HEAR and the Guelph Treasure Recovery Efforts: Restitution in Review

By Nina Mesfin*

On June 7, 2016, the Senate Judiciary Committee heard a bipartisan-backed piece of legislation called the Holocaust Expropriated Art Recovery (HEAR) Act, S. 2763, 114th Cong. (2016). As recently reported by Center for Art Law and elsewhere, the HEAR Act aims to allow “civil claims or causes of action to recover artwork or other cultural property unlawfully lost because of the persecution during the Nazi era, or for damages for the taking or detaining of such artwork or cultural property.” In other words, the HEAR Act proposes a federal statute of limitations on restitution claims as opposed to statutes of limitation that vary by state in order to “lift unfair restrictions from heirs’ claims.” In addition to garnering support from both the Republican and Democratic parties, the HEAR Act also offers advocates outside of the political realm.

Screen Shot 2016-08-09 at 11.21.25 AMFollowing the bill’s introduction, on June 7th actress Helen Mirren testified before the Senate on behalf of the bill. Mirren’s support, in part, stems from her recent portrayal of Maria Altmann in the film Woman in Gold (released in 2015). Altmann was a Jewish woman who successfully reclaimed five Nazi-looted works by Gustav Klimt from the Austrian government in the landmark case Republic of Austria v. Altmann (03-13) 541 U.S. 677 (2004) 327 F.3d 1246, affirmed. The Altmann case set a legal precedent in which the Foreign Sovereign Immunities Act (FSIA) was applied retroactively, allowing a sovereign body to be tried in a U.S. court.

The timing of Woman in Gold, which has drawn public attention to Altmann’s success, coupled with recent congressional efforts to facilitate the restitution of Nazi-looted works, may impact the outcome of other restitution claims. One of these cases involves the Welfenschatz or Guelph Treasure– a collection of medieval art currently in the Kunstgewerbe Museum in Berlin—with an estimated value of $250 million dollars. On February 23, 2015, the heirs of the art dealers who sold the Guelph Treasure to Germany filed a civil action in a U.S. district court against Germany and the Prussian Cultural Heritage Foundation. The case of the Guelph Treasure will test further the limits of both the U.S. government’s dedication to Holocaust-era restitution claims and ability to broker restitution deals.

What is the Guelph Treasure?

The Guelph Treasure, consisting of 82 gold, silver and gem encrusted liturgical objects from the Church of St. Blaine in Brunswick, Germany, and according to art historian Christina Nielsen, it is considered to be “the greatest group of medieval objects ever offered for sale.” The objects range in date from the 8th to the 15th century and the majority are works of German craftsmanship while other notable pieces are Italian and Byzantine in origin. One of the most extraordinary characteristics of this collection is its indisputable authenticity; records indicate that prior to its auction, the Treasure has been in continuous care of the same noble German family for more than 800 years.

Subsequent Sales of the Treasure

Duke Ernst August was the last of his German ancestors to possess the Guelph Treasure. Due to economic hardship in 1928, the Duke was forced to put a price on what was considered a collection of “incalculable intrinsic value” because of “its antiquity and art-historical importance”(Nielsen, 442). To the dismay of many German citizens and the State itself, the Duke sold the Treasure to a consortium of Jewish art dealers in 1930: Julius F. Goldschmidt of Frankfurt, Berlin, and New York and Z.M. Hackenbroch and J. Rosenbaum of Frankfurt. Although the Duke intended for the collection to stay together, the consortium of art dealers, having failed to resell the collection in its entirety, began to sell off pieces of the Treasure.

After meticulously cataloging the collection, the dealers began selling, or rather attempting to sell, portions of the Guelph Treasure in Germany. As Germany frowned upon the sale of what it considered to be cultural patrimony, the new owners, a consortium of Jewish art dealers, then tried to sell the collection in the United States. The Guelph Treasure was first exhibited in New York in 1929, and by 1934, the consortium sold 40 of the Treasure’s 82 pieces to several museums in the United States, including the Cleveland Museum of Art (Nielsen 443). In 1935, the remaining 42 pieces of the Treasure were sold to the State of Prussia for 4.25 million Reich marks, or $1.7 million. High-ranking Nazi official Hermann Göring oversaw the acquisition and later gifted it to Adolf Hitler. It is the legality of the second sale in 1935 that the heirs of the consortium are disputing.

Appearing before the German Advisory CommissionScreen Shot 2016-08-09 at 11.27.45 AM

Before their U.S.-based lawsuit, the heirs of art dealers J. and S. Goldschmidt, I. Rosenbaum and Z.M. Hackenbroch appeared before the German Government Advisory, also called the Limbach Commission. The Commission is a joint initiative of the Federal Commissioner for Cultural and Media Affairs and the Länder and the National Association of Local Authorities; it invites claims concerning Nazi-looted property that public institutions in Germany currently possess. The Commission serves as a mediator between these public institutions and former owners as well as their heirs, hearing cases and offering resolution recommendations. The New York Times reported that the heirs’ lawyers cited the “climate of fear and uncertainty for the [dealers’] futures in which Jews in Germany found themselves in 1935,” arguing that these dire circumstances suggest that any “purchase by the state from Jewish businessmen must be considered as having taken place under duress.” The lawyers representing the heirs attempted to prove that the sale was, in fact, forced by explaining that the dealers sold the pieces for $4.3 million less than they had paid for it five years earlier. The panel attributed the ten percent market price decease to the economic downtown wrought by the Great Depression.

After contemplating this argument, in March of 2014 the Commission’s panel recommended that the 42 “jewel-encrusted, intricately wrought silver and gold crucifixes, altars and other relics of the Guelph Treasure should remain in the possession of the state-run foundation.” Bloomberg News noted that the Commission went on to state that “[f]ar from selling under duress, the consortium had been attempting to unload the Guelph Treasure for years,” pointing to the correspondence among consortium members celebrating the sale.” The Commission also noted that the Guelph Treasure is an exception to the Washington Conference Principles on Nazi-Confiscated Art, which all German museums have agreed to uphold. The Principles are a set of guidelines that maintain that “any art object sold by Jews for less than its fair value during this period (Jan. 30, 1933, through 1945) is a candidate for restitution,” a period that includes the Guelph Treasure.”

This ruling, in favor of the Kunstgewerbe Museum is one of many made by the Commission that has been met with criticism. As art journalist Catherine Hickley reports, the Limbach Commission has recently “come under fire for a lack of transparency, the length of time it takes, failure to appoint a Jewish member and the low number of cases it has mediated.” The Commission has only mediated thirteen cases since its founding in 2003, whereas its Dutch counterpart has issued more than 140 since 2002.** In July of 2016, Germany’s culture minister, Monika Gütters, actually announced plans to reform the Limbach Commission.

The Civil Lawsuit over the Treasure

Screen Shot 2016-08-09 at 11.32.39 AMAlmost a year after the Commission made its non legally binding recommendation, the heirs to the Guelph Treasure, filed a civil lawsuit in U.S. District Court for the District of Columbia. Philipp et al. v. Federal Republic of Germany et al., 15-cv-00266 (D. D.C.). According to a Washington Jewish Week article, the seventy-one page complaint alleges that the consortium sold the 42 pieces to the State of Prussia “via a manipulated sham transaction spearheaded by Dresden Bank, which was acting on behalf and by order of the two most notorious Nazi leaders and war criminals,” Göring and Hitler. The complaint further notes that the heirs used the fact that the alleged forced sale was made for less than 35 percent of its actual value and that the payment “was then subjected to flight taxes that were demanded so the Jewish dealers could flee Germany,” as evidence backing their claim. One of the dealers, Hackenbrock,was able to leave Germany in 1935, although died shortly thereafter in London in 1937. Details concerning the other two dealers, Rosenbaum and Goldschmidt, are unknown.

In order to justify filing this suit in a U.S. court, attorneys for the claimants invoked the Foreign Sovereign Immunities Act, which “provides jurisdiction over foreign states that conduct business in the U.S. via exhibitions and other museum-related activity.” According to O’Donnell, one of the attorneys representing the claimants, FSIA’s applicability to this case is straightforward, as “Jewish victims of persecution like the Plaintiffs’ ancestors are victims of takings in property in violation of international law.” He further explains, “[a]s a result, and because the Defendants are engaged in commercial activity in the United States, this case presents precisely the category of claims over which § 1605(a)(3) of the FSIA, the expropriation exception, creates jurisdiction.”

In March 2016, Germany and the Prussian Heritage Cultural Foundation responded by filing an eighty-five page motion to dismiss the case, contesting the jurisdiction of the U.S. courts. Within the motion, the defendants contend “that the persecution and expropriation of property from its Jewish residents were a sufficiently internal affair so as not to be a violation of international law.” O’Donnell has described this motion as “revisionist” and “troubling.” Most recently, on May 11, 2016, claimants filed an opposition to the motion to dismiss. The latest filing in the case was in June a reply to opposition to motion re motion to Dismiss the Plaintiffs’ First Amended Complaint. Now we are waiting for the court to review the filings.

Conclusion

The pending case involving ownership of the Guelph Treasure has brought two interesting issues into focus. The first is whether the blanket application of forced sales to an entire time period, in this case the years immediately preceding and spanning WWII, is legitimate, not taking into account the market or the profession of the seller, i.e. an art dealer who is almost always in the process of making a deal. The Guelph Treasure also tests the authority of advisory commissions with no binding power, as rulings made by the Limbach Commission are unenforceable. On the other hand, there are several other European arbitrating bodies whose opinions are binding, such as the Austrian Restitution Binding Commission and the Dutch Advisory Committee on the Assessment of Restitution Applications for Items of Cultural Value and the Second World War. As Hickley points out in her article “German minister promises to reform Limbach Commission after mounting criticism,” unlike the Limbach Commission, the Austrian and Dutch advisory committees do not require both parties to agree in order to mediate disputes.

In challenging the Limbach Commission’s clout, the case of the Guelph Treasure may bring a foreign body into conflict with the crux of the U.S. court system. It will be interesting to see if and how the U.S. judicial system, in its dealings with the Guelph Treasure, will impact the authority enjoyed by European advisory board’s ruling on contested art. As Elazar Barkan explains in The Guilt of Nations: Restitution and Negotiating Historical Injustices, restitution as a means of acknowledging gross historical injustices is a relatively novel phenomenon. Nowadays, it “is a large part of the growing attention being paid to human rights.” The question becomes: in which instances is restitution warranted and in which does it potentially exploit society’s overeagerness to atone for past atrocities? Furthermore, at what point, if at all, is it appropriate for a third party state to hear these claims and issue rulings? While the United States at times offers a venue to bring restitution claims, the outcome and the cost of these claims is unpredictable.

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**There are currently five restitution commissions: United Kingdom, Austria, France, Germany, and the Netherlands. In 2007, the United States government considered establishing its own restitution advisory commission, to no avail.

About the Author: Nina Mesfin is a Summer 2016 legal intern at Center for Art Law. She is a rising junior at Yale University majoring in Ethnicity, Race and Migration and concentrating in Art, Literature and Narratives of Race and Ethnicity. Nina is also a scholar in the Yale Multidisciplinary Academic Program in Human Rights.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

WYWH: You’ve Been Served – “Gerhard Richter Painting” and German Cultural Heritage Protection Law

By Elizabeth Weber, Esq.*

Screen shot 2015-04-17 at 2.41.44 PMOn February 3, 2016, the “You’ve Been Served” dinner and a movie event was hosted by the Brooklyn Law School Art Law Association. Attendees included attorneys, artists, art dealers, and students. The film screened, Gerhard Richter Painting, is a documentary that provides a glimpse, deliberately and slowly, into the life and artistic processes of visionary German artist Gerhard Richter. In the film, director Corina Belz highlights Richter’s creative process and allows viewers to watch Richter work on art in real-time. Interspersed in the film are clips from Richter’s youth, in which he discusses his views on art and life, which may or may not have changed for the artist over the course of his long and prolific life. The film attempts to provide viewers an intimate view of Richter’s past and his present: his escape from Eastern Germany at the age of 28, his trove of family photos that have an ambivalent effect on the artist, who wonders, “Who is this woman?” as he points to an image of his mother and wonders “Should I throw all of these away?” when trying to organize the photo trove in chronological order. In the film, Richter observed how American audiences tend to be more direct in commenting on his work, with one observer calling his gray series the English term for “scheisse.”

Following the screening of the  film, a partner in Sullivan & Worcester’s Litigation Department in Boston, Nicholas O’Donnell, led a discussion about German cultural heritage law. Mr. O’Donnell, who is the editor of the firm’s Art Law Report blog and an attorney working on a number of art law matters involving Germany – including the Restitution claim for the Guelph Treasure – discussed the hotly contested 2015-2016 German Cultural Heritage Protection Law. The first draft of this legislation proposed that all objects of national importance older than 50 years and valued at €150,000 or more must be granted an export license by the German government to leave German soil. A subsequent draft revision amended the value threshold, raising it from €150,000 to €300,000 and increasing the object’s age from 50 to 70 years. Additionally, the revision states that works of living artists may qualify as objects of national importance only with the artist’s permission. Having written about the proposed revisions already, O’Donnell described the law as archaic in a time when the art market is expanding beyond geographical national borders and becoming part of the larger global economy.

The legislation sparked outrage throughout the art world. Some artists, like Richter, and other art market experts condemned the act, with some experts portending the destruction of the German art market should the act come to pass. Mr. O’Donnell noted that other artists, including Georg Baselitz, went so far as to withdraw loaned works from German museums in protest of the law.

It was noted that other EU countries have export limitations on cultural valuables, including France and Italy, among others, and that Germany may be using these countries’ laws and overarching EU law as justification for its Cultural Heritage Protection Law. Indeed, the European Economic Community, one of the three founding pillars of the European Union, issued a regulation in 1993 that set uniform export controls for EU member countries. This regulation, titled “On the Export of Cultural Goods,” stated that “[t]he export of cultural goods outside the customs territory of the Community shall be subject to the presentation of an export license.” Accordingly, Germany’s Cultural Heritage Protection Law narrowed the geographic scope of the EU regulation by decreasing the acceptable export zone from the entire EU to Germany only.

A press release issued by the German Press and Information Office of the Federal Government acknowledged the EEC regulation, stating that “[s]ince 1993, EU law has required permits to export relevant cultural property outside the EU, for example to major art markets in Switzerland and the U.S.” The press release further indicates that “the German law sets more generous terms” than the aforementioned EU law.

Additionally, German authorities have characterized the law as an attempt to keep illegally-imported artifacts, especially those sold by ISIS to finance terrorist regimes, from being imported into and subsequently purchased and sold on German soil. Professor Monika Grütters, Germany’s Minister of State for Culture, stated that “[i]n view of the barbaric destruction of cultural heritage in the Middle East and many other areas of crisis and civil war, this move was long overdue, demanded by ethics and morals and by our identity as a nation of culture.”

During the Q&A session with Mr. O’Donnell, the discussion included possible loopholes within the  law, what permits for below market pricing and selling goods on the illicit black market. In addition, O’Donnell commented on the ramifications of the law vis-a-vis restitution claims that are currently pending against German institutions and individuals. Namely, would the law disallow the export of objects that qualify as “national treasure” after a restitution claimant succeeds in proving that property was looted from the family during the Nazi-era? It’s possible – if the draft German Cultural Heritage Protection Law passes this year, all works produced before 1946 (70 years before 2016) would be categorized as artifacts possibly restricted from export .

Cultural heritage issues are not exclusive to antiquities and remain a pervasive issue for contemporary artists. Different interests come into play between the governments seeking to protect and preserve their cultural identity and those who disseminate art to the international community. Although it is vitally important to protect cultural objects, governments must weigh the benefits derived from restricting the export of cultural patrimony against the curtailment of artists’ and art dealers’ rights. Namely, governments should take into account the far-reaching effects of cultural patrimony laws before restricting the flow of goods into the market to avoid the negative backlash that naturally follows such regulations.


Center for Art Law would like to thank Tess Bonoli and all the members of the Brooklyn Law School Art Law Association for their generosity and enthusiasm for the program. Many thanks to all who attended this event, with special thanks to Nicholas O’Donnell for his illuminating discussion of German cultural heritage issues.

About the Author: Elizabeth Weber is a lawyer living in Brooklyn, NY.  She graduated from the University of Florida Levin College of Law, where she received her certificate in Intellectual Property Law and served as an active member of the Art Law Society and the Journal of Technology Law and Policy. She is the Spring 2016 Postgraduate Fellow with Center for Art Law.

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Disclaimer: Reading “Wish You Were Here” a/k/a “WYWH” articles is no substitute to attending art law events, trials and programs. This and all http://www.itsartlaw.com articles are for educational purposes only. Readers should not construe or rely on any comment or statement in this article as legal advice. In case of legal questions, readers should seek a consultation with an attorney.