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Investigators Say Chicago’s Art Institute Is Holding onto ‘Looted Art’

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New York investigators trying to seize a drawing from the Art Institute of Chicago filed an exacting 160-page motion on Friday accusing the museum of blatantly ignoring evidence of an elaborate fraud undertaken to conceal that the artwork had been looted by the Nazis on the eve of World War II.

While the court papers, filed by the Manhattan district attorney’s office, did not accuse the museum of being party to the fraud, they said it had applied “willful blindness” to what the investigators said were clear indications that it was acquiring stolen property.

The drawing, “Russian War Prisoner,” by Egon Schiele was purchased by the Art Institute in 1966. It is one of a number of works by Schiele that ended up in the hands of museums and collectors and have been sought by the heirs of Fritz Grünbaum, a Jewish cabaret entertainer from Vienna who was murdered in a Nazi concentration camp. The institute paid about $5,500 for the drawing, which has been valued by investigators today at $1.25 million.

In a statement, the Art Institute said it had good title to the work by Schiele, an Austrian Expressionist, and would fight the district attorney’s attempt to seize it.

“We have done extensive research on the provenance history of this work and are confident in our lawful ownership of the piece,” the museum said, adding: “If we had this work unlawfully, we would return it, but that is not the case here.”

But the investigators said in their court filing that the institute’s “failure” to vet the work properly “undercuts any arguments that AIC were truly good-faith purchasers.”

Much of what was presented in the investigators’ voluminous filing had been cited in civil court cases pursued in recent years by the Grünbaum heirs. The current detailed presentation — which included more than 100 exhibits designed to trace the path of the artwork from the hands of Grünbaum to the Nazis to the museum — was aimed at pressuring the institute to follow the lead of seven other museums and collectors who have recently turned over Schiele works once owned by Grünbaum to the district attorney’s Antiquities Trafficking Unit.

The Art Institute has argued that the federal courts have already ruled in the matter, deciding that the heirs had come forward too late to lay claim to the work, and that there was reason to believe the works were all inherited by Grünbaum’s sister-in-law, who passed them on to a Swiss dealer in the 1950s.

The New York investigators took aim at that account in their motion, devoting page after page to evidence that they said showed the provenance documents brought forward by the dealer, Eberhard Kornfeld, to prove his account, contained forged signatures or were altered long after he came into possession of the Schieles in the mid-1950s.

“There is one person in this case who doctored” documents, “and always did so in pencil — Eberhard Kornfeld,” said Matthew Bogdanos, the chief of the Antiquities Trafficking Unit, in the court filing.

The investigators contend that, while it is not possible to absolutely determine how Kornfeld secured the Grünbaum art, it was most likely provided to him by other art dealers known to have relations with the Nazis. The court filing includes inventory records that prosecutors said establishes that the works were in the possession of a Nazi-controlled storehouse in Austria in 1938 after Grünbaum was sent to the Dachau concentration camp in Germany, where he was killed in 1941.

The filing also cites documents to show that the sister-in-law, Mathilde Lukacs, had already fled the country when the “Prisoner” drawing, and others later obtained by Kornfeld, were in the Vienna storage facility. As a result, the investigators said, the works could not have been sold by her to Kornfeld.

In arguing it holds good title to the work, the Art Institute has relied on two federal court rulings. In one, rendered in 2011 involving another Schiele work once owned by Grünbaum, the judge described Kornfeld’s account as credible, and added that, regardless, the heirs were not timely in bringing a claim.

In a second case brought by the heirs and decided in November, a federal court in New York, citing the earlier federal case, awarded the Art Institute ownership of “Prisoner” because it too ruled that the Grünbaum heirs had waited too long to make a claim for the drawing.

A lawyer for the heirs, Raymond Dowd, said he had filed to ask the judge to reconsider the decision in this case and to allow him to file an amended complaint.

“The Art Institute of Chicago recently prevailed in civil litigation in federal court regarding Egon Schiele’s ‘Russian War Prisoner,’ successfully demonstrating that the claimants’ suit lacked merit,” the institute said in its statement.

“Federal court,” the statement said, “has explicitly ruled that the Grünbaums’ Schiele art collection was ‘not looted’ and ‘remained in the Grünbaum family’s possession’ and was sold by Fritz Grünbaum’s sister-in-law Mathilde Lukacs in 1956.”

The institute’s decision to continue to fight the efforts by Manhattan prosecutors to retrieve its Schiele work makes it a lone holdout among the museums and collectors who received warrants from investigators telling them they possessed stolen property.

Among those who returned Grünbaum works in September were the Museum of Modern Art and the Morgan Library & Museum, both in New York; the Santa Barbara Museum of Art in California; Ronald S. Lauder, president of the World Jewish Congress and a longtime advocate of Holocaust restitution; and the estate of Serge Sabarsky, a well-known art collector.

Since then, two other institutions — the Carnegie Museums of Pittsburgh and the Allen Memorial Art Museum at Oberlin College — agreed to surrender artworks once owned by Grünbaum.

One of the confusing aspects of the dispute is that a state court in New York has ruled in a completely opposite way and found that the Grünbaum Schieles were indeed looted.

While decisions in federal court have held that the Grünbaum heirs waited too long to start reclaiming the works, the 2018 New York State Supreme Court ruling found that Grünbaum had never sold or surrendered any of his works before his death, and that they were looted by the Nazis, making his heirs their true owners.

The ruling relied on the terms of the Holocaust Expropriated Art Recovery Act of 2016, a U.S. law that seeks to ensure that “claims to artwork and other property stolen or misappropriated by the Nazis are not unfairly barred by statutes of limitations.”

Investigators for the Manhattan district attorney’s office became involved after the New York state court ruling. Prosecutors have said they have jurisdiction because some of the Grünbaum works passed from Kornfeld to a Manhattan dealer, Otto Kallir.

The Schiele works, including the “Prisoner” drawing, were sold by Kallir to a variety of buyers, and the drawing ultimately ended up at the Art Institute.

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