Deletion of Gr├╝nbaum Works from Lost Art Database Shows Again How German Government Has Lost Its Way on Nazi-Looted Art

Art Law Report 27 August 2018
By Nicholas O'Donnell

The New York Times reported yesterday that the German Lost Art Foundation had removed several paintings once owned by the Viennese cabaret actor Fritz Grünbaum from the Lost Art database.  While the history of these objects is hotly contested, it was a particularly strange choice given that Grünbaum’s heirs just won a judgment earlier this year that the works by Schiele must be returned to them—by reason of Nazi duress.  For a database that has never been suggested as an adjudication of rights but rather as a repository of notice to the world of possible title issues, it was a perplexing choice.  Against the backdrop of the party that the German government and the foundation are throwing themselves in November for which few outsiders have been able to register, the explanation appears much less benign particularly against the backdrop of the government’s historical revisionism in U.S. federal court litigation.

Fritz Grünbaum is an important figure in the history of legal disputes over Nazi-looted art.  Grünbaum was imprisoned in Dachau, where he signed an obviously coerced “power of attorney” appointing his wife as manager of his affairs.  Around the same time, Grünbaum filed the required property declaration listing all of his assets.  The declaration included the list compiled by an appraiser, Kieslinger.  A drawing by Egon Schiele (Seated Woman With Bent Left Leg (Torso)) was the subject of a multi-year, multi-appeal case in which collector David Bakalar ultimately prevailed.  Among the many disputes in the Bakalar case was whether that Schiele drawing (or those discussed below) were, in fact, among Grünbaum’s assets listed on the Kieslinger appraisal when they were confiscated.  The work surfaced in Switzerland after the war in the Kornfeld gallery (later a favorite of Cornelius Gurlitt, no less), consigned by Grünbaum’s sister-in-law, Mathilde Lukacs. 

Ultimately the Grünbaum heirs lost on the grounds that they had delayed too long in bringing their claim under the equitable doctrine of “laches,” meaning more or less sitting on one’s rights.  There was also a subsidiary finding, however, that the Schiele drawing was not, in fact, stolen (for more details, the case is the subject of a chapter in my book A Tragic Fate—Law and Ethics in the Battle Over Nazi-Looted Art). 

More recently, the Grünbaum heirs filed suit against London dealer Richard Nagy for the return of two Schiele works that had also been consigned by Lukacs to Kornfeld— Woman in a Black Pinafore (1911) and Woman Hiding her Face (1912).  Nagy immediately moved to dismiss on the grounds of res judicata—that the question of title in the Lukacs-consigned works had already been decided against the Grünbaum heirs and they could not litigate the question again.  The New York Supreme Court (the trial court) disagreed, and the decision was affirmed by the Appellate Division, allowing the case to go forward.  Earlier this year, Judge Charles E. Ramos issued a judgment against Nagy that ordered the immediate return of the works.  Judge Ramos expressed no ambiguity in his conclusions, noting “the gut-wrenching process by which Mr. Gr[ü]nbaum’s property was looted.”  Nagy has appealed that decision.

Enter the Lost Art Foundation (Deutsches Zentrum für Kulturgutverluste).  For several years before the 2013 Gurlitt bombshell, the so-called Koordinierungsstelle für Kulturgutverluste (coordination office) in Magdeburg operated the “Lost Art” database.  The effect of the database was simply one of notice, if a claimant notified the office of a Nazi-looted claim, the details of the claim such as they were known would be posted.  Buyers, sellers, auction houses, and others could consult the database (along with others) as part of their diligence process.  It was, and is, an important resource but never one that claimed to resolve title disputes, only put the market on notice.  In this fashion it functioned like a UCC filing for personal property or a lis pendens for real property; once on notice, it is up to the recipient to decide what to do.

The Foundation was created in 2015 as the “solution” to the Gurlitt saga, which neither Germany nor Bavaria have even begun to address (and which the Foundation has not solved).  Hundreds of works impounded on suspicion of Nazi looting still languish in government possession.  The government has underfunded and undermined the genuine experts it appointed to the so-called “Task Force” such that no conclusions reached hereafter by the government can or should be taken seriously—all the more tragic since many of the works undoubtedly were not looted.  The Foundation has, to be fair, provided increased funding for provenance research to Germany museums.  It now operates the Lost Art database as well.  All too often when a thorough research project funded by the Foundation notes gaps in the provenance of a painting, however, German museums throw up their hands and effectively say “See?  Who even knows?” and that itself becomes the rationale to keep the disputed work or refuse even to consider a “fair and just” compromise.  As with the Gurlitt Task Force, legitimate research funded by the Foundation becomes an excuse to do nothing without absolute certainty that is seldom possible.

There is simply no debate that the two Schieles at issue in the Nagy lawsuit are at the very least the subject of a claim.  More accurate is to say that they have been adjudicated as looted art.  Litigants are entirely free to express their disagreement with the outcome of a case—we certainly do it all the time—but the judgment of a court in a title dispute is the answer about who has title, which may yet change on appeal.

All this makes it inexplicable that the Lost Art Foundation has removed sixty three works once in Grünbaum’s collection from the database, including the two found this year to have been looted.  The Foundation’s guidelines that “the reporting party must plausibly demonstrate that an individual object or a collection was confiscated as a result of Nazi persecution, or was removed or lost during the Second World War, or that such a suspicion cannot be ruled out” have by definition been satisfied—a New York judge agreed with them.  By the same token removing Bakalar’s drawing would be defensible; right or wrong, the heirs had their day in court and Bakalar’s claim to title prevailed and the question of that work has been adjudicated.  But the application must be consistent.

This begs the question, therefore, of what is really going on.  There, some context is informative.  The Foundation is the German federal government’s excuse for doing nothing or actively working against the cause of justice.  In our case alone for the restitution of the Guelph Treasure, the German government has filed papers in federal court denying that the economic persecution of Jews was part of the Holocaust or constitutes a crime against international law.  Think about that.  A conference has been scheduled for late November (overlapping with Thanksgiving weekend, in a deliberate snub to American participants) to mark the 20th anniversary of the Washington Conference that “sold out” immediately, leaving few if any outside experts able to attend.  It is a pity, because many of the presenters have important perspectives worth hearing.  Once again, this is either incompetence or malevolence; the Washington Conference colloquium that I attended at the National Gallery in London a year ago was extremely well attended, surely there is a conference hall in Berlin large enough to host what would presumably be a similar number of attendees.  Failing to arrange for it is hard to understand.

Ultimately the real pity in this story is that it undermines the value of an important database.  And that serves no one at all.
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