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Showing posts with label art law. Show all posts
Showing posts with label art law. Show all posts

December 3, 2023

Sunday, December 03, 2023 - ,,,,,, No comments

Claiming Legacies: Italy, Germany, and the Post-WWII Ownership Battle for the Discobolus

Image Credit: Exhibition Arte Liberata 1937-1947: Masterpieces Saved from War.

This past week Italy's Corriere della Sera newspaper stirred up a long-standing dispute between Italy's National Roman Museum and Germany's Antikensammlungen state antiquities collection regarding who is the rightful owner of the Discobolus Lancellotti, also known as the Discobolus Palombara.  Frozen in a moment of dynamic tension, much like the ownership debate, the marble depiction of an athlete stands as a remarkable example of the classical aesthetics that characterised the ancient world. 

Believed to be a 2nd Century CE marble copy modelled after the original bronze Greek masterpiece created by Myron of Eleutherae around 450 BCE, the Roman version has endured through the centuries and offers its viewers a fascinating glimpse into the Roman's appreciation for the athletes and artistry of the Greeks, as well as the contentious nature of provenance.  The statue depicts the sportsman frozen in a moment of athletic intensity, poised like a coiled spring wound in high tension, to intricately render the disk thrower's musculature and balance. 

The anatomy of the discobolus,
as drawn by the talented @PaulCarneyArts

Rediscovered on the Esquiline Hill in Rome on March 14, 1781 during an excavation carried out by workmen working for the Marquise Barbara Savelli Palombara (1750–1826) and her husband Papal postmaster Camillo Francesco Massimo (1730–1801), the statue was unearthed on the grounds of the 17th century Villa Palombara sull'Esquilino.  There, the accidental archaeology of the diggers unearthed what would turn out to be an extraordinary collection of ancient artistic masterpieces, only one of which was the life-size, 156 centimetre-tall Discobolus.  

The ancient Villa Palombara in a map engraved by
Giovanni Battista Falda (1676).

Initially cleaned in the 18th century by Giuseppe Angelini, it was Italian soon-to-be  archaeologists Giovanni Battista Visconti and Filippo Waquier De La Barthe who first published on the the marble sculpture as a Roma copy of Muron's bronze original in 1801, augmenting their research with an illustration by Carlo Fea. 

Depicting an athlete who competed in Greek agones (athletic competitions), the sculpture's popularity became uniquely recognisable, even to non art historians.  Its discovery also provided us with a fascinating glimpse into the artistic preferences and lavish lifestyles of ancient Rome's elites, and marked a seminal moment in what we now know and understand about artistic preferences in the classical period.   

Having reattached his right arm and left foot, the Discobolus sculpture was taken by the Massimo (later Lancellotti) family to Palazzo Massimo alle Colonne, the site of the family's ancestral properties, located on Via Papalis (now Corso Vittorio Emanuele II).  There it was given its own private viewing room on the palazzo's piano nobile or main floor.  Later, it would it be installed by Prince Filippo Massimo Lancellotti and Princess Elisabetta Borghese Aldobrandini at the Palazzo Massimo Lancellotti.

By January 1937 the Lancellotti family was actively shopping the sculpture for a new owner.  Following the 25 January 1937 death of Princess Elisabetta Borghese Aldobrandini, we can document a 29 January 1937 letter written by Gisela Richter to The Metropolitan Museum of Art's director, Herbert E. Winlock, where the US museum director was alerted to the fact that the Discobolus had been shopped by “the very difficult old lady at the head of the house” to foreign museums. 

Yet despite the Met's rather healthy and hastily-gathered purchase budget, capped at $300,000 including export fees, and with Joseph Brummer acting as the museum's purchasing agent through Roman antiquities’ dealers, Ettore and Augusto Jandolo, the Met moved too slowly and the marble sculpture was sold to the German state.  As a consolation prize, the Met was still able to acquire a marquetry studiolo from Federico da Montefeltro’s palace in Gubbio which was sold by the Lancellotti family in 1937 to Adolph (Adolpho) Loewi, a German-Jewish art and antiquities dealer who flipped the piece to the Met before leaving Italy in 1939. 

Germany's fascination with the Discobolus 

Even before its purchase, the discobolus was firmly cemented in the hearts of Germans.  More so when held up as the ideal in the rhetoric, propaganda, art, and architecture of National Socialism.  This fascination can be seen in the evocative prologue of the 1936 film directed by Leni Riefenstahl Olympia – Festival of Nations which documented that summer's Olympics, held in the Olympic Stadium in Berlin during the Nazi period. 

Released in Germany on Hitler’s birthday on 20 April 1938, one month shy of the Nazis’ purchase of the statue, the film begins with a fanciful recreation of the ruins of the Acropolis of Athens, focusing in, with short clips, on a varying group of Greek statues before the montage concludes with a clearer image of the Discobolus as it gradually morphs into the ideal German athlete, Erwin Huber, who competed in the men's decathlon. His transformation was meant to illustrate the 'Vigour and beauty' of ancient Greece reborn in the athleticism and perfect physical form of modern Germany.

But back to the sale of the Discobolus

Bear in mind that in 1937 when Adolf Hitler first expressed interest in the Discobolus, Italy's cultural property was already protected by Law No. 364/1909, commonly referred to as the 'Rosadi-Rava Law.  This law, approved by the Italian parliament, stated that when a good owned by an individual or a private entity is classified as cultural property, the owner remained under an obligation to preserve its integrity (Article 20(1)(a) of the CHC). Furthermore, an authorisation by the Ministry of Education was required before such objects could be moved from their current location, for example, for a showing at an exhibition (Article 20(1)(b) of the CHC)3 or for restoration (Article 20(4) of the CHC).  

In the case of sale, a privately owned antiquity, classified as cultural property, might be sold, but the seller has an obligation to notify the contract to the Italian State within 30 days of the date of the sale.  In case of sale, the State has a pre-emption right, to be exercised within 60 days of the date of receipt of the sale notice (Article 59 of the CHC), all this to say that cultural property of a historic interest to the stated should not have been exported from the national territory on a permanent basis. 

Despite this, Benito Mussolini forced the hand of his then-Minister of Education, Giuseppe Bottai, by tacitly approving an export waiver to Adolf Hitler and not stepping in to deny the statue's export. On 18 May 1938 Galeazzo Ciano, Mussolini’s son in law and the Foreign Minister of Fascist Italy from 1936 to 1943, completed the sales transaction for the Discobolus.  The selling price was five million lire, ($252,000, as calculated later by the US Office of Military Government [OMGUS]), paid out over the protests of Giuseppe Bottai, Minister of Education, and the scholarly community. The German government then paid an additional 1,485,000 lire in export tax to complete the acquisition. 

On 29 June 1938 the Discobolus was shipped by train to Germany and was put on display at the Munich Glyptothek, with Hitler in attendance for its opening premiere on by 10 July 1938.  Some say Hitler opted for the Munich museum over the Staatliche Museen zu Berlin as a technique of oneupmanship.  One hundred years earlier, Ludwig I, the King of Bavaria, had sought to purchase the famous statue for his own collections. 

Adolf Hitler in the Munich Glyptothek with the Lancellotti Discobolus,
10 July 1938 - Image Credit US Library of Congress

The Lancellotti Discobolus then spent a decade in Germany, enduring the tumultuous period of World War II and escaping the heavy damage to the Glyptothek in the summer of 1944, when the museum was badly hit by Allied bombing raids. Thankfully, the bulk of the Glyptothek collection of sculptures and works of art had previously been brought to safety in monasteries. What had to be left behind, and not immediately destroyed by the bombing, suffered severe damage in the waning years before its restoration, as the cultural heritage institution was left without a roof. 

The remains of the Roman Hall of the Munich Glyptothek in 1945
.
After the war, the Discobolus was ordered to be returned to Italy, as part of a broader repatriation effort termed the “Exceptional Return of Works of Art” by Allied authorities.  Rodolfo Siviero, Italy's postwar representative dedicated to repatriating art taken from the country since 1937, was known to have played a pivotal role in advocating for the return of the marble statue and other contentious works of art. These pieces, all acquired by the National Socialist government, were contested on the grounds that the export permits were illegal, and in violation of the law of 1909. 

But the return of the Discobolus was not without its controversies. On Germany's side, letters of protest were sent to the U.S. Secretary of State, as well as to President Truman.  One of these was signed by thirty-six German staff members working at the Munich Central Collecting Point (CCP).  Another letter of protest, organised by a professor at the University of Munich, was signed by eighty-eight German officials.  

Calls for the decision's repeal were subsequently directed to the colonial authority known as the Office of Military Government, United States, (OMGUS) in Berlin and ultimately culminated in the resignation of Herbert S. Leonard, in November 1948, from his position as director of the Munich Central Collecting Point (CCP).  Leonard having resigned in opposition to OMGUS's fixed decision to return seventeen paintings and the sculpture to the Italian government.

The Italian authorities have always maintained that the collection was seized by Fascist leaders and gifted to the Nazis. While Leonard and others working on the provenance of objects held at the collecting point pointed to the fact that sculpture had been purchased by Nazi Germany in 1938 after Mussolini declared an "axis" between Germany and Italy on 1 November 1936 and prior to the start of World War II on 31 August 1939 and was therefore not an under duress sale.

Once back in Italy, in 1948, the Discobolus became part of the collection of the National Roman Museum at Palazzo Massimo.  More recently it has been part of an exhibition at the Scuderie del Quirinale titled Arte Liberata 1937-1947: Capolavori Salvati dalla Guerra dedicated to the theme of cultural heritage at risk during World War II.  Afterwards, following a major reorganisation which is anticipated to take three years, the statue is expected to be moved permanently to Palazzo Altemps, close to Piazza Navona.   As for whose property the statue is, well I will leave that debate to the lawyers. 



By: Lynda Albertson


March 13, 2020

Friday, March 13, 2020 - ,,,,,, No comments

Supreme Court Decision on the Legal Status of Famous Picasso Painting

On March 2, 2020, the U.S. Supreme Court declined to review a case disputing who should own the Pablo Picasso masterwork, “The Actor,” created around 1904-05.  The painting was once owned by Jewish industrialist Paul Leffmann, who sold the artwork under duress for $12,000 in 1938, after leaving Germany in 1937 in order to fund his move from Italy to Switzerland. At the time in history, Italy was ruled by Benito Mussolini’s fascist dictatorship.

ARCA extends its thanks the Holocaust Art Restitution Project  who continue to follow cases like this, as well as all the lawyers who worked on legal aspects of the case.  Each remind us that we need to continue to try to right the wrongs of the past and where possible consider the lingering and painful effects of the horrific circumstances faced by individuals like the Leffmanns under the Nazi and Fascist regimes. 

With the Supreme Court's decision, Paul Leffmann's great-grand-niece has no other recourse tham to visit her family's painting in the Metropolitan Museum of Art in New York. 


February 2, 2020

Sunday, February 02, 2020 - ,,,,,, No comments

Supreme Court Asked to Consider Legal Status of Famous Picasso Painting

A petition for writ of certiorari has been filed asking the U.S. Supreme Court to review a ruling dismissing a case against New York’s Metropolitan Museum of Art for the return of a Pablo Picasso masterwork, “The Actor,” created around 1904-05.

Jewish refugee Paul Leffmann sold the painting under duress in 1938, because of Nazi and Fascist persecution, when he and his wife Alice, having already escaped Germany, sought to flee a fast-Nazifying Italy. The purchasers were art dealer Hugo Perls and Pablo Picasso’s own dealer Paul Rosenberg, a French art dealer who represented Picasso, Georges Braque and Henri Matisse.

Not satisfied with an appellate court decision affirming the dismissal of the family’s claim to the painting as having been filed too late, Laurel Zuckerman, Paul Leffmann's great grand-niece, through her attorneys, has petitioned the U.S. Supreme Court to hear her case.  The Supreme Court grants around 100 of the 7,000+ petitions it gets each year, focusing on cases of national significance,or  those which might harmonize conflicting decisions in the federal Circuit courts. 

According to Zuckerman’s petition, her case raises an issue of nationwide importance concerning the HEAR Act: whether, “despite the introduction of a nationwide statute of limitations designed to revive Holocaust-era restitution claims,” the Act still allows the laws of each of the 50 states to declare a claim untimely, and to thereby put up additional roadblocks to the very Holocaust era claims Congress encouraged under the HEAR Act. 

Zuckerman, representing the estate of Alice Leffmann, had sued the Metropolitan Museum of Art in 2016, asserting in court papers that the museum does not hold good title to the painting because the businessman was forced to sell this artwork at a low price, under pressure, in order to finance their flight from Italy given the actions of the Nazi-allied Mussolini-led government and anti-jewish climate at the time in Western Europe.  The Nazis had already stripped the Leffmans of their home and business. Having lost in the district court, the case was then brought up on appeal to the Second Circuit Court of Appeals in New York.

The appellate court agreed that the case was properly dismissed. 

The appellate court's ruling noted that the federal Holocaust Expropriated Art Recovery Act of 2016 (known as the HEAR Act), designed to help facilitate the recovery of art and other prized possessions unlawfully lost because of Nazi persecution, needs to provide “some measure of justice, even if incomplete,” to the victims of Nazi persecution and their heirs.  However, the court sided with the New York museum stating that it would be unfair for the Metropolitan to relinquish the Picasso, given the "unreasonable" delay in demanding its return.  The appellate court noted: "This is not a case where the identity of the buyer was unknown to the seller or the lost property was difficult to locate." 

The cert petition to the U.S. Supreme Court raises two challenges to the appellate court ruling. First, “whether the nonstatutory defense of laches may bar an action to recover artwork lost because of Nazi persecution, where that action has been brought within the statute of limitations prescribed by Congress” in the HEAR Act. And second, whether a case can be dismissed so early without a factual exploration of the laches defense urging undue delay raised by the Museum. 

Zuckerman is represented by Mary- Christine SUNGAILA, Will Feldman, and Marco Pulido at Haynes and Boone, LLP, in the case before the Supreme Court.  Zuckerman was represented in the trial court and continues to be represented on appeal by Lawrence Kaye, Howard Spiegler, Ross Hirsch, and Yael Weitz of Herrick, Feinstein LLP.

January 19, 2020

Sunday, January 19, 2020 - ,,,,,, No comments

Flashback Sunday: ARCA's Postgraduate Program: From the eyes of one of our alumni - Part I


I’m not sure whether it makes more sense to say that we’re only halfway through with the ARCA postgraduate program or that we’re already halfway through with the program. On the one hand, we have had the good fortune of hearing from six expert professors and have covered all sorts of ground—academic and professional terrain alike—in the study of art crime: from heritage law to art insurance, from art policing to forgery, and from museum security to war crimes. We’ve practically memorized most of the UNESCO conventions at this point, we’re capable of sketching out the infamous Medici trafficking organigram at the blow of a whistle, and we’re all pretty used to having revenge-fantasy dreams about prosecuting certain museums with less-than acceptable collection ethics and repatriating all of their loot.

On the other hand, however, it feels like we’ve only just arrived in Amelia and that there’s still a whole lot more for us to learn in the coming weeks about cultural heritage protection. We’ve yet to encounter the international art market or art criminology head-on, and we’re not quite sure whether we believe the Spanish or the British are more entitled to Goya’s Portrait of the Duke of Wellington. Moreover, we still don’t know how we would actually steal the Ghent Altarpiece or Munch’s The Scream and this makes me wonder: can anyone really fashion him or herself an art crime expert without knowing how to pull off a major museum heist? It’s probably a good thing that we’re only halfway done with the ARCA program, but I’ll share with you what we’ve covered in the courses so far since we are, after all, already halfway finished with the program.  


Following Duncan Chappell’s course our studies shifted from the subject of art law to its not-too-distant relative, art insurance. Dorit Straus, art insurance veteran and board member at AXA Art, served as the instructor for this course. Straus has had a lengthy and exciting career with all sorts of cinematic turns and climaxes. Its major plot twist: Straus began her career studying Near Eastern Archaeology and only later in life migrated into the world of art insurance. For those of us trained in the humanities—which is to say, with little to no background in the fine arts market—Straus guaranteed a convenient point of entry into the study of art insurance. Pairing her formal explanations with fascinating anecdotes, Straus shaped and colored the art insurance industry with remarkable and stunning mastery. By the end of the week Straus had participants map out the entire process of acquiring art insurance coverage in role-play exercises—a form of evaluation that was, I am sure, most entertaining for Dorit herself.

We then heard from private investigator Richard Ellis, the founder of Scotland Yard’s Art and Antiques Squad. He covered lessons on the dark, seedy underbelly that is the black market and did a solid job explaining the ins and outs of INTERPOL and clarified the issues that police forces deal with in an event of art theft—issues that are quite distinct from the ones that insurers, collectors, or museums address.

One of the recurring lessons that Ellis repeated over and over again was the importance of knowing one’s enemy.  Understanding the motives that animate an episode of art crime, Ellis stressed, is always integral to the investigation process. At the conclusion of his course Ellis held a charming cocktail gathering that was, I would hold, much needed after a tense week studying some pretty serious material.

ARCA founder Noah Charney took the reigns for our next course on forgery. Charney launched his course with an art history lesson in which students were asked to perform visual analysis on a set of Caravaggio paintings. This exercise offered an exciting opportunity for students to truly interface with the very objects that had been broached in previous courses but perhaps not formally or materially addressed. It was a delight to work through Caravaggio’s endlessly fascinating visual puzzles, and Charney’s thorough guidance and insightful explanations proved to be especially useful in our brief art historical investigation. The rest of the week was spent differentiating (conceptually) fakes from forgeries, discussing the psychological profile of art forgers, and reviewing some of the major historical cases that constitute Charney’s sector of the art crime world. With Charney still in town, ARCA held its annual interdisciplinary conference—an exciting three days of panel discussions.

After a weekend of conference talks and cocktail parties ARCA participants met with security pundit Dick Drent. Following 25 years in law enforcement, Drent joined the staff at Van Gogh Museum in the Netherlands and continues to provide security advising through his consulting firm. Though Drent’s energy and countenance might feel as formidable and high-stakes as his work, the Dutch professor’s instruction was often light and playful—much like the goofy videos he would screen at the beginning of class too lighten the mood.  This was especially appreciated given his course covers everything from everyday threats in a museum to Active Shooter incidents.

At the end of Drent’s class participants carried out a security audit at a museum. In this exercise we set out to observe surveillance cameras, security guards, museum layouts, fire prevention strategies, smoke detectors, alarm systems, and so on. The exercise gave ARCA participants a unique opportunity to spend a day at a museum not admiring precious artworks but instead observing the very security systems that attempt to protect these objects.

At the conclusion of Drent’s course we delved headfirst into “Art Crime During War” with Judge Arthur Tompkins. Tompkins’ hefty lesson plans and near-impeccable knowledge of world history made for an information-rich crash course in our study of art crime during conflict. At the outset of his first lesson Tompkins traced the origins of art crime all the way back to the ancient world.

The looting of what might be anachronistically termed “cultural property” often went part and parcel with military combat and imperial campaigns in the ancient world—thus giving birth to the lengthy history of what we now study as art crime. Tompkins then traversed the entire chronology of war—passing through the Middle Ages and early modernity until reaching the late twentieth century—and identified the various renditions of art crime that have plagued nation-states and peoples during times of conflict. By the end of the course participants were asked to submit a paper detailing one particular episode of art crime that took place in the midst of combat. Students wrote about everything from plunders during antiquity to more recent art theft in the Middle East to the destruction of libraries in the American Civil War. 

So there you have it! We have some of the covered vast terrain in the world art crime and are already halfway through this intensive training. I’ll get back to you with more storytelling and info when we’re only a few short steps away from calling ourselves full-on, to-the-core certificate-ready professionals!

By:  Christopher Falcone

October 6, 2019

Sunday, October 06, 2019 - ,,, No comments

Symposium: Patrimony in Peril

Image Credit: UNC-ILJ
Event:  UNC - International Law Journal Symposium: Patrimony in Peril
Registration Fee:  $65
Location: Rizzo Center
150 DuBose Home Lane, Chapel Hill, North Carolina, 27517
Date: Friday, October 11, 2019
Time: 08:30 - 16:30

This symposium will focus on legal issues involving stolen and looted art, recovering cultural patrimony, and suggested legal reform to improve the current international and domestic laws relating thereto. The event will include three panels: one on cultural heritage law in conflict zones, one on provenance law, and one on asset forfeiture and recovery of looted art.

Attendees can register following the official announcement page here.


October 8, 2018

Monday, October 08, 2018 - ,,,, No comments

Conference: Third All Art and Cultural Heritage Law Conference on “National Treasures: Limits to Private Property and Cross-Border Movements”


The 3rd All Art and Cultural Heritage Law Conference on “National Treasures: Limits to Private Property and Cross-Border Movements” will be held at the University of Geneva on Saturday, November 10, 2018 and will look at the concept of “national treasures” and to critically explore its meaning and impact on the regulation of the cross-border trade in cultural objects. 

Participation is free but attendees are asked to register by 30 October 2018 at
art-droit@unige.ch

Details presented by the organizers are as follows: 

10:00 Registration
10:30 Welcome words 
Benedict Foëx, Dean of the Law Faculty, University of Geneva

Foreword / Introduction
Stephen Urice, Professor, School of Law, University of Miami
Marc-André Renold, Director of the Art-Law Centre, UNESCO Chair, University of Geneva

PANEL I – LEGAL PERSPECTIVE: RULES, NOTIONS AND INTERPRETATIONS 
Chair: Alessandro Chechi, University of Geneva

10:50 Gagliani Gabriele, Bocconi University 
Article XX(f) of the GATT 1994 and Rules on Treaty Interpretation: Defining ‘National Treasures’ in International Trade Law

11:10 Anna Frankiewicz-Boydynek and Piotor Stec, Opole University 
Defining ‘National Treasures’ under the EU Directive on Return of Cultural Goods. Is Sky Really the Limit?
 
Discussion and coffee break

11:50 Ferrazzi Sabrina, University of Verona 
EU National Treasures, Politics and the Role of the ECJ

12:10 Evelien Campfens, University of Leiden 
Whose Treasures? Limits to the Notion of ‘National Treasures’ and New Prospects

12:30 Edith Wagner, Max Planck Institute Luxembourg 
Regulation through Litigation. The Procedural Protection of National Treasures and the Potential of EU Civil Procedure to Regulate the Cross-Border Trade in Cultural Property
 
Discussion and lunch break

PANEL II – PRACTICAL PERSPECTIVE: CASES FROM EUROPE AND BEYOND 
Chair: Marc-André Renold, Director of the Art-Law Centre, 
University of Geneva

14:00 Gillman Derek, Drexel University 
The Old Summer Palace and the Making of National Treasures

14:20 Teodora Konach and Michaela Löff, University of Vienna 
How ‘National’ Are ‘National Treasures’? Comparative Analysis of Austrian, Czech and Polish Legislation

14:40 Arianna Visconti and Eliana Romanelli, Catholic University of Milan 
The Definition and Identification of Cultural Property under the Italian Code of Cultural Heritage in light of the Recent Reform on the Export of Cultural Goods: Closing the Gap with the EU Approach, or Cosmetics?
 
Discussion and coffee break

15:40 Charlotte Woodhead, University of Warwick 
Tarnished Treasures: Provenance and the UK’s Waverly Criteria

16:00 Musa Ramatu, University of Basel 
The Sapi-Portuguese Ivories as ‘National Treasures’ of the Republic of Sierra Leone: A Moral Case for Repatriation

16:20 Riccardo Vecellio Segate, Utrecht University 
Treasures and Heritage under the TFEU: The Case of Music Legacy

16:40 Marc-André Renold, Alessandro Chechi and Stephen Urice 
Conclusions

July 20, 2016

Wednesday, July 20, 2016 - ,,,,,,,, No comments

ARCA's Postgraduate Program: From the Eyes of a 2016 Student - Part II


I’m not sure whether it makes more sense to say that we’re only halfway through with the ARCA postgraduate program or that we’re already halfway through with the program. On the one hand, we have had the good fortune of hearing from six expert professors and have covered all sorts of ground—academic and professional terrain alike—in the study of art crime: from heritage law to art insurance, from art policing to forgery, and from museum security to war crimes. We’ve practically memorized most of the UNESCO conventions at this point, we’re capable of sketching out the infamous Medici trafficking organigram at the blow of a whistle, and we’re all pretty used to having revenge-fantasy dreams about prosecuting certain museums with less-than acceptable collection ethics and repatriating all of their loot.

On the other hand, however, it feels like we’ve only just arrived in Amelia and that there’s still a whole lot more for us to learn in the coming weeks about cultural heritage protection. We’ve yet to encounter the international art market or art criminology head-on, and we’re not quite sure whether we believe the Spanish or the British are more entitled to Goya’s Portrait of the Duke of Wellington. Moreover, we still don’t know how we would actually steal the Ghent Altarpiece or Munch’s The Scream and this makes me wonder: can anyone really fashion him or herself an art crime expert without knowing how to pull off a major museum heist? It’s probably a good thing that we’re only halfway done with the ARCA program, but I’ll share with you what we’ve covered in the courses so far since we are, after all, already halfway finished with the program.  


Following Duncan Chappell’s course our studies shifted from the subject of art law to its not-too-distant relative, art insurance. Dorit Straus, art insurance veteran and board member at AXA Art, served as the instructor for this course. Straus has had a lengthy and exciting career with all sorts of cinematic turns and climaxes. Its major plot twist: Straus began her career studying Near Eastern Archaeology and only later in life migrated into the world of art insurance. For those of us trained in the humanities—which is to say, with little to no background in the fine arts market—Straus guaranteed a convenient point of entry into the study of art insurance. Pairing her formal explanations with fascinating anecdotes, Straus shaped and colored the art insurance industry with remarkable and stunning mastery. By the end of the week Straus had students map out the entire process of acquiring art insurance coverage in role-play exercises—a form of evaluation that was, I am sure, most entertaining for Dorit herself.

We then heard from Richard Ellis, founder of Scotland Yard’s Art and Antiques Squad, who covered lessons on the dark, seedy underbelly that is the black market. Ellis did a solid job explaining the ins and outs of INTERPOL and clarified the issues that police forces deal with in an event of art theft—issues that are quite distinct from the ones that insurers, collectors, or museums address. One of the recurring lessons that Ellis repeated over and over again was the importance of knowing one’s enemy.  Understanding the motives that animate an episode of art crime, Ellis stressed, is always integral to the investigation process. At the conclusion of his course Ellis held a charming cocktail gathering that was, I would hold, much needed after a tense week studying some pretty serious material.

ARCA founder Noah Charney took the reigns for our next course on forgery. Charney launched his weeklong course with an art history lesson in which students were asked to perform visual analysis on a set of Caravaggio paintings. This exercise offered an exciting opportunity for students to truly interface with the very objects that had been broached in previous courses but perhaps not formally or materially addressed. It was a delight to work through Caravaggio’s endlessly fascinating visual puzzles, and Charney’s thorough guidance and insightful explanations proved to be especially useful in our brief art historical investigation. The rest of the week was spent differentiating (conceptually) fakes from forgeries, discussing the psychological profile of art forgers, and reviewing some of the major historical cases that constitute Charney’s sector of the art crime world. With Charney still in town, ARCA held its annual interdisciplinary conference—an exciting three days of panel discussions that another student, Cate Waldram, will  be posting on in greater detail.

After a weekend of conference talks and cocktail parties ARCA students met with security pundit Dick Drent. Following 25 years in law enforcement, Drent joined the staff at Van Gogh Museum in the Netherlands and continues to provide security advising through his consulting group, Omnirisk. Though Drent’s energy and countenance might feel as formidable and high-stakes as his work, the Dutch professor’s instruction was often light and playful—much like the goofy videos he would screen at the beginning of class too lighten the mood, especially since his course covers everything from everyday threats to Active Shooter incidents.

At the end of Drent’s class students carried out a security audit at a museum. In this exercise students set out to observe surveillance cameras, security guards, museum layouts, fire prevention strategies, smoke detectors, alarm systems, and so on. The exercise gave ARCA students a unique opportunity to spend a day at a museum not admiring precious artworks but instead observing the very security systems that attempt to protect these objects.

At the conclusion of Drent’s course students delved headfirst into “Art Crime During War” with Judge Arthur Tompkins. Tompkins’ hefty lesson plans and near-impeccable knowledge of world history made for an information-rich crash course in our study of art crime during conflict. At the outset of his first lesson Tompkins traced the origins of art crime all the way back to the ancient world.

The looting of what might be anachronistically termed “cultural property” often went part and parcel with military combat and imperial campaigns in the ancient world—thus giving birth to the lengthy history of what we now study as art crime. Tompkins then traversed the entire chronology of war—passing through the Middle Ages and early modernity until reaching the late twentieth century—and identified the various renditions of art crime that have plagued nation-states and peoples during times of conflict. By the end of the course students were asked to submit a paper detailing one particular episode of art crime that took place in the midst of combat. Students wrote about everything from plunders during antiquity to more recent art theft in the Middle East to the destruction of libraries in the American Civil War. 

So there you have it! We have covered vast terrain in the world art crime and are already halfway experts in the field. I’ll get back to you with more storytelling and info when we’re only a few short steps away from calling ourselves full-on, to-the-core certificate-ready professionals!

By:  Christopher Falcone

February 5, 2013

Tuesday, February 05, 2013 - ,,, No comments

Leila Amineddoleh Quoted in NYTimes Article "Lawyers Fight to Keep Auction Sellers Anonymous"

In the Feb. 3 New York Times article ("Lawyers Fight to Keep Auction Sellers Anonymous") by investigative journalist Tom Mashberg (co-author of Stealing Rembrandts), art lawyer Leila Amineddoleh (ARCA Alum 2010) notes that disclosing the identity of the seller could 'aid with provenance questions and enhance the future value of an item.'

Mashberg reports that an appellate court ruled last October to uphold a state law that requires the names of sellers be given to buyers in post-auction paperwork in order to close the sale.

March 29, 2012

Thursday, March 29, 2012 - ,,,,,,, No comments

Catching up with Judge Tompkins About his "Art Crime during Armed Conflict" course at the University of Waikato's Law School


University of Waikato's Law School
Judge Arthur Tompkins, an instructor at ARCA's Postgraduate Certificate Program in International Art Crime and Cultural Heritage Protection Studies, also taught a course in February in his home country.  ARCA Blog caught up with him to see how it went in New Zealand.

Tell us about the Art Crime course you presented earlier this year at the University of Waikato?

The University of Waikato's Law School hosted the course and offered it as a credit course to their own students.  It was also offered as a non-credit coruse through the Continuing Education arm of the University. The course was entitled "Art Crime during Armed Conflict", and, similarly to the course I teach in Amelia as part of the ARCA Postgraduate, it was a five-day intensive course, comprising 5 hours of teaching each day for a week during the height of our Southern Hemisphere summer. We cover two thousand years of the history of art crime during war, and the international and private law responses to it. And all in five fun-filled and fascinating days! 

We ended up with 16 students in the group, from three countries and two hemispheres, with the largest sub-group being law students (I was teaching the course within a Law School, after all!). But the class also included a working artist, two art historians, a police officer, a doctor, an art gallery director, a cultural heritage worker, and others.  It all made for a vibrant and energetic group, and we had some spirited discussions!  And on the last day, ARCA's Noah Charney was able to join us, via Skype, from Slovenia, which was a real highlight.

University of Waikato's campus
At least two of the group will be in Amelia for this year's Art Crime Conference on 23/24 June, and in addition, in the last few days, I have learnt that one of the group has been accepted into the full ARCA Postgraduate Program, so will get to spend the entire Italian summer living and studying in Amelia.

It is likely that the course will be offered every second year at Waikato University, so the next occasion will be in February 2014. I am presently investigating offering a similar course elsewhere in New Zealand in the intervening year.

What time period do students seem most interested in? Nazi theft?

The students were from a wide range of backgrounds and interests, as I said, and I think that as a result no one area or era stood out.  They have written (or are writing - the assignments from the for-credit students are due soon!) assignments on an equally wide range or topics - which is, I think, a testament to the breadth of scholarship that falls under the art crime umbrella.  And because the course covers not only the historical background to art crimes during wars over the centuries, but also the international and national legal responses, there is something of real interest there for everyone.

What do you think are the most contentious legal issues involved in conflict art?

Two difficult issues continue stand out for me - first, the return of objects taken during past armed conflict, that are held currently by a state or national institution, and where there is a call for return.  In that context no issue of private ownership arises, but rather the issue revolves around often contentious questions of the principles underlying the legal structures around the state's continued retention of the object, and the ability or willingness of a state, or its politicians, to relinquish possession. Secondly, the spectrum of responses by legal systems around the world to the bona fide purchaser rule - where someone has paid a reasonable price without knowledge of the fact that the item had in the past been stolen, do they or should they prevail over the original, dispossessed owner's rights? Different legal systems around the world adopt often mutually exclusive positions on this issue, and despite decades of work, the gulf remains unbridged.  We need to find some way of reconciling the irreconcilable!

In 2009 you spoke at the International Art Crime Conference in Amelia about a proposed International Art Crime Tribunal.  As you have now taught this course three times, how have your ideas about an IACT evolved? What would it take to make it happen and what do you think would be some of the first cases that you would like to see be dealt with?

I would still love to see such a Tribunal established, and nothing that I have seen or read or heard over the last three years has changed that view - to the contrary, there is still much to recommend it.  The United Kingdom's Spoliation Panel has shown that a tribunal can effectively apply both legal and moral criteria when resolving claims to disputed art, and, whilst effective in some cases, the litigation experience in the United States shows that the resolution of such disputes by "traditional" adversarial litigation brings with it inevitable constraints, in terms of access to justice, the restrictions inherent in the rules of evidence a court applies, and a likely win/lose result paradigm.  

What would it need to make this happen? As I said to the ARCA Conference in 2010, it needs a champion on the world stage, and a real commitment by a group of states with a single voice in the forums of international law - particularly the United Nations and within that, UNESCO - to make it happen.  Where either of those might be found, I do not know.  Until then, it will remain a lonely idea wandering at large in the world, although I was very heartened to hear Pablo Ferri support the idea at last year's ARCA Conference!  

By the way, I still think, for a whole lot of reasons, that Florence would be a very suitable seat for such a Tribunal!

September 27, 2011

Tuesday, September 27, 2011 - , No comments

"The Three Elephants" are Fighting For Survival in Court: Moral Rights Through the Prism of the South African Constitution

'Elephant' by artist Andries Botha under construction
Press release issued by Toby Orford, TOBY ORFORD ART LAW, who attended ARCA's Third International Art Crime Conference.

In order to protect his “Three Elephants” artwork – a life-size sculpture at the Warwick Triangle Viaduct in Durban – the internationally respected artist Andries Botha has been forced to institute legal proceedings. The case is brought against eThekwini Municipality and other parties, including the Minister of Arts and Culture, Mr Paul Mashatile. Botha will be represented in the Durban High Court proceedings by the prominent constitutional and administrative law Advocates Gilbert Marcus SC and Max du Plessis.

The dispute has generated much public interest since February 2010 and the dilemma of Andries Botha and “The Three Elephants” has been reported on extensively in the media, in South Africa and internationally.

At the heart of the dispute is the fate of “The Three Elephants”. “If eThekwini has its way, my sculpture, which was approved and commissioned by them, will be torn down”, said Andries Botha. Although eThekwini concluded a contract with Botha to build three elephants emerging from a sea of stones, it changed its mind in June 2010. Having formally ordered Botha to stop working on the public sculpture, eThekwini passed a Resolution which approved the destruction of two of the elephants and the incorporation of the remaining elephant into a new urban design concept consisting of the “Big Five” animals.

eThekwini's about-turn is closely linked to rumours that local ANC politicians are fearful that “The Three Elephants” are too closely related to the official symbol of the Inkatha Freedom Party:

“This is ironic because the elephants were specially chosen – by eThekwini - as an apolitical African metaphor for tolerance, co-existence and due consideration for a vulnerable eco-system”, said Botha.

Botha wants to complete “The Three Elephants” project in the public interest, and to receive payment for the work he and his employees have done. Notwithstanding Botha's efforts to find a solution to the stand-off, eThekwini has refused to give an undertaking to safeguard the integrity of “The Three Elephants” – which means that the elephants may be removed at any time.

Andries Botha says that he has been left with no choice but to seek the court's protection. His legal representative Toby Orford of Toby Orford Art Law has been instructed to lodge application papers at the Durban High Court. Toby Orford confirmed that the papers have been filed and are being served on the respondents. According to Toby Orford, “The purpose of the application is fully set out in the application papers but it is no secret that it is an application for a declaration to confirm Andries Botha's rights, a review of eThekwini's decision and an interdict prohibiting eThekwini (and others) from modifying, altering or destroying “The Three Elephants”. Andries also has separate claims in contract and delict against the contractors involved in the Warwick Triangle project.”

Botha's case is that eThekwini's decision to remove two of the elephant figures is a decision to destroy, mutilate or change a work of art. eThekwini's decision amounts to censorship and interference, which violates the artist's freedom of artistic expression which is guaranteed by the Constitution.

Above all, eThekwini's decision is a breach of the moral rights of an artist. Toby Orford explained further:

“Moral rights are known in copyright law as the author's “moral right” and are closely derived from Article 6 of the Berne Convention, 1886. An artist's moral rights (as set out in section 20 of the Copyright Act) are infringed when without his approval his right of paternity in the work is not acknowledged or (as in this case) an unjustifiable distortion, mutilation or other modification of the work takes place or is threatened.”

It is time that the moral right of the artist is upheld in South Africa, as seen through the wide-angle lens of section 16 of the Constitution:

“Art and artists have clear rights. Unfortunately, it appears that the only way to protect those rights and the public's interest in The Three Elephants is by recourse to the courts. This decision has been taken only after careful deliberation and unsuccessful efforts to broker a compromise solution”, said Toby Orford.

Toby Orford can be reached at toby@tobyorford.com OR www.tobyorford.com.

May 4, 2011

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ARCA 2010 Alum Leila Amineddoleh Establishes the Art Law Group at Lysaght, Lysaght & Ertel in New York

Leila Amineddoleh inside a church in Cappadocia
This year ARCA 2010 Alum Leila Amineddoleh founded the Art Law Group at Lysaght, Lysaght & Ertel in New York. The group specializes in visual art and intellectual property. The acquisition and ownership of artwork involves many complex transactions, Ms. Amineddoleh told the ARCA Blog.
“The Art Law Group at Lysaght, Lysaght & Ertel counsels clients on all legal issues related to the acquisition, retention, and disposition of fine art, and rights to works of artistic creation. The firm handles litigation, alternate dispute resolution, and transactions that concern works of art, the art market, and the art world. It assists clients with the purchase, consignment, sale, and auction of art, organizing and implementing major exhibitions, structuring business agreements, drafting contracts, complying with customs procedures, recovering stolen work for collectors and insurance companies, and advising clients on criminal matters.”
The partners at Lysaght, Lysaght & Ertel approached Leila about joining the firm after she had returned from her studies with ARCA.
“The members of the firm have had great success in both litigation and transactional work, including recovering large monetary judgments in complex litigations. In addition, the founding partners of the firm are avid art collectors and involved in the art markets in both New York City and Chicago.”
ARCA Blog: What has been the most challenging part of forming a new practice group at a law firm?
Leila: The most difficult task is marketing the group. There are a few very well-known law firms in the US that have wonderful art law groups, and naturally clients turn to those firms first. Being the new kid in town is challenging, but we’re hoping that members of the art community will begin to recognize LLE as one of New York’s top art law firms.
ARCA Blog: What advantages does a smaller firm like LLE offer?
Leila: Because we’re a smaller firm, we have lower operating expenses, meaning that we’re able to charge less for our services. Clients will be able to get high-level work, but for lower prices.
ARCA Blog: How does an art law group function?
Leila: Basically, the same as any other group. Clients call us with questions about their legal situations, ranging from negotiating contracts between galleries and artists, litigating for the sale of paintings, filing trademarks, or dealing with criminal investigations regarding provenance. Clients can be very emotional about their legal issues, and it’s our job to analyze their situations rationally to find the best solution for each unique situation. We do our best to use legal tools to properly advise our clients and protect their interests.
ARCA Blog: Are your clients concerned about the provenance of their artworks? Are you ever asked to substantiate the ownership of an object or painting against claims of theft?
Leila: Clients are concerned about the provenance of their objects. Collectors are beginning to realize that provenance is extremely important. If they do not complete their due diligence of provenance research, they could have much bigger and more costly problems later down the line. In order to substantiate ownership, LLE works with provenance researchers in the US and Europe.
ARCA Blog: Do you see any issues regarding Holocaust-era art restitution?
Leila: I haven’t yet worked on any Holocaust-era art restitution cases, but it’s an area that I’m deeply interested in, and I would love to work on a matter related to World War II looted art.
ARCA Blog: Would you advise clients to document the history of ownership of their objects?
Leila: Certainly, it’s very necessary, and it’s a rule that I follow myself. As an art collector, I always research a piece’s history, and I keep dated receipts and information about where I purchased an object. It is necessary for clients to research the history of an artwork. If there isn’t a history attached to the piece, then purchasers should keep all current records: receipts, information about the seller of the object (whether it be a business card or name of the seller), etc.
ARCA Blog: In negotiation contracts between galleries and artists, what are some of the main concerns that have to be addressed?
Leila: As you can imagine, the artists are most concerned with their art. They need to be guaranteed that their art will be safe and protected against theft, fire, and damage. In addition, they need to be ensured that they will have unsold items returned and that they will receive proper credit for their work. And artists need to feel comfortable with their agents and galleries—they must know that these individuals respect their art and their craft.

On the other hand, gallery owners are most concerned about having products delivered to them. Artists have the reputation of being unreliable, and gallery owners need contracts that specifically set out dates and deadlines to ensure that artists deliver their works safely and securely with enough time for the galleries to properly organize shows.
To read more about LLE, you may visit their website: http://www.lysaghtlaw.com/.

November 3, 2010

Wednesday, November 03, 2010 - ,, No comments

ARCA Alum to speak at Sotheby's Institute of Art

Leila Amineddoleh, Class of 2010 in ARCA's postgraduate program, is presenting a 1-hour overview about art law on Thursday, November 4th, from 8:30 a.m. to 9:30 a.m. at Sotheby's Institute of Art (570 Lexington Ave.) The event is held by the New York State Bar Association's Entertainment, Arts & Sports Law Section. Further information may be accessed at:

http://nysbar.com/blogs/EASL/2010/10/morning_lecture_series_breakfa.html

June 3, 2009

Wednesday, June 03, 2009 - ,,,,, No comments

The Art Market: How Lending Fuels Art Crime


ARCA is pleased to present a series of papers written by graduates of Noah Charney's course on art crime, taught at Yale University in the Spring of 2009. The following article was written by Elizabeth Sebesky.

The Art Market: How Lending Fuels Art Crime

Introduction
The term “art market” is a contradiction in terms. The act of turning art into commodity, into a form of collateral or financial asset, fights against the instincts of art lovers, who cherish its priceless, intrinsic value. However, Iain Robertson, Head of Art Business Studies at Sotheby’s in London, points out in his monograph, Understanding International Art Markets and Management, that even though “art and money might still seem like uncomfortable bedmates, […] the relationship is sacrosanct.” The psychology that fuels the acquisition of material wealth also drives art collection: “the acquisition of art, a tangible ‘consumption good’ with ‘social capital’, is also seen as a positive addiction.” Furthermore, the characteristics of art crime are quite similar to those of financial over-extension to the point of bankruptcy and white collar crimes, such as investment fraud, security fraud, and money laundering. In fact, Interpol has recently reported that “financial crime[s] such as money-laundering” are believed to be “intimately connected in many cases [with] the drugs, arms and the illicit art and antiquities trades.” Although there are many overlaps between art crime and national and international financial markets, the impact of art lending companies, that turn art into collateral, has been relatively unexamined and is pertinent today and in other times of economic downturn. By presenting a case study on the recent upsurge in this financial practice, pointing out some of the problems and pitfalls of art lending and the art market more generally, and then recommending some preventative measures and solutions, this paper will help raise consciousness on the ways in which art lending practices can contribute to and enable art crime.


The Psychology of the Art Market as It Leads to Art Crime
It is important for art historians and art economists to go beyond a traditional neoclassical economic analysis of the art market when examining art crime. Instead of analyzing common topics such as the distinction between public and private art supply, scholars and professionals in the field must pay attention to both “the extrinsic and intrinsic motivation” of players in the art market and the “dynamics of interaction” between these two motivations. The intrinsic motivation can be defined as psychological attachment to the art itself or what the art represents for the buyer. External motivation connotes the practice of distilling aesthetic value into a pure monetary figure or financial asset. The first step to serious investigation is to put both of these motivations in financial terms, such as “psychic return” and “consumption benefit” respectively. Those who care primarily about “psychic return” are “pure collectors”, who purchase or hold onto artwork due to their personal regard for it and ignore price fluctuations in the market. In contrast, “pure speculators” are more willing to sell their art due to “unpredictable financial risk (price variations) and uncertain attribution” and are most concerned with the art object’s “consumption benefits.” Understanding the psychology behind these “consumption benefits” allows art historians and art criminologists to focus on individual players—such as lenders, dealers, and investors—who all have their personal psychological justifications for criminal actions. 

The Art Lending Company: “Private Banking for the Art World” Recently, news sources, including The New York Times, reported that art lending companies across America have had a recent upsurge in business from art owners, collectors, and dealers, who have decided to leverage their art objects. The most prominent companies include Art Capital Group, Art Finance Partners, Sotheby’s Financial Services, Emigrant Bank’s Fine Art Finance, ArtLoan, and lending services at the “art advisory wings” of large banks such as CitiGroup, Bank of America, USB, and Deutsche Bank. Art Capital predicts that they will make about $120 million in art-related loans in 2009, up $40 million from 2008; Art Finance Partners reports a 40% rise in business over the last six months. Similarly, owner Ray Parker Gaylord of ArtLoan says that he has “seen ‘exponential’ growth in the last year even though it charges interest rates of 18-24%.” Independent companies not attached to big banks are desirable to some clients, who wish to keep their financial affairs especially private or separate from other parts of their personal finances or for those unable to get a loan from bigger art financing companies. The owner of Art Capital, Ian Peck, admits that clients come to them in times of financial trouble—“burned by Ponzi schemes.” Generally, these art lending companies charge 40% of what they appraise the artworks to be worth. Often, they gain full possession of the art objects if their clients default. These statistics indicate the success of this corner of the art market and that it fulfills a real function for art owners in economic trouble. 

Those seeking capital can receive loans that are “asset-based”, meaning they come from temporarily exchanging property (in this case art objects) instead of being credit-based. Across the finance industry, pieces of art are considered “unconventional assets.” Art owners looking for cash have a few options: they can “borrow against” their artwork (fine and decorate arts, antiques, and collectables), receiving what is called a “term loan”; here, the owner can temporarily lend his/her art pieces without selling them outright in order to get money or “liquidity.” Another option that most private firms offer is if an owner knows he/she wants to sell an art object outright, he/she can borrow a certain amount of money based on a “low-end auction estimate” of the price in advance of the sale; this practice allows clients to continue investing while waiting for consignment to occur. Sometimes the art object is not the only object that is used as an asset and is combined with other forms of leverage in a collateral package. Additionally, some of these private companies offer loans for art dealers, based on the value of their industry, and carry out “consignment financing” to provide financial support to dealers so that they can effectively sell their art objects.

A recent article from The New York Times, published on February 23, 2009, “No Banking on Art”, uncovers the private financial situation of the famous photographer Annie Leibovitz, who was forced to do business with Art Capital Group; it is reported that she used her estates, but even more shocking, her “‘copyrights, photographic negatives, [and] contract rights’ existing or to be created in the future” for $5 million of collateral. This opens the door to uncharted territory about lending intellectual property rights in exchange for cash and signals the need for revisions in art law.

Problems 
One of the most pressing issues surrounding art lending companies is that they generally pride themselves on providing confidential service; this lack of transparency translates into the potential for illegal transactions and “grey” territory. Ian Peck, co-owner of Art Capital, describes his business as being “very discreet” and advertises Art Capital as “private banking for the art world.” The New York Times withheld the name of a client of Art Capital, a former investment banker in New York, upon his request, as “he did not want friends to know his financial situation […].” If providing confidential services for clients, who are embarrassed or prideful, becomes too big of a priority for art lending companies, they run the risk of inaccurately keeping records of appropriate transactional documentation and in-house inventories. Within the body of this New York Times article, a few other clients comment on the “legal messiness” that ensues due to the lack of data open to public access; this “messiness” is amplified by the sensitivity of a business where art owners must face losing their prized possessions. In his book, Iain Robertson confirms what the news has been reporting: “the art market’s often covert and secretive buying and selling practices do encourage or at least permit high levels of criminal behavior.”

The high risk behavior that accompanies dealings in the art market facilitates what Patrick Boylan, Emeritus Professor of Cultural Policy and Management at the City University of London, calls “deception crimes.” Boylan reports that “in addition to theft (in the narrow sense), burglary or robbery, the art sector also experiences a fourth significant group of theft crimes, which are usually much more difficult to detect, namely obtain[ing] property or […] financial advantage by means of deception.” These “deception crimes” include forging documents, diverting works of art without proper authority, and money laundering. Clients run the risk of being too confident in these lenders to keep track of their art due to the persona that these private companies adopt and therefore do not impose a third-party monitor. Many of the companies mentioned in this paper purposely take on rich, famous clients such as Veronica Hearst, Annie Leibovitz, and Julian Schnabel for the status of their own business. This preoccupation with status can cause lenders to favor one client’s pieces over another, giving a certain collection favored security measures.

These social interactions and networking tasks may detract from the overall effectiveness of the business: for example, it is important for lenders to research the provenance of objects in their possession in case they were illegally acquired somewhere along the line. If the art lender does not know the provenance of an object, he/she could unknowingly perpetuate the crime by passing it on to an auction house or dealer. As their degree of separation becomes greater, these auction houses or dealers become even more “in the dark.” “Client confidentiality” also makes it easy for sellers to simply not tell the loan company that an art object has a criminal provenance and use a loan to purposely exchange “dirty money” for “clean cash.” Are protective measures in place to prevent this from happening? Furthermore, do these art lenders have the expertise and experience to come up with a monetary amount for Annie Leibovitz’s copyrights and contractual rights: a topic that hasn’t even been well established in the body of intellectual property law? Are they taking her on as a client irresponsibly for status reasons without having adequate legal background? Baird Ryan, co-owner of Art Capital boasts that “because his firm understands the art market better than regular banks, artists can make attractive borrowers.” However, are these lenders within relatively small companies prepared to take on these many different roles? 

Asymmetrical information between the buyer and seller is another way in which a lack of information transparency affects the art market. In Art & Economics, Bruno Frey confirms that art markets are driven “by a strong prevalence of behavioral anomalies” of the buyer and seller, who interact in a subjective manner while conducting business. This leads to disparity in the pricing and the background information or provenance of the art object. In Iain Robertson’s Understanding International Art Markets and Management, Professor Boylan writes a chapter that informs the study of art crime by pointing to ways in which the art market falls short:

Although there are many similarities between the art and financial markets, there are crucial differences, which make pricing art and accounting for risk in the art market much less accurate and effective than in the stock market. The measurement of art returns is subject to unacceptable levels of misinformation, and profits and losses are often shrouded in mystery. Most art businesses are privately owned, small enterprises jealously guarding price information. Client identity is confidential and the buyers prices have paid outside auction are hard to verify. Finally, there is no obvious benchmark for art, which makes risk assessment very difficult.
What Professor Boylan refers to as “unacceptable levels of information” applies to small lending companies, who conceal transactional information. In addition to creating “dark alleyways” where art crimes can occur, this lack of transparency compounds the difficulty of pricing art. The process of liquefying art assets or borrowing money against art objects presents high financial risk to the seller or loan client as well as the buyer or art lending company; this is because the translation of aesthetic value or what Iain Robertson calls “psychological dividends” into dollar amounts is not clear-cut. The seller’s assessment of the economic value of the work takes into account his/her personal regard and taste. In this way, the seller may not get as much money as he/she thinks the art object is worth. Not only is the art object devalued in a humanistic sense, but this exchange into money also paves the way for nefarious activity: art lenders can make a profit off of clients, who default and hand over their objects, by eventually selling the object to a third party auction house or dealer for more than it was originally appraised due to a discrepancy in information exchange. 

Thus, another risky area surrounding art lending companies is the physical storage of the art piece when it changes hands between buyer and seller. Taking on the role of the middle-man, art lenders must use adequately secured storage and gallery facilities when they repossess the art objects from clients that default on their loan payments. There are three areas where the art pieces could be at risk: in transit on the way from the client’s possession to that of the lending companies or from a lending house to an auction house or dealer, in the lending companies’ main facilities/gallery, and in a storage facility separate from the executive offices. In her article for Art & Crime, “Implications of Art Theft in the Fine Art Insurance Industry”, Dorit Straus tracks the number of thefts that occur in certain places; she notes that most thefts do not occur in alarmed museums, but in privately owned locations: out of thefts reported to the Art Loss Registry since 1991, 4,884 have occurred in “private residences” compared to 3,040 thefts in “art galleries and corporations”, 889 in museums, 388 in-transit and 482 in warehouses. Although there are a surprising number of thefts recorded in transit, an even vaster number of objects are stolen from galleries and corporations. 

The New York Times article, “No Banking on Art” that is mentioned in previous paragraphs above describes Art Capital’s headquarters as a swanky building on Madison Avenue previously owned by Sotheby’s that “looks at first like an art gallery.” The reporter goes on to note that “two Warhols, a pair of Rubens portraits of Roman emperors and a pink nude by the contemporary Mexican painter Victor Rodriguez hang on the cool white walls [while] a sculpture of the faun by Rembrandt Bugatti sits on a windowsill in a conference room where transactions are discussed.” It is the mix of art with financial business that is the most disconcerting: should the Rembrandt really just loaf on the windowsill in a conference room? If the lending company chooses to display its repossessed artworks (which are sometimes even put on display and open to the public), it should institute much tighter security measures that are on par with museum-level protection strategies. In addition, some companies, such as ArtLoan, declare that they prefer to make loans on items that are “physically small and thus easy to store or to ship to auction houses and dealers in case of a default.” Due to their size and portability, these small objects are prime targets for theft, vandalism, forgery, and in-house theft. This “pawnshop” atmosphere flagrantly provokes art crime.

Lastly, the storage facilities of art lending companies, similar to what Dorit Straus classifies as “warehouses”, pose potential risk to the companies and to cultural heritage protection as a whole. Art Capital’s website gives clients options to keep their works “in one of [their] secure storage facilities in New York City or displayed in [their] Madison Avenue gallery space.” However, these storage facilities most likely do not have extensive security measures and do not protect efficiently against damage. Straus points out a fact about insured art in warehouses that carries over to the discussion at hand: namely, that “many warehouses provide open storage, allowing multiple artworks from a single collection to be dispersed throughout the warehouse.” Thus, art lenders run the risk of losing or misplacing art on loan due to a lack of inventory control in these open facilities. One necessary question to ask is whether the pieces that are housed in a gallery, storage facility, or in transit, are insured. The objectification of art through business transactions can create an atmosphere over time where company members stop being as cautious with the objects, becoming less concerned about damage, destruction, theft, or misplacement. 

Solutions 
Although this paper has pointed out a few areas of concern in the art market that can lead to art theft, appropriation, and the manipulation of documentation for financial benefit, there are viable solutions for preventing art crime. The first key is to broadcast a public service announcement or information campaign in print, television broadcast, and online reporting that portrays art crimes as tied to the art market to be as serious as white collar crime. In the wake of public outcry over the Bernard Madoff Ponzi scheme, it will be easier to shape the popular conception of art crimes if their implications are compared to the scale of national and international financial crimes. The second part of this information campaign should focus on drawing out the connections between art crime as tied to the art market and organized crime syndicates: in both arenas, money laundering and the use of art as collateral can occur. Linking activity that the public regards as benign, privileged, and elite to that of drug syndicates and organized crime may make the public more conscious of the potential loopholes and dark shadows surrounding art lending companies.

Another prevention strategy that hits at the very essence of most of the problems discussed above is the “de-commodification” of objects that are part of financial transactions. This, of course, is difficult to do because, after all, art lenders and art finance companies make their business turning art objects into temporary or permanent collateral for their clients. However, is there a way to integrate the aesthetic value or “psychic return” of the artwork into the overall assessment of the monetary value? If this is accomplished, this can help deter lenders from participating in immoral (and possibly illegal) greedy behaviors such as selling the repossessed art object for more than which it was originally assessed. Other preventative measures include treating art objects as precious, meaningful cultural objects in promotional material, websites, and in day-to-day interactions with clients. If daily discourse focuses on inherent value aside from numbers, this psychology may deter criminal activity. This is especially important for massive, country-wide impersonal banks with art advisory branches that grant loans. Finally, if an art lender is working with a client that is lending a whole collection or especially a portion of his/her own works (or copyrights), the lender should make it a mission for the client to be able to keep at least some of the items outright, without loaning everything. Additionally, if subjective value is assessed, then some items can be assessed as more important and prioritized to be saved from possible repossession after loan default. According to this alternative strategy, the art financier would give out loans for many “lesser-priced” items (priced according to this subjective, personal scale) instead of a few “high-priced” items and leave out the one “highest priced” (most personally valuable) item. Basically, the art lender would balance the value of the art to the client with the monetary benefit of the art to their company in order to protect against art crime: if art objects are kept with those that love them and therefore practice exemplary safety precautions, the eventual theft or vandalism that could occur if sold to another buyer can be prevented.

These ideas about how to “foolproof” lending companies from participating in art crimes can also come from the advice of specialists who seek to revamp art investment or art insurance practices. For example, just as art lending companies offer money for art, art insurers provide cash for a stolen object, which “offers some consolation, [but] […] never equal[s] the return of the actual objects.” Therefore, art lending companies should follow the same philosophy as art insurers: that “it is thus in the best interest of both public and private collections to undertake the necessary precautions to evaluate their situation with an eye towards preventing theft.” One of these “necessary precautions” is the insurance underwriting process, which assesses areas of risk to the artwork and develops prevention strategies. Dorit Straus holds up the National Endowment for the Art’s Arts Indemnity Program as an esteemed example of how efficient underwriting and risk prevention are used to “exceed even the private sector’s insurance and industry review and diligence in risk assessment.” Perhaps the National Endowment for the Arts can serve as an example to art lenders who can apply similar strategies to their “at-risk” areas such as storage spaces, galleries, and transit vehicles. Being conscious of the risk, coming up with strategies, and taking inventory of objects, are all first steps to the proactive prevention of art crime.

Art lenders can also learn from advocates of art investment reform. The art market requires an overseeing board, an umbrella organization that maintains transparency, keeps records in the public eye, and serves as a watch-dog. David Kusin, founder of Kusin & Co., an economic research firm, recommends revamping the art market by reorganizing the board of directors of various institutions and “replac[ing] the socially connected members with independent, seasoned operating executives from other sectors to improve governance.” This non-partial overseeing board could be in charge of monitoring how art is handled during financial transactions and managing the tenuous and sensitive process of converting art into monetary value, whether as collateral or as investment.

In addition to creating an overseeing board of directors, David Kusin recommends creating both a “standardized nomenclature” and “a statistically based system for capturing sector-wide transaction data in real time” for the art market. Although Kusin focuses specifically on bettering art investment in his article, these improvements can successfully inform art lending practices. Even though Kusin postures himself in this article as looking to the future when the global capital market will rebound, these changes need to be implemented right away; these measures will not only eventually respond to a thriving market, but will also improve the transparency and structure of art finance along the way. In “The Current and Future Value of Art”, Iain Robertson suggests a similar solution: the construction of an “art index” that offers comprehensive, real-time information. He notes that six dominant global indices (including the All Art Index, the British Art Market Research, the Standard & Poor 500, the American Mei/Moses Index, the Art Sales Index, and the French Art Price Index, “only offer partial price information.” He points out the importance of “serious attempts [that] are being made to bring transparency to the art market and to create indices against which international, not just industry, investors and speculators can bet.” Not only will this improve transparency of information throughout the industry, but it will also provide realistic, accurate information that may deter investors, who do not have the means to invest in art. Additionally, an accurate assessment of the risk will prevent investors from being victims of fraud. The bottom line is that the greater the financial risk and the higher the stakes, the worse it is for the fate of that art object. If information in the art market becomes just as transparent as other financial sectors, then art objects will be at less risk for being misplaced, stolen, or illegally bought as a result of investment Ponzi schemes. David Kusin warns wisely that such overarching operational “systems don’t create monopolies, disclose propriety intellectual property or reveal operational secrets, [but] the costs of continued failure to build this capacity for the art sector are untold.”

Conclusion
If the suggestions above are applied to art lending practices, the probability of art crimes occurring within the art market will most likely decline. Furthermore, these preventative measures can and should be implemented more comprehensively throughout other aspects of the art market, such as art investment, art insurance, financial bankruptcy as it applies to art, and white collar crimes, such as securities fraud, embezzlement, and money laundering. In turn, the further study of how art crime is closely tied to all of these aspects of the financial market will raise consciousness about the importance of art crime and how simple it is to stop by reforming certain elements of financial transactions. This paper has touched on several practices recommended by art insurance agents, economic scholars, and art investors and has applied them to solutions for “fool-proofing” art lending. However, this is a topic that should be explored further. It is important for all players in the art finance industry to work together to revamp these practices and to pay attention to how they as individuals help to fuel art crimes. 

The implementation of these suggestions will help improve the fiscal health of the art finance sector overall, allowing art collectors, artists, and dealers, who wish to hold onto their art objects, to avoid turning to art lenders for capital as frequently. This will help to lower the art crime rate by keeping prized possessions with those that prize them on a personal level. On a psychological level, when fiscal health improves, those participating in the art market will inevitably feel less anxiety and embarrassment when no longer required to use art (or as much art) for capital. And, happiness directly affects art crime rates. Of course, ironically, this hypothetical scenario seems to benefit most everyone in the art industry except the art lending companies themselves. However, this presents a good problem for the art world: perhaps these companies can target their businesses around “consignment financing” for art dealers, to keep money moving, and around art advising for collectors and dealers. In this way, instead of primarily granting loans and exchanging art for money, art lenders can help clients maintain their personal financial health in order to keep and protect their art.

Written by Elizabeth Sebesky

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