The return of Nazi loot

MoneyWeek 14 January 2010
By Simon Wilson

A deal between Andrew Lloyd Webber's Art Foundation and the heir of a Jewish banker has put the issue of art stolen in the Nazi period back in the spotlight. Simon Wilson reports.  What happened in the Lloyd Webber case?

The Andrew Lloyd Webber Art Foundation reached a settlement this week with the heirs of Paul von Mendelssohn-Bartholdy. The wealthy Jewish banker amassed a great art collection in pre-war Germany, including Picasso's The Absinthe Drinker. Lloyd Webber's Foundation acquired the Blue Period masterpiece for £18m in 1995. But it was forced to withdraw it from auction in 2006 when the heirs launched a US legal action claiming the painting had been sold under duress in Berlin in 1934. Under a confidential settlement with the Berkshire-based foundation, the heirs have agreed to drop all claim to the painting. Although details of the agreement, reached this month, are secret, the family also reached cash settlements last year with the MoMA and Guggenheim in New York over two other Picassos.

What makes this case special?

Unlike many others it is not just a straightforward case of looted art being recovered. No one claimed the Nazis had seized the Picassos from Mendelssohn-Batholdy, a nephew of the composer Felix Mendelssohn. Rather, he was forced to sell assets due to more subtle economic pressure from the Nazi Party. Evidence produced in the related New York case showed how the art collector, who owned Germany's largest private bank, saw his earnings collapse from 1933. In the following two years, as the Nazis Aryanised the banking industry, Mendelssohn-Bartholdy was obliged to sell his paintings, never having previously sold any. As Christoph Bazil, head of Austria's art restitution committee, puts it: "The Nazis were very inventive, and thought up lots of ways to expropriate someone of their belongings."

How many artworks did they grab?

A widely cited estimate suggests that between 1933 and 1945 the Nazis seized some 600,000 important works in Germany and occupied Europe, of which as many as 100,000 are still missing. Some were looted during the war; some confiscated under Aryanisation orders during the 1930s, and some sold under duress at knock-down prices, typically in order for Jews to finance an escape. Perhaps the most famous such case is that of Amsterdam's leading art dealer, Jacques Goudstikker. Tragically, he died in an accident onboard the ship taking him to safety as the Germans occupied the Netherlands. But a little black book found on his body provided a detailed inventory of all his abandoned stock. That helped his descendants win a landmark case against the Dutch government in 2006. More than 200 Old Masters were returned to his heirs.

Why such long delays?

Many big restitution claims were settled in the post-war period, as the Allies attempted to hand back some of the estimated five million objects stored by the Nazis in castles and other depots. By 1950, the Americans and British had restored some 2.5 million cultural artefacts to their rightful owners, of which nearly 500,000 were paintings, drawings and sculptures. But in the chaos of post-war Europe, hundreds of thousands of looted artworks went missing, sold on to private owners or galleries who either suspect no wrongdoing, or who didn't care to check too closely. At the same time, for many Jewish survivors of the Nazi genocide, it became taboo even to mention the Holocaust, and distasteful to discuss restitution of property.

What changed?

The passing of time has made it easier for the descendants of murdered Jews to confront their losses and seek compensation. The end of the Cold War also made it easier to track down and prove the provenance of missing work. In the mid-1990s Swiss banks were compelled to repay $5bn stolen from Jews, giving fresh impetus to restitution claims. In 1998 an international conference in Washington agreed new guidelines that put Holocaust victims' rights above those of current owners.

Has this helped the art market?

Yes, it certainly has. A British woman, Tess Halpin, sold Ernst Kirchner's Expressionist masterpiece, Berliner Strassenszene (Berlin Street Scene), for $38m after regaining it on behalf of her late grandparents from a Berlin museum. And Christie's sold four works by Gustav Klimt for £100m for the heirs of Adele Bloch-Bauer, a close friend of the artist, which were recovered from the Austrian government. Indeed, this type of business accounted for $90m of sales at Sotheby's last year, according to the firm. Auctioneers value the 100,000 works still missing or disputed at up to £17bn.

Is this just about paintings?

No. In the first decades of the 20th century, European Jews were among the most enthusiastic collectors of all the modern and contemporary artists, from Van Gogh and Cezanne to Kandinsky and Schiele. But not all the looted artworks are modern, nor even paintings. In Britain, new laws came into force this month under the Holocaust (Return of Cultural Objects) Act. The new Act allows state institutions to hand back artefacts stolen during the 1933-1945 period (there are exceptions, such as the Elgin/Parthenon Marbles). The first piece to be handed back looks likely to be a 12th-century liturgical book, the Benvenuto Missal, rather than a painting. It was stolen from a Benedictine monastery in 1943, bought in Naples by a British intelligence office in 1944, and subsequently acquired by the British Museum.
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