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Howard Spiegler's Recovery of  Art Stolen by Nazis Made Into A MovieHoward Spiegler, Beta Pi ’69, and his partner, Larry Kaye, at the New York City law firm of Herrick, Feinstein LLP, were instrumental in bringing ground-breaking legal proceedings to recover the Egon Schiele painting, Portrait of Wally (Wally), that had been on display at the Museum of Modern Art (MoMA), on loan from the Leopold Museum in Austria. 

The landmark legal proceedings and the resulting settlement, full monetary restitution and significant concessions regarding future Wally exhibitions, have been made into a documentary style movie, Portrait of Wally, that has recently appeared on the Cinemoi network (Fios station 236). 

The Factual Background 

The documentary begins with a riveting portrayal of the disturbing era in Germany and Austria leading up to World War II. Fervent public support for the Nazis in these two countries was depicted in the film and clearly showed the Anti-Semitism that existed at that time by the Nazi government and its supporters. Businesses, real estate, and personal property belonging to Jews were “aryanized”, taken over and/or confiscated, in Germany and Austria. In particular, valuable artworks were seized by the Nazis and their collaborators. 

Among the many works of art confiscated was Portrait of Wally, a painting by the young artist, Egon Schiele, belonging to Lea Bondi (Bondi), a Jewish art dealer in Vienna, Austria. The documentary spent considerable time showing the art of Schiele, who died at the age of 28, but Wally was the focus of the film. It explained how Wally was taken straight off the wall, by duress, without compensation, from the home of Lea Bondi. Bondi was forced to sell her art gallery to a Nazi art dealer, Friedrich Welz. When Welz went to Bondi’s home, he demanded that Wally be given to him or Bondi and her husband would face dire consequences. Wally was her private property. Around that time, Welz “aryanized” the art collection of another Jewish art collector, Dr. Heinrich Rieger, that included many Schiele art works. 

After the war, United States soldiers arrested Welz and his art collection was handed over to the Austrian government pursuant to an existing international agreement that stolen art was to be returned to the country of origin. That country’s government would then decide who was the owner and what restitution, if any, would be made. After World War II, for political reasons, the U.S. government treated Austria as a victim, not an ally, of Germany. This was an attempt to make Austria friendly to the U.S. in hopes to shield Austria from Soviet influence. The very same Austrian government and citizens, that whole-heartedly aligned itself with the Nazis, greeted the German army with parades and rallies of support, stood by as Jewish citizens were sent to concentration camps, and “aryanized” Jewish businesses and property, were now given the responsibility of determining restitution to Jews. 

As Bondi sent letter after letter to recover her property, the Austrian government ignored the actions of Austrian art dealers and institutions to obscure true ownership of Wally by claiming that it was actually named Portrait of Wife, a Schiele work that had been in the Rieger art collection, that had been acquired from the Rieger family by the Austrian National Gallery in the Belvedere Castle (Belvedere). The Austrian government knew ownership was contested. The Austrian government also was aware that Wally was a painting, whereas Portrait of Wife was a drawing, and the model for Wally was not Schiele’s wife. The U.S. military had indicated to Austria that the painting did not match the description of Portrait of Wife. Yet Austria disregarded Bondi’s letters and approved the sale to Belvedere. When Bondi enlisted Dr. Rudolf Leopold (Leopold), an Austrian collector of Schiele works, to intervene on her behalf with Belvedere, Leopold traded one of his Schiele paintings for Wally. He then kept Wally for himself. As Jewish claimants of stolen works of art had been wholly unsuccessful in receiving restitution from the Austrian government, Bondi declined to bring an action in Austrian courts. She died in 1969. 

Wally became part of the Leopold Collection that was the basis for the newly built Leopold Museum. Despite the fact that the Austrian government provided significant funding for the creation of the Leopold Museum, and that the Austrian government was entitled to appoint half the trustees on the Leopold Museum Board of Trustees, the Leopold Museum was classified by Austria to be a private museum. In 1997, the Leopold Museum loaned many Schieles, including Wally, to MoMA. 

The Legal Proceedings 

Enter brother Spiegler and Larry Kaye. Learning that Wally was in New York City, the Bondi heirs hired the law firm of Herrick, Feinstein LLP, on a contingency basis, to recover Wally. Formal demand was made to MoMA not to return Wally to Austria until Bondi ownership could be established. If Wally was returned to Austria, chances of restitution in Austrian courts would most likely be impossible. 

MoMA stated its intention to return Wally to the Leopold Museum in accordance with the written contract of loan. Of further hindrance was a New York State (N.Y.S.) statute making not-for-profit museums in N.Y.S. exempt from seizures of art works. However, upon request by the Bondi family, N.Y.S. District Attorney Robert Morgenthau was convinced to issue a subpoena for the painting as part of his office’s investigation as to whether Wally was stolen property. D.A Morgenthau later declared that his action was the equivalent of a “hail Mary” pass. In 1999, the highest appeals court in N.Y.S., the Court of Appeals, decided that the subpoena was inappropriate and Wally could be returned to Austria immediately. 

Prior to the Court of Appeals decision, attorneys Spiegler and Kaye had approached the U.S. Attorney’s Office in N.Y.S. to ask that the Federal government seize Wally as it was brought into the U.S. in violation of the National Stolen Property Act. The Department head of this office did not indicate any action would be taken. However, within hours after the Court of Appeals decision, a Federal warrant was issued for the seizure of Wally. The U.S. government immediately began a forfeiture action to remove any claim of ownership by the Leopold Museum. If successful, by an agreement with the Bondi attorneys, Wally would be delivered to the U.S. government and then returned to the Bondi heirs. 

Brother Spiegler and Larry Kaye joined with the U.S. attorneys to litigate the case. After discovery was completed, both sides moved for summary judgment. Although the court denied both motions, it made certain findings of fact that strengthened the Bondi claim: 1. Wally had been stolen from Lea Bondi by Welz, 2. Wally was still considered to be stolen at the time Wally entered the U.S.A., 3. There was sufficient evidence that Belvedere knew ownership of Wally was in question due to Lea Bondi’s written statements that she personally advised Belvedere of her ownership. 

The only remaining issue to be litigated was whether Leopold knew Wally was stolen. On that issue, the court decided there was probable cause to conclude Leopold knew Wally was stolen, citing: Leopold’s failure to adequately investigate ownership, Lea Bondi fled Nazi persecution and her gallery “aryanized”, Leopold had no proof that Wally was part of the Rieger collection, Leopold acquired the painting after Bondi told him it was her property, and the written succession of ownership, required by the loan contract with MoMA, shows Leopold altered Wally’s “pedigree” of ownership by adding Rieger’s name. At trial, it would now be Leopold’s burden to prove “by a preponderance of the evidence” that he had no reason to believe Wally was stolen. 

The Settlement 

Leopold never relinquished his claim that he was the owner of Wally. He died shortly before the trial was to begin. Ten years after legal proceedings were initiated and one week prior to the start of the trial, the Leopold Museum was ready to settle. 

The final settlement: 1. The Leopold Museum would pay $19,000,000, representing the current value of Wally, in exchange for the Bondi heirs to relinquish any and all claims of ownership. 2. Wally was to be exhibited at the Museum of Jewish Heritage in N.Y.C. for three weeks before it would be returned to Austria. 3. The Leopold Museum was required to post a permanent sign next to Wally, wherever it is to be exhibited, explaining the true ownership history of Wally. 

Brother Spiegler’s clients can only regard the settlement as a victory. They received full recompense for the value of the painting, permanent and public recognition of the true ownership, and the display of Wally in a museum dedicated to the memory of the victims of the Holocaust. After attorney fees, there were approximately 50 Bondi heirs sharing the settlement, an average of less than $300,000 each. 

Of course, the Leopold Museum and Leopold’s widow, Elisabeth, viewed the settlement differently. Elisabeth Leopold said the settlement confirmed her husband’s contention that he was the rightful owner of Wally. She opined that it was only her husband who cared about the painting and that the Bondi heirs were only in it for the money. Despite the fact that Leopold fought “tooth and nail” to retain possession without restitution, she said it was her husband who wanted to give them the $19,000,000 out of the goodness of his heart because he felt sadly about how the family suffered during the Nazi occupation of Austria. 

The Importance of the Wally Litigation 

This case established a precedent showing museums around the world that works of art stolen by the Nazis can be seized. Governments in Europe re-examined their existing policies pertaining to restitution for works of art stolen by the Nazis. For example, after the settlement, the Austrian government passed a “restitution” law to address this issue. This resulted in hundreds of millions of dollars of works of art being returned to original owners from public museums. As a “private” museum, this law did not affect the Leopold Museum. 

The settlement of the case was not just about ownership. It brought attention to the willingness of governments to ignore the rights of individuals for the greater good of the public. In the Wally case, the public would not have access to viewing Wally if it was privately owned. An example can be found in Philadelphia in regard to the specific instructions of Albert C. Barnes, in his will, that his vast collection of art, valued at 25 billion dollars, could only be on display at his home in Lower Merion Township. The government decided to ignore this bequest. It obtained a court order allowing the Barnes Museum to be built in center city Philadelphia in order to accommodate a greater number of visitors. A documentary, The Art of the Steal, was made that criticized the change of location. 

The Wally case provided a precedent for the U.S. government to allow it to participate in legal proceedings, at great expense, on behalf of a private citizen in a civil case, provided it could show its actions were in furtherance of public policy interests. In the Wally case, U.S. actions were in support of the National Stolen Property Act and were meant to discourage the taking, possession, and receipt of stolen goods. 

The reluctance of MoMA to maintain possession of Wally pending litigation on ownership, despite the evidence that the painting was stolen, was a matter of national disgrace. Nine other museums, and two museum organizations representing museums nationwide, supported the MoMA position by filing an amicus brief. MoMA and these other museum entities took the position that it is acceptable practice to exhibit stolen works of art because returning works of art to the real owners would deprive the public of their enjoyment viewing these works of art. The contention of the Museum industry that art “loans” would come to a halt if art work can be seized is ludicrous. Only “stolen” art can be seized. All works of art should have a verifiable chain of ownership. If it doesn’t, museums can now expect it won’t be available for loan. All other works of art are available for loan. 

Howard Spiegler, “Super Star” Attorney 

Brother Spiegler appeared many times in the final third of the film when the documentary was covering the litigation and the aftermath of the settlement. He commented frequently on the case and was on the dais when the Museum of Jewish Heritage displayed Wally and held a ceremony celebrating the successful resolution of Wally restitution. 

His renown as a trailblazer and legal giant in the practice of art law is well deserved. The sheer complexity of the case due to the passage of time, the gathering of evidence, and recognizing the opportunities and pitfalls of conflicting laws in Austria, New York State, and the United States, shows his resourcefulness, initiative, and creativity. His ability to interpret these laws, apply them to his case, and convince others to take action in furtherance of his clients’ interests, when the likelihood of success was miniscule, is awe-inspiring.