer is knowledgeable of the theft or not.  It these countries, if a property is offered for sale and there is a legitimate claim of ownership from a former owner, that owner has the legal standing to seek their property.  Under Swiss law, however, if a purchaser is a “good faith” purchaser of an item, they may acquire a title to that property superior to the original owner.   In other words, if the purchaser had no reason to believe they were buying stolen goods, they can claim title to the purchased item.   An original owner must legally prove the current owner knew he was buying tainted goods in order the reclaim the property.

In the almost 70 years since the end of World War II, much has changed in the art market.  There are whole bookshelves of historical books detailing the atrocities carried out be the Nazis.   Dedicated art historians and sleuths have picked through the records and reported to the world about the Nazi regime’s methodology and many of the individual victims of their schemes. Databases of stolen art are now much easier to access.  Art historians, museum curators, auctioneers and appraisers have been trained regarding what to do with items presented with provenances that get murky or sketchy in the period surrounding WWII.  As one generation succeeds the next and artwork is offered for sale publically for the first time since the 1940’s, some rancorous lawsuits have occurred between Jewish heirs and those who had no idea that their collections contained pieces with ownership questions.

I have always wondered about the competing ethical issues that would come into play if I was ever asked to appraise a piece that research revealed might have been stolen during WWII.  An appraiser has an ethical responsibility to her client to maintain the privacy of that client.  We are not allowed to reveal the names of our clients, their reasons for seeking an appraisal or any of the salient facts about their collections, unless given permission by our clients or compelled by law.    My only connection thus far to WWII-related art was an appraisal for the heirs of a Jewish family that had been able to escape Germany in 1939, through Holland and eventually to Alabama and had miraculously been able to bring some of their art with them.   But, I had never personally had to deal with the sticky issue of stolen art.  I had always presumed it would raise its ugly head in the form of an owner with a nice collection that had come down through inheritance, where the intervening generations had lost the story of how and where grandpa had bought a particular painting.  I worried about how a client might take such news about their beloved painting and what I might do if they chose to bury the information. Would I have an ethical obligation to maintain my client’s privacy or were there laws in place to compel that the information go public?  Gratefully, I have never been faced with the issue in that manner.

But, on that afternoon a few weeks ago, the issue came up in the most unexpected way….an owner who had been a young girl in a prominent family, who watched the rise of Nazism and had met Hitler personally.   Was I about to inspect a large cache of previously Jewish-owned art?  How did this woman come to be living in our neighborhood for so many years?   How had she gotten out of Germany in the post-war years and brought artwork with her?   I wondered all of this when I took my friend’s call.  But, we did not discuss much of it on the phone that afternoon.   After so many years as an appraiser, one lesson well learned is that family stories are always intriguing and sometimes conflict with what can be proven from personal inspection of the artwork.  As it turned out, the paintings that came for inspection left me with no questions of ownership.  They were all portrait miniatures of various family members.  The lady had been a member of an Austrian family that had included minor royalty and several decorated soldiers in the 18^th C.; no hidden Vermeer; no tough conundrums, just portrait miniatures.   So, I did the research necessary and gave the values to my colleague.

This is an issue that I expect will continue to haunt the art world for many years to come.  One might think there would not be many competing ownership claims sixty-eight years after the war has ended.  But, they do arise.  Some of the artwork left the market during the war years and has not publically been seen since.  As older generations pass art to their heirs, as museums begin to investigate more thoroughly the provenances of their collections, items will come to light.  The process of making a claim for art has never been easy and while the intervening years have changed the approach to research, an heir has to be tenacious if she or he expects to receive reparation for their family’s artwork.  Professionals in all fields related to art are expected to be aware of items which might be questionable.  Most American and European museums have standardized their policies regarding such materials and most do seek to return items to heirs when such objects are discovered.  Auction houses are on guard for items that might be caught up in contentious litigation.  But at the private level, appraisers do have competing ethical obligations.  I believe we are responsible for good research and for reporting results to the owners who are our clients.  What is done with any discoveries after that point may be out of our control.

Brenda Simonson-Mohle, ISA CAPP Art Advisor, Appraiser

Post Script:

This is a fascinating, albeit morbid, area of research.   For those who would like to delve into some of the history of the period, here is a list of resources and, where not evident by the titles, a brief synopsis of what each covers.

The Monuments Men: Allied Heroes, Nazi Thieves and the Greatest Treasure Hunt in History by Robert M. Edsel and Bret Witter

The Monuments Men – new movie –for release late fall, 2013.  Preview below.

http://www.youtube.com/watch?v=CreneTs7sGs

Be sure to catch The Monuments Men, a George Clooney directed movie going into wide release later this fall.  This is a Hollywood version of events.  But, I hope it tells the story of this fascinating group of individuals who did much to rescue precious art and preserve our cultural patrimony from the grasp of the Nazis.

The Rape of Europa: the Fate of Europe’s Treasures in the Third Reich and the Second World War by Lynn H. Nicholas Traces Hitler’s path of destruction and acquisition in various countries over the course of the war. There is also a documentary film by the same title and based on the book.  It is stupendous and adds visuals to the weight of Nicholas’ words.

Art and Politics in the Third Reich by Jonathan Petropoulos The first part of this book describes the importance of art to Hitler and how it figured into Nazi life and the Nazi definition of German culture.  The second half covers several individual highly placed Nazis, how and what they gathered.

The Lost Museum: The Nazi Conspiracy to Steal the World’s Greatest Works of Art by Hector Feliciano. This book discusses why art was important to Hitler and the Third Reich.  It also traces the systematic pillaging of several major collections targeted by the Nazis. It also discusses the role of the art market during the war years in disposing of and paying the Nazis for stolen are and the turmoil certain heirs have undergone in trying to recover their art.

The Spoils of War; World War II and its Aftermath:  the Loss, Reappearance and Recovery of Cultural Property edited by Elizabeth Simpson This is a collection of 50 essays presented at an international symposium on Nazi art looting that was hosted by Bard Graduate Center (New York, NY)  in 1996.   Each of the speakers takes on the loss of art in a given country and thorny issues they have encountered.  The appendix of the book also lists treaties from various countries that relate to the protection and return of cultural property.

Interesting Articles and Sources:

The Monuments Men Foundation http://www.monumentsmenfoundation.org/index.php

“The Lady in Gold: The Extraordinary Tale of Gustav Klimt's Masterpiece, Portrait of Adele Bloch-Bauer”