In the chaotic days ending World War II, the Allies quickly realized they had collected more than a million looted art objects from across the Third Reich. Some were found in rubble, others saved by the now legendary Monuments Men from a network of Nazi depots in far-flung monasteries and castles, including a huge trove in booby-trapped salt mines in rural Austria.

With a mass of art and Judaica in hand, the Allied forces converted two Nazi administration buildings into collecting points in Munich, dubbed Gallery One and Gallery Two. It was hoped the art would be expeditiously documented and restored to institutions or individuals with passable provenance records.

Makeshift catalog systems were created by the few staff members who understood the thorough research needed for restitution. Works were returned as early as fall 1945.

Despite the best of intentions, resources were tight and mistakes made. Owners were dead and their scattered heirs impossible to find. The surviving heirs, struggling to forge a new life, were uninformed of their property rights and didn’t seek their family treasures.

In Germany, by August 1948, the Allies relinquished control of the art to the German Trustee Administration for Cultural Property and restitution efforts continued there. Eventually most art was returned, aside from 2,300 works and some 10,000 coins and books, which are still today under German government custodial protection.

Many of the 2,300 works are on long-term loan to museums, government buildings and institutions, which are ordered to continue the provenance research, and since the late 1990s, numerous claims have been made against them by would-be heirs with varied results.

A painting of Otto Dix 'Selbstportrait Rauchend' ('Selfportrait Smoking') is projected on a screen during a news conference in Augsburg, southern Germany, Tuesday, Nov. 5, 2013, on the art found in Munich. (photo credit: AP/Kerstin Joensson)

A painting of Otto Dix ‘Selbstportrait Rauchend’ (‘Selfportrait Smoking’) is projected on a screen during a news conference in Augsburg, southern Germany, Tuesday, Nov. 5, 2013, on the art found in Munich. (photo credit: AP/Kerstin Joensson)

While modern-day Germany is currently drawing criticism from the international community over a lack of transparency and expediency following the shocking November publication of a controversial Munich art collection case (more on that later), legislators in Bavaria are attempting to amend statute of limitations laws, a move that just may open up art restitution claims against private individuals — an area relatively untouched by heirs.

Last month Bavarian Justice Minister Winifred Bausback told leading German newspaper Der Spiegel his team was drafting legislation that would address “bad faith acquisitions” — namely forced sales or Nazi-tainted art — and prevent invoking the statute of limitations for these civil law claims.

This week the German Culture Ministry confirmed the pending legislation and, raising the stakes, told The Times of Israel, “The federal government is going to look into the legislative initiative.”

As to whether the notorious Munich collection would be open to claims under this new legislation, the ministry cryptically wrote, ”The German constitution will only allow repercussions of such a law within narrow, strict limits on those cases whose statute of limitations has already expired.”

Hidden for 70 years and sold piecemeal to cover 81-year-old “owner” Cornelius Gurlitt’s ballooning medical bills, the collections is surrounded by legal questions that involve the expiration of the statute of limitations — and just whose property is it anyway?

The legal ramifications are so complicated that, as German solicitor Peter Bert laughs, “If you had come up with this case as an exam question, people would say it’s a professor’s imagination gone wild.”

The Schwabing collection

In post-war Germany, one lucky recipient of some 140 “restituted” works from the hands of the Americans and Germans was art dealer/historian Hildebrand Gurlitt.

A December 23 in-depth profile of Gurlitt in Der Spiegel portrays the dealer as a crafty swindler who double-dealt the Nazis and the Allies while carefully hoarding and protecting his own growing, valuable art collection.

After being fired by the SS from his museum job in Nazi Germany, Gurlitt traded in art, mainly in Paris from 1941 to 1945, as one of four agents tasked by the Commission for the Exploitation of Degenerate Art with selling the modern art deemed un-nationalistic by the artistic Fuehrer. Gurlitt’s mission: to liquidate funds through the modern art’s sale and purchase masterpieces for Hermann Goering’s personal collection and Hitler’s planned Linz Fuehrermuseum.

Skimming from his employers and performing unauthorized transactions, Gurlitt amassed more than 1,500 works for his private collection. Many, if not all, were purchased in coerced sales or confiscated from Jewish houses, or from artists and collectors of degenerate art.

Several SS officers bolstered their art collections through the designated Nazi art agents. (photo credit: YouTube screenshot)

Several SS officers bolstered their art collections through the designated Nazi art agents. (photo credit: YouTube screenshot)

After the 1945 firebombing of his family home in Dresden, Gurlitt moved to an Aschbach castle of one Baron Gerhard von Pölnitz with wife Helene and children Cornelius and Benita. Also in residence at the manor was notorious Nazi art dealer Karl Haberstock, considered the most important of the Nazi art agents.

The lord of the manor, Baron Pölnitz, according to the Der Spiegel report, had gone beyond his duties as an SS officer in Paris and aided the two art dealers in their work. By war’s end his house had turned into a refuge for works from nearby museums and private collections, including that of the two art dealers – and for the dealers themselves.

When the Monuments Men arrived at the Aschbach castle in May 1945, they found an “enormous warehouse,” writes Der Spiegel.

“A large room on the upper floor with 34 boxes, two packages containing carpets, eight packages of books… one room on the ground floor containing an additional 13 boxes owned by Mr. Gurlitt,” a member of the forces noted in mid-May.

The Monuments Men documented then that they believed Gurlitt to be “an art collector from Hamburg with connections within high-level Nazi circles. He acted on behalf of other Nazi officials and made many trips to France, from where he brought home art collections. There is reason to believe that these private art collections consist of looted art from other countries.”

‘There is reason to believe that these private art collections consist of looted art from other countries’

Somehow, however, after three years of house arrest in Aschbach, Gurlitt convinced the authorities both of his persecution under the Nazis for his Jewish heritage (his paternal grandmother was Jewish, and as a “mongrel” he would have faced Aryan race laws), and of the destruction of the majority of his art collection in the February 1945 firebombing in Dresden.

In January 1948 Gurlitt moved the family to Dusseldorf, where he became the director of a museum, and in 1950 the Allies returned the confiscated 140 works. In secret, Gurlitt reunited them with other parts of his collection he had hidden in an old water mill.

Gurlitt recommenced his art dealings, and in 1956, the year he would die in a car accident, he even showed paintings in New York. For the exhibit’s catalog, he wrote a bizarrely revisionist (unpublished) biography of his wartime experiences, depicting himself as heroic in his “dangerous balancing act.”

Today, with the February 2012 discovery of 1,604 items during a tax investigation by police in his reclusive son Cornelius’s Munich apartment, Gurlitt’s “destroyed” private collection is spurring an international push for clear practices in art restitution in Germany.

The collection, reportedly worth some $1.4 billion, was seized by Bavarian officials and held for 18 months until the German magazine Focus broke the story in November. There are reports of provenance documents also found in the apartment.

Harshly criticized for negligence and lack of transparency in this case, the German government is setting up a task force, including two representatives from the Jewish Claims Conference and one from Israel, which will reportedly begin work in January. German provenance researchers already on the case are working toward cataloging and publicizing the problematic works online. Currently there are entries for some 442 items, including about 50 oil paintings.

In some respects, the Munich scandal is the proverbial perfect storm, sweeping the issue of Holocaust restitution back to international headlines.

A detail from the painting  'Sitzende Frau' ('Sitting Woman'), by Henri Matisse, which was among the more than 1,400 art works seized by German authorities in an apartment in Munich in February 2012. (photo credit: AP/Staatsanwaltschaft Augsburg)

A detail from the painting ‘Sitzende Frau’ (‘Sitting Woman’), by Henri Matisse, which was among the more than 1,400 art works seized by German authorities in an apartment in Munich in February 2012. (photo credit: AP/Staatsanwaltschaft Augsburg)

“What happened here is a case where everything went wrong: The items are located in a jurisdiction that had no familiarity with these types of cases, and it is treating the matter as a criminal investigation, tax evasion, without paying attention to the overriding matter of Holocaust looted art,” says lawyer Chris Marinello, from Art Recovery International in London.

Marinello represents the heirs of art dealer Paul Rosenberg, who worked with masters including Picasso, Braque and Matisse before Nazi persecution liquidated his collection and caused him to flee to the US. The family has a claim with the German authorities for the Matisse painting that has become the poster child of the ongoing investigation, “La Femme assise.”

New law proposal

It’s deja vu all over again, writes German lawyer Peter Bert, quoting baseball legend Yogi Berra on his blog, Dispute Resolution in Germany. A trained mediator, Bert spent time at Harvard as a researcher and has been a solicitor in Frankfurt since 1996. In 2003 he became licensed in England and Wales, when he joined Taylor Wessing’s Frankfurt office as partner.

Bert explains that in 2001-2, a similar push was made for new legislation regarding the statute of limitations in Holocaust property restitution cases during a period of sweeping legislative reforms passed by Germany’s Upper Chamber, a section of parliament comparable to the US Senate that consists of representatives from each of the country’s states.

“There was a strong feeling then that we ought to carve out in some way, shape or form restitution claims, be they Holocaust or Communist. The legislation would have been driven primarily by Nazi-looted art, but could have covered Soviet takings as well,” says Bert in a phone interview.

“I think there were ten years of silence in which no one paid attention to the issue,” he adds.

The reform package had covered other more mundane topics such as consumer protection and it was felt important enough to pass, even without inclusion of the statute of limitations reform. However, Bert says, the Upper Chamber in 2002 directed the federal government to come back with proposals for Holocaust properties, which, according to Bert, did not happen. (Austria, however, did successfully pass restitution legislation in 2002.)

Bert offers two explanations for the silence: politically there was no motivation as this was a minority topic with no practical relevance to voters at the time. And, as noted by the Culture Ministry this week, there is a complex legal issue surrounding to what extent the constitution can be changed retroactively.

A victorious German Chancellor Angela Merkel smiles as she addresses supporters at the party headquarters in Berlin, Germany, Sunday, Sept. 22, 2013. (photo credit: AP Photo/Michael Sohn)

A victorious German Chancellor Angela Merkel smiles as she addresses supporters at the party headquarters in Berlin, Germany, Sunday, Sept. 22, 2013. (photo credit: AP Photo/Michael Sohn)

A narrow reading of the current statute of limitations law would make the expiration date on Holocaust art restitution between 1975 and 1979, 30 years after most works were assigned owners. After removing the constraints of the 30-year statute of limitation, the crucial points in the new legislation in Bert’s opinion will be the legal definitions of bona fide, “acting without the intention of defrauding,” and “tainted.”

Speculating on the chances that the legislation will passed on a federal level, Bert assumes it will; otherwise Bausback, the justice minister and a member of the Bavarian wing of Chancellor Angela Merkel’s Christian Democratic Union party, would not have proposed it.

Merkel was elected in September to a historic third term and sworn in last week after reaching a deal with the Social Democrats to form what is being called a “grand coalition.”

“If his party throws its support behind it, there would be support on a federal level,” says Bert, as soon as within the next few months. “If they do their homework and line up support, they could do it in six weeks.”

“There is a good chance that the mistake that was made in 2001 gets rectified now,” he adds.

What’s on the books today

The new legislation is mainly for civil cases against individuals. Institutions have already been addressed, first with the basic early post-war legislation passed in the 1950s, and then in the “morally binding” charters with Germany’s 1999 signing of the Joint Declaration by the Federal Government based on the 1998 Washington Conference Principles.

The issue of Holocaust reparations and restitution was a maelstrom in the mid- to late-1990s in the wake of several high-profile settlements with banks, insurance companies and other companies accused of using slave labor. The United States took the lead on drafting what are essentially rules of procedure for the international community to use in dealing with Nazi-tainted properties, creating the Washington Principles. In 2001, Germany drafted guidelines for institutions to use in provenance checks.

To date, the only country that has enacted legislation based on the Washington Principles is Austria, says Dr. Wesley Fisher, the Claims Conference director of research and an expert on looted art. The Claims Conference has been the Jewish World’s legal representation in Germany since 1951. As a fledgling country focused on the present and future of the state, Israel in 1952 gave the Claims Conference authority in reparations negotiations with Germany.

“After WWII there were attempts at dealing with this, but the most important matter was life and having enough to live on,” says Fisher, citing the Claims Conference’s successful negotiations for reparations.

Restitution is another matter entirely: worldwide, restitution has been successful for about 20% of property owned by Jews prior to WWII.

Nazis holding looted art (photo credit: YouTube screenshot)

Nazis holding looted art (photo credit: YouTube screenshot)

Ahead of the 2009 Prague Conference on Holocaust Era Assets, the Claims Conference wrote an overview of the international community, and Germany, along with three others, was one of the top-ranked countries for restitution efforts. ”It’s not as if the Germans haven’t done anything,” he says.

“In Germany the practice has been to act as if the Washington Principles are part of the law,” says Fisher.

He notes, though, that art is more complex than other property claims. “You’re talking about objects which are unique and need to be found. They are movable and can be anywhere in the world. They’re not easily dealt with in monetary compensation, unlike bank accounts, and there’s also a specific emotional attachment to families and communities.”

“My impression is that as the survivors are passing, the objects are becoming even more important,” says Fisher.

Fisher, who has worked in the field for decades and was a founding director of research at the US Holocaust Museum, sees what he calls “back-pedaling” among institutions that once adhered to the Washington Principles but now are using loophole defenses in retaining their questionable art.

Prof. Julius Schoeps of the Moses Mendelssohn center in Potsdam agrees, saying, “Politicians say it’s necessary to give the art back; it’s the museums that don’t want to.”

The historian has been fighting internationally, along with 29 other descendents of philosopher Moses Mendelssohn and composer Felix Mendelssohn-Bartholdy, for the collection of Berlin banker Paul von Mendelssohn-Bartholdy. There are several of these disputed works on the walls of German museums and institutions.

‘Most of the [German] people say “Go to hell!” when they are asked for restitution’

Schoep’s proposal, which he’s been touting on television and newspapers, is for Germany to legislate for Holocaust restitution, which has been an uphill battle.

“Most of the [German] people say ‘Go to hell!’ when they are asked for restitution,” says Schoeps.

“The problem is we are discussing such problems now, but the problems are 70 years old,” says Schoeps. The academic says there is a feeling of “exhaustion” among the German people in the continual revisiting of Holocaust-related subjects.

“The people of Germany are tired of dealing with the Nazi past; they say it must come to an end now. But this is the property of people who were murdered or fled Germany. It is necessary,” says Schoeps.

The Claims Conference’s Fisher is hopeful the Munich collection will serve as “a kind of wake-up call” and keep things on track toward identification and restitution.

“You’ll notice in some statements by [President of the Jewish Congress Ronald] Lauder and [Special Advisor to the US Secretary on Holocaust Issues Stuart] Eizenstat, two things come to fore: The need for Germany to create some sort of government commission that deals with this as a whole, and there is a discussion about the need to do something about the statute of limitations, in Germany, but also in the US,” says Fisher.

The greatest theft in history

Though not the sweeping commission envisioned by some, Germany is setting up a task force of international provenance researchers in the wake of the Munich scandal that will begin working next month. The Claims Conference will have representation and, in what is seen by some as a diplomatic victory, so will Israel.

“We are more concerned that the procedures by that task force be improved as a political matter, than by the politics of it,” says Fisher. He hopes the research process will be transparent for all works of art, not just those currently deemed suspect, and that the art be open to claimants. There should be clear reports published periodically and a non-bureaucratic process where claimants can ask for their artworks back, including an appeals process.

Earlier this month the Israel government through Project HEART, an Israeli governmental/JAFI (Jewish Agency for Israel) project to locate Holocaust heirs and assist in obtaining restitution founded in 2011, proposed two candidates for the Munich task force: an art expert from Yad Vashem and a restitution and art expert from the Israel Museum.

Getting an Israeli on the task force is an important milestone, says Project HEART head Bobby Brown.

“The Holocaust was not only the greatest murder in history, but also the greatest robbery. More art was stolen during the Holocaust than existed in the US at the same time,” says Brown.

An unidentified Holocaust survivor sits holding his cane in the Yad Vashem Holocaust Memorial complex in Jerusalem (photo credit: Pierre Terdjman/Flash90)

An unidentified Holocaust survivor sits holding his cane in the Yad Vashem Holocaust Memorial complex in Jerusalem (photo credit: Pierre Terdjman/Flash90)

“We are of the opinion that Holocaust survivors and their heirs have a legitimate right to ask for property at any time,” says Brown.

The idea of a statute of limitations is preposterous, says Brown, especially in new finds such as the Munich case. Often new information becomes available, and during the legal statute of limitations, the survivors weren’t physically, psychologically, or even morally prepared to take what was rightfully theirs.

“How could someone make a claim if they were just found?” he asks. “How much would you spend on finding art that no one knows exists?”

Project HEART, under the auspices of the Ministry of Senior Citizens and Minister Uri Orbach in cooperation with JAFI, approaches foriegn governments as a representative of the government of Israel and asks for legislative changes, rather than working the existing legal systems as private lawyers do. Its mandate is to represent the citizens of Israel as well as any Jews worldwide who approach it.

With an annual budget of $2.5 million, there are no fees involved and all potential monies go directly to survivors or their heirs, says Brown.

“Too many organizations have done good deeds or less than good deeds on the penny of the Holocaust survivors. Our position is give back to those who own the thing the maximum. We get nothing but satisfaction,” says Brown.

A race against time

Not all lawyers are making a buck on the backs of survivors. American lawyer Chris Marinello, now based in London, has successfully negotiated many small Holocaust restitution claims pro bono. Today, however, he and his firm are representing one of the most important heirs in the Holocaust art restitution world, the family of art dealer Paul Rosenberg.

Since the publication of the Munich collection, he has been in direct contact with the task force of what he calls eminent art historians and leaders in the restitution field. And, like other lawyers of claimants, he has faced stonewalling and been told to have patience.

“My client is 94 years old and she doesn’t want to be told to have patience,” says Marinello.

Unlike most, Paul Rosenberg fled the Nazi regime with his archives intact. “As soon as the image [of Matisse's 'La Femme assise'] was released we were able to produce documentation,” says Marinello, rattling off a laundry list of documents. ”We have a receipt, entry cards when the Nazis entered to loot, we know which Nazi-collaborating dealers handled it, which collecting points. We have affidavits from the family continuing their search, documenting the work is missing… All of which were produced to the task force.”

Marinello notes the Gurlitt case is complicated by the criminal tax investigation, and wonders, as a worst-case scenario, even if the special art task force agrees the Matisse was looted, will the heir be required to file a civil case against Gurlitt?

“Many people who would like to see this case go away are dragging their feet,” says Marinello.

A painting of Marc Chagall is projected on a screen during a news conference in Augsburg, southern Germany, Tuesday, Nov. 5, 2013, on the art found in Munich. (photo credit: AP/Kerstin Joensson)

A painting of Marc Chagall is projected on a screen during a news conference in Augsburg, southern Germany, Tuesday, Nov. 5, 2013, on the art found in Munich. (photo credit: AP/Kerstin Joensson)

This wouldn’t be the first time. In researching a book about the mathematics of compensation, retired Israeli journalist Raul Teitelbaum, a Holocaust survivor, says he found two-thirds of survivors died before their compensation cases were resolved. In “The Biological Solution,” Teitelbaum writes that less than a third of survivors received any recompense at all.

Additionally, for many survivors interested in art restitution who may not be the heirs to famous works by Matisse, says Teitelbaum, “Sometimes finding the art costs more than the art is worth.”

Over the past 70 years, he has found that compensation from Germany is a “long procedure of stopgaps and patches” that depends on political incentives and international pressure. In the 1950s, Germany needed the legitimacy of the international community and the Jews. “Today, we need Germany,” says Teitelbaum.

And Germany needs to lead what Project HEART’s Brown calls a “final push.” “We feel the country has a a special obligation for restitution that needs to be put on turbo for the next 15 or 20 years that the survivors will still be alive,” he says.

No process has been or will be perfect justice, says Brown. “We are working toward the most justice that may be achieved at this time. If we can get better justice in five years, there’s a heavy price to pay for that,” he says.

But in a Germany that is holding all the cards, lawyers are finding it increasingly difficult to get what they feel is a fair hearing.

Juan Carlos Emden’s mother died in April at 99 before the German federal Finance Ministry decided after nine years what it would do with the two works by 18th-century painter Bernardo Bellotto the family is claiming were lost in forced sales by her father Max Emden.

“We were hoping to have this case settled for her but justice has been lost for her,” says well-known New York-based restitution lawyer Mel Urbach, the son of a Holocaust survivor.

People look at a display of looted art on a video screen as they attend the Provenance Research Training Program to the Nazi-looted art, in Magdeburg, central Germany, Thursday, June 14, 2012. (photo: AP /Jens Meyer)

People look at a display of looted art on a video screen as they attend the Provenance Research Training Program to the Nazi-looted art, in Magdeburg, central Germany, Thursday, June 14, 2012. (photo: AP /Jens Meyer)

Max Emden fled Germany with his art collection in 1933 when Hitler came to power. The family was historically powerful and wealthy, with land and property in several countries, including Switzerland where Emden sought refuge.

“When the Nazis came to power he made a decision to stay in Switzerland, but never set up shop there. His business was left behind in Hamburg. The Nazis financially ruined him, forcing him to sell his stores and real estate. By 1937 he had run out of money and started selling his art collection,” says Juan Carlos Emden via conference call from Chile.

The Bellotto paintings, it would appear, were sold below market value in 1937-8 via the German-Jewish art dealer Annie Caspari, from whom Emden had purchased them in 1928-9.

In 1937, says Juan Carlos Emden’s German lawyer Markus Stoetzel, Caspari learnt of Emden’s financial troubles and that he was desperately trying to sell the paintings at a fair price.

But Caspari was also in trouble, only allowed to work in a limited extent after 1933, and had been enlisted by the notorious art agent Haberstock to aid him in purchasing works from near destitute Jews for Hitler’s planned Linz museum.

“We have the complete documentary of her correspondence with Emden and Haberstock,” says Stoetzel. Caspari’s work permit was withdrawn in 1943 and she was deported and murdered.

The two Bellotto paintings weren’t claimed by an heir post-WWII — Max Emden’s only son Hans, Juan Carlos’s father, had fled to South America. They became part of the 2,300 custodial works kept by the German government and loaned to institutions.

Worth an estimated $2.5 million each, the Associated Press reports Bellotto’s ”The Zwinger Moat in Dresden” is currently on exhibit at the Museum for Military History and a panorama of Vienna is in storage at the Kunstpalast museum in Duesseldorf.

The German Finance Ministry wrote The Times of Israel last week that the Emden case, like several others, is not covered by the Washington Principles because he managed to take his art with him and sales were not conducted in Germany — as was already decided in a case in the United States.

‘Is Germany really willing to keep such an unhealthy, unholy collection?’

“The National Gallery of Art in Washington has refused the restitution of the paintings ‘Saint Mary Salome and Her Family’ and ‘Saint Mary Cleophas and Her Family’ to the heirs of Max Emden in a comparable case with the same legal opinion, as the paintings were also sold through Max Emden in Switzerland,” writes a Finance Ministry spokesperson.

He adds that the German Federal Government’s appeals committee dealt with the case in 2012. For the Finance Ministry, there is no need for appeal as the legal situation is clear. The ministry does not wish to pursue the case “out of respect for the parliamentary decision not to act on this matter.”

But heir Juan Carlos Emden is not new to the world of art restitution. He told The Times of Israel this week he has not ruled out a civil law suit in this matter, saying he and his lawyers, Urbach and partner Stoetzel, will decide strategy next week.

For personal as well as professional reasons, Urbach and Stoetzel’s law practices center around Holocaust restitution, both with a sense of tikkun olam.

“Is Germany really willing to keep such an unhealthy, unholy collection as the Hitler collection? I don’t think that this is something I as a German can be proud of,” says soft-spoken Stoetzel.

'The Lion Tamer' by Max Beckmann was likely Cornelius Gurlitt's last sale. (photo credit: courtesy)

‘The Lion Tamer’ by Max Beckmann was likely Cornelius Gurlitt’s last sale. (photo credit: Courtesy)

Interestingly, Urbach and Stoetzel represented the Jewish heirs in the restitution negotiation of what appears to be Gurlitt’s final sale. “The Lion Tamer” by German artist Max Beckmann garnered $1.17 million at a 2011 Cologne auction. Gurlitt gave 45% to the heirs of the original owner, Alfred Flechtheim, a Jewish art dealer whose galleries were looted by Nazis.

As the Emden case received an unfavorable ruling last week, the Flechtheim heirs won another victory in Cologne. Upcoming for Urbach and Stoetzel is a mid-January hearing on the $200 million Guelph collection.

“Germany now in a situation where the Germans need to make a decision. There are many people out there who have their hearts in the right place, but the overall situation is there is no real will to go a step further and provide people all over the world with a binding process or resolution,” says Stoetzel.