The Telegraph 14 November 2006
Last week was an extraordinary week for the art market. By the time the New York sales of Impressionist and modern art finished on Thursday afternoon, £450 million had been spent at Sotheby's and Christie's.
That's almost twice as much as the amount generated in the equivalent series of sales this spring, and far in excess even of the last pinnacle of the art market in 1989-90.
The record level was all the more remarkable because experts have been bemoaning the fact that the supply of great modern and Impressionist masterpieces was all but drying up.
As a result, this once dominant area of the market was being overtaken by its flashier younger sibling, the contemporary art market.
But they reckoned without one word: "restitution". At Christie's on Wednesday night, nearly half of its record-breaking £259 million auction was accounted for by the sale of restitution art.
A restituted work of art is one that has been returned to its rightful owners or their heirs after it has been proven that it was illegally taken away from them. In the art market, this applies mainly to works taken from Jewish collections in the Nazi era.
Awareness of Nazi-looted art as both a danger zone and a potential goldmine surfaced about 10 years ago when Sotheby's and Christie's set up specialised departments, headed by trained lawyers, dedicated to provenance research and restitution.
Provenance research helped to ensure that the auction houses did not knowingly sell looted art.
Restitution involved assisting the heirs of stolen property to recover it, estimating its value, and often acting as an intermediary between two parties in an ownership dispute.
It has been a gradual process, but, since the international legal framework has been in place for heirs to reclaim art owned by their forebears, more and more art has been returned.
And, as some of the best of these works are too valuable for most individuals to insure, they are increasingly finding their way on to the art market.
Sotheby's restitution department is headed by Lucian Simmons, who says that his company has sold more than £50 million of restituted art in the past five years.
A landscape by Egon Schiele sold in June 2003 for £12.6 million. In January 2005, two 18th-century bronze busts by Franz Xaver Messerschmidt brought a total of £4.4 million.
A painting by the Spanish Impressionist Joaquín Sorolla sold for £2.15 million last November, and a painting by Van Gogh for £5.3 million.
Simmons estimates that there are still more than 100,000 unclaimed works of art looted by the Nazis between 1933 and 1945, worth in total between £5.7 billion and £17 billion.
The potential for the art market was rammed home at Christie's last week when four paintings by Gustav Klimt, restituted to the heirs of Adele and Ferdinand Bloch-Bauer, sold for just over £100 million.
These prices were undoubtedly influenced by the private sale some months earlier by Christie's of the best of the Bloch-Bauer Klimts, a portrait of Adele, for a reported £70 million to cosmetics heir Ronald Lauder.
Lauder bought it for his Neue Galerie, a private museum specialising in modern German and Austrian art in New York.
Lauder was also a key figure in the Christie's sale. Not only did his Neue Galerie sell three works by Egon Schiele to raise more than £20 million towards the purchase of the Klimt, but it bought a street scene by the expressionist painter Ernst Ludwig Kirchner for a record £20 million.
This painting had recently been restituted to Anita Halpin, the British Communist Party chairman and granddaughter of Alfred and Tekla Hess, who, it was claimed, had sold their art collection under duress.
This sale, however, was the first to raise criticism of the way in which the restitution process may have become over-commercialised. Martin Roth, director of the Dresden State Art Collections, told Der Spiegel this summer that "collectors and competing museums are deliberately seeking out stolen art.
"Sometimes we are dealing with a business in which many secondary players, lawyers, art dealers, are trying to get their piece of the pie. These are often the driving forces and are driving up prices."
Professor Ludwig von Pufendorf, chairman of the Friends of the Berliner Bruecke Museum, which previously owned the Kirchner painting, said recently on German radio that "Christie's is commercialising an important aspect of our history".
He believes that too many deals are being made out of the Holocaust, and that lawyers and auction houses are actively soliciting heirs of Holocaust victims to make claims and then sell the art.
Christie's answered the criticism in a statement last week, saying: "When invited, Christie's will bring its restitution expertise to bear by assisting families to locate unrestituted works or to act as brokers in negotiations. We do not pro-actively solicit heirs of Holocaust victims to make claims and then sell the art."
Nevertheless, the rewards for tracing looted art and negotiating a sale have become clear enough.
Maria Altmann, the heir to the Bloch-Bauers, told Austrian reporters that Randol Schoenberg, the Los Angeles lawyer who conducted a seven-year campaign for the return of all five Klimts from the Austrian National Gallery, would receive 40 per cent of the proceeds from both last week's sale and the private Lauder sale (£170 million in total).
Court documents indicate that Schoenberg will share his earnings with Stefane Gulner, the Viennese lawyer who assisted him.
Sotheby's and Christie's are so keen to compete for the works that they will waive the normal sellers' commission charge and offer guaranteed sums regardless of whether the works sell or not. All the important restituted paintings sold by Christie's last Wednesday were under guarantee.
Fortunately for Christie's, they sold well above expectations in a boom market that is hungry for the very best quality art that can be found. http://www.telegraph.co.uk/arts/main.jhtml?xml=/arts/2006/11/14/basales.xml