U.S. Seizes Old Master Lost in Nazi-Era Forced Sale (Update1). Catherine Hickley
April 21 (Bloomberg) -- U.S. law enforcement officials seized a Dutch Old Master portrait from a New York gallery and will return it today to the heirs of a Jewish art dealer who was forced to sell it before fleeing Nazi Germany in 1937. The oil-on-wood portrait, by an unknown Utrecht master and dated 1632, shows a musician holding a bagpipe; behind him, a violin hangs on the wall. It was on sale at Lawrence Steigrad Fine Arts in Manhattan. The owner, Larry Steigrad, had discovered three days before the April 2 seizure that the painting was auctioned under duress before World War II. It was the London dealer who sold him the portrait who alerted him. “I was in my warehouse in New Jersey when Philip Mould called me on my cell phone,” Steigrad said in an e-mailed response to written questions. “I was shocked and upset that we had not found out before we purchased this painting, as we both had it checked. We were both happy that I had not sold it on, causing more problems and involving private clients.” The seizure by Immigration and Customs Enforcement is the first time law-enforcement authorities have moved to recover art sold in a forced auction before World War II to the heirs of the original owners. The bagpipe player once belonged to the Dusseldorf art dealer Max Stern, one of thousands of Jews prohibited by the Nazis from practicing his profession. He received final orders to liquidate his gallery in 1937 and sold 228 paintings through Lempertz, a Cologne auction house. Legal Precedent The Max Stern Estate won a ruling at the U.S. Court of Appeals for the First Circuit that forced sales were “a de facto confiscation,” setting a legal precedent for this month’s action by customs authorities. That case centered on Franz Xaver Winterhalter’s “Girl From the Sabine Mountains,” with an estimated value of $100,000, which was in the possession of a German-American whose stepfather had bought the painting at the Lempertz auction in 1937. The restitution took place in January 2008. “With that decision, all artworks Stern sold under orders at the Lempertz sale are now considered stolen property,” Thomas Kline, an attorney at Andrews Kurth LLP in Washington who represents the Max Stern Estate, wrote in an e-mailed response to questions. The estate “hopes to receive further assistance from law enforcement authorities in the U.S. and elsewhere” in recovering the paintings, he said. The painting was spotted on Steigrad’s Web site by a former student assistant of the Holocaust Claims Processing Office in the New York State Banking Department. The HCPO told the Max Stern Estate, which in turn contacted Immigration and Customs Enforcement. Undercover Operation Posing as customers, Special Agent Bonnie Goldblatt from Immigration and Customs Enforcement and a colleague made an appointment to look at some portraits with Alexa Suskin, the director of Steigrad Fine Arts, Steigrad said. “After viewing several pictures with Alexa, they specifically asked to view the bagpiper,” Steigrad said. “At that point Alexa told me, so I came out of my office and then told them that we had just found out two days prior that it was sold under duress before World War II and needed to be returned to the rightful heirs. At this point, Agent Bonnie Goldblatt showed me her Homeland Security badge.” Steigrad Reimbursed Philip Mould Ltd., the London gallery which sold Steigrad the painting, has already reimbursed the dealer for his purchase, said Steigrad, who was offering the painting for sale at a price of 35,000 euros ($46,000). “We first learned that the picture was in the Stern sale while doing some research for a BBC program on looted art,” Bendor Grosvenor, gallery director at Philip Mould, said in an e-mailed response to written questions. “In a strange coincidence, we came across the picture on the Stern Web site on March 30. We immediately alerted the Steigrad gallery to discuss the return of the picture to the Stern estate.” Philip Mould purchased the painting at Kunsthaus Lempertz in Cologne in November 2007, the same auction house that sold Stern’s paintings 70 years earlier. The provenance listed in the Lempertz catalog was “Wallraf Collection/ Rheydt,” with no mention that the portrait once belonged to Stern. According to the Artnet price database, Philip Mould paid 5,400 euros. Asked whether the company plans to seek compensation from Lempertz for the portrait, Grosvenor said “we are still discussing the best way forward with our lawyers.” Family Firm Lempertz is managed by Henrik Hanstein, whose family has owned the auction house since 1875. He said in a telephone interview from Cologne that he disagrees with the U.S. court ruling on the Winterhalter painting that paved the way for the seizure. He said he opposes the return of art sold in the 1937 Lempertz auction to the Max Stern Estate. “German law doesn’t view the Max Stern auction as a case for restitution,” Hanstein said. “Under German law, the U.S. dealer would be the rightful owner. He bought in good faith. I don’t see it the way they see it in America.” Asked whether he would consider compensating Philip Mould for its purchase of the portrait, Hanstein said the decision would rest with the consignor. According to Lempertz’s provenance researcher Carsten Felgner, the consignor was a woman who is the last heir of the Wallrafs, a family of tobacco traders who built up a big art collection. Felgner said he had no information on when or where the family obtained the painting. “There was absolutely no sign on the back of the painting that it was sold in the Stern sale of 1937,” Felgner said by telephone. “Unfortunately, we don’t know all the paintings from that auction by heart. It is the role of the Art Loss Register to check them against its database.” Painting ‘Missed’ Louisa Loringhoven of Art Loss Register, a company that vets the provenance of paintings offered for sale by cross- referencing them against its database of missing works, said Lempertz is a long-standing client whose sale catalogs are “systematically and methodically” searched by the company. The bagpipe player slipped through the net, even though the painting had been listed as missing on the company database since 2004, she said by e-mail. “The Lempertz catalog from 2007 describes the painting as a portrait of a musician aged 57, while our database describes the painting as a portrait of a bagpipe player,” Loringhoven said. “Though the picture was searched by description and title, it was missed because of these differences.” Loringhoven said London-based Art Loss Register carries out about 300,000 searches a year. “While we endeavor to be as thorough and as accurate as possible, we may miss a handful of items,” she said. Stern’s Heirs Max Stern’s estate is managed by three universities: Concordia and McGill in Montreal and the Hebrew University in Jerusalem. When the art dealer left Germany for Paris in December 1937 he had nothing but a suitcase. He later settled in Montreal, rebuilding his business there. He died in 1987 without children, leaving the bulk of his estate to the universities. In 2002, the universities began a campaign to recover the lost art, creating the Max Stern Art Restitution Project, administered by Concordia. The bagpipe player is only the fourth of the 228 paintings he sold at Lempertz to be recovered. Two paintings from Stern’s private collection have also been returned. Clarence Epstein, the director of the Max Stern Art Restitution Project, said he hopes the action by U.S. law enforcement authorities will encourage other countries to follow suit in pursuing more aggressively the recovery of paintings sold in forced auctions. German Commitment “We remain extremely concerned about the irreverent attitude of members of the art trade in Germany,” Epstein said. “Particularly the auction houses in Germany seem to feel that the actions taken in the U.S. have no effect on them. Commitment to restitution by governments and museums is important, but we would like to see the German government extending that commitment to the art trade.” The U.S. Department of Justice and U.S. Department of Homeland Security will return the painting to the Max Stern Estate in a ceremony at 10 a.m. New York time today, which is also Holocaust Remembrance Day.