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A woman's fight for her family's art
It's up to the Supreme Court whether a Nazi refugee can sue to retrieve $150
million in paintings now owned by an Austrian museum

By Howard Reich
Tribune arts critic
Published February 23, 2004

LOS ANGELES -- As a youngster growing up amid opulence in Vienna between the
world wars, Maria Bloch-Bauer Altmann took for granted the masterpieces by
Gustav Klimt that were a part of her life.

The two Klimt oil portraits of her extravagantly wealthy aunt, Adele
Bloch-Bauer, were famous across Europe, but to Altmann they were just
beautiful images bathed in shades of gold and bronze, hanging alongside
other works in Adele Bloch-Bauer's home at Elisabethstrasse 18, where she
visited frequently.

Today, those portraits -- as well as four Klimt landscapes that draw
tourists from around the world to the Austrian Gallery Belvedere -- stand at
the center of the first Holocaust-era restitution case to be heard by the
U.S. Supreme Court.

The case, which the court will hear Wednesday, pits Altmann, who turned 88
last week, against the republic of Austria in a legal battle that's being
closely watched by restitution-law experts, advocates and possible
defendants around the world. In addition, the case has commanded the
attention of federal governments, which see in this contest a potentially
precedent-setting decision on whether a foreign nation can be sued in the
U.S. for property looted in Europe during World War II.

The stakes are high not only because of the value of the art Altmann is
claiming, estimated at $150 million, but also because of the possibility
that this case could open the way to others.

To date, two federal courts have agreed with Altmann, who lives in Los
Angeles, that she, as an American citizen, can sue Austria in the U.S. for
stolen art, under certain provisions of America's Foreign Sovereign
Immunities Act, a legal argument previously untested in U.S. law.

Austria, which has claimed ownership of the paintings since World War II,
appealed to the U.S. Supreme Court over jurisdiction.

To Austria, the particulars of the case, which involve disputes over
interpreting wills and restitution law, have nothing to do with Nazi-era
thefts, though all parties agree that the celebrated Bloch-Bauer art
collection was looted.

"This case doesn't have anything to do with World War II," said Gottfried
Toman, director of the Austrian office of state attorneys, speaking from
Vienna.

"It deals with Austrian law of succession, the right to succeed under a last
will.

"We are willing to face our history, and of course we have to take the
responsibility of this history.

"But you cannot slip under the context of stolen WWII art other things not
related to WWII."

At issue before the Supreme Court is whether the Foreign Sovereign
Immunities Act, which the U.S. passed in 1976 to spell out foreign
governments' rights in relations with the States, can be applied
retroactively to events of the late 1930s and '40s, if particular conditions
are met.

David vs. Goliath

In a David-vs.-Goliath contest, Altmann is being represented by E. Randol
Schoenberg, partner in a two-man Los Angeles law firm. He's also the
grandson of composer Arnold Schoenberg, who fled Germany in 1933, when the
Nazis began their ascent.

On the opposite side, Austria's case will be argued by Scott P. Cooper,
partner in the prominent, bicoastal law firm Proskauer Rose. The U.S.
Department of Justice has supported the Austrian position in a brief, saying
that applying the Sovereign Immunities Act retroactively would harm the
executive branch's ability to conduct diplomacy.

Besides jurisdiction, the parties are clashing over whether a last will
written by Adele Bloch-Bauer in 1923, two years before her death of
meningitis at age 43, requesting that her husband bequeath the paintings to
Austria's National Gallery, amounts to a mere request or a legally binding
order.

Finally, the parties dispute whether Altmann, who escaped the Nazis to
arrive in the U.S. in 1940 and became an American citizen in 1945, can
obtain a fair restitution hearing in Austria, where virtually all of her
family's wealth was stolen and where court fees can reach millions of
dollars.

Sitting in her Los Angeles home near a reproduction of one of the
most-celebrated paintings of the 20th Century -- Klimt's "Adele Bloch-Bauer
I" -- Altmann described the extraordinary household in which this work and
others were on display. Vienna's most illustrious musicians, artists and
other intellectuals routinely converged on the home of Adele and her
husband, Czech sugar magnate Ferdinand Bloch-Bauer.

"They had in their house Gustav Mahler, Richard Strauss, all the great
composers of Vienna in what we used to call a salon," Altmann said.

At the home of Gustav and Therese Bloch-Bauer, Altmann's parents, "there was
chamber music every week, but on the evening of March 11, [1938], after the
music, the chancellor of Austria made a speech on the radio that German
troops are at the border, and it was over. It was the last chamber music and
the last beautiful evening of Austria."

Ferdinand Bloch-Bauer, already widowed, fled to Switzerland. His home was
ransacked by the Nazis, who turned it into a railway headquarters. The
Germans later met with Austrian officials to divide up Bloch-Bauer's art
collection, with Austria's National Gallery receiving the famous "gold
portrait" of Adele, among other pieces. Some of the works were purchased,
though at prices not set by Bloch-Bauer, who did not receive the proceeds.

Altmann, meanwhile, was moved forcibly into an apartment under house arrest
by the Gestapo, which demanded her jewelry and other possessions. Her
husband, Fritz Altmann, whom she had married four months earlier, was sent
to the Dachau labor camp as hostage for family bank accounts, Maria Altmann
said.

Fritz Altmann soon was released from Dachau, after transfers of his assets
to the Germans, and the couple eventually escaped to Holland and then Los
Angeles, Maria Altmann storing in her bra a pair of her aunt Adele's diamond
earrings that the Gestapo had not found.

Maria Altmann's parents also escaped about this time.

Ferdinand Bloch-Bauer was left stranded and destitute in Switzerland
throughout the war.

"In Vienna and Bohemia, they took away everything from me," he wrote artist
Oskar Kokoschka on April 2, 1941. "Perhaps I will get the 2 portraits of my
poor wife [by Klimt] and my portrait. I should find out about that this
week! Otherwise I am totally impoverished." The letter is among thousands of
pages of documents filed with U.S. courts.

Bloch-Bauer never received the paintings, dying shortly after the war and
leaving a last will giving his property to three of his brother's children,
including Altmann.

By 1948, the Bloch-Bauer survivors tried to reclaim the art. Their lawyer,
Gustav Rinesch, inquired of the post-war director of the Austrian Gallery,
Karl Garzarolli, on Jan. 19, 1948, how to proceed, in another document filed
with the courts.

`Forced liquidation'

"Under the Nazis, Mr. Bloch-Bauer's private property was subjected to forced
liquidation and handed over to the Austrian Museum by Bloch-Bauer's lawyer,
Dr. Erich Fuhrer," who had been appointed without Bloch-Bauer's consent. "I
do not know the exact circumstances of this handover.

"I would be grateful if you would inform me how you would respond to my
clients' restitution claims."

Three months later, Garzarolli wrote a letter to the previous director of
the Austrian Gallery, Bruno Grimschitz, chastising him for failing to
establish ownership of the stolen paintings.

"I cannot understand why, even during the Nazi period, an existing
incontestable bequest in favor of a national institution was not taken into
account, by making reference to it or by contacting Mr. Bloch-Bauer, who was
already abroad, via his temporary asset manager. ...

"The situation is turning into a sea-snake. ... It worries me enormously
that so far all the circumstances surrounding the restitution issues are
very unclear."

A month later, the family struck a deal with the Austrian government to gain
permission to export several works of art and to leave the Klimt paintings
with the Austrian National Gallery.

But the family did not see the last wills of Adele and Ferdinand
Bloch-Bauer, Altmann said, until half a century later, when the current case
erupted.

In 1998, the Austrian Culture Ministry opened its archives to researchers
for the first time, after authorities in New York had seized two allegedly
looted Egon Schiele paintings on loan to the Museum of Modern Art.

An Austrian journalist, Hubertus Czernin, dug into the yellowed records and
found documents that Altmann had never seen, including the last wills of her
aunt and uncle and a series of letters between her Vienna attorney and
Austrian officials on restituting and exporting the remaining Bloch-Bauer
property.

Articles cause uproar

Czernin's series of articles in a Vienna newspaper caused an uproar in
Austria, showing how Austria's post-war government allowed survivors and
their heirs to export some artworks only by agreeing to leave others behind
with the National Gallery. The expose led the Austrian government to pass,
later in 1998, a new set of restitution laws.

These rules stipulated that Holocaust survivors and heirs who were forced to
leave behind some property in order to obtain export permits for other
pieces had been wronged and that those deals were null and void. To correct
the situation, Austrian law required that the artworks left behind be
returned to surviving heirs whose claims fulfilled certain requirements.

Once Altmann learned of this development, she initiated contacts with
Austrian authorities to claim the Klimt paintings. An advisory panel
commissioned by the Culture Ministry considered her claim but rejected parts
of it, the ministry deciding in 1999 to return 16 Klimt drawings of Adele
Bloch-Bauer and 19 pieces of Ferdinand Bloch-Bauer's porcelain but none of
the six Klimt paintings.

Because claimants, by Austrian law, are not allowed to participate in the
hearings, Altmann took her case to court in Austria. But in Austria, as in
many European countries, the court levies fees according to the value of the
property being contested, which meant that Altmann would have to pay between
$1.5 million and $2 million to have her case heard. (She would get the money
back if she won in court.)

Her lawyer, Schoenberg, managed to get the fees reduced, but Altmann said
she still could not afford to lose it.

Moreover, because Austrian authorities declined to waive
statute-of-limitations arguments that might be used in the case, Altmann
said, she thought that she did not have a reasonable chance to succeed in
Austrian courts, so she sued in California.

A U.S. District Court in California ruled in 2001 that Altmann's case could
be heard in the U.S. under the Foreign Sovereign Immunities Act because she
had established a "substantial and non-frivolous claim" that her family's
property was taken in violation of international law twice: first during the
Nazi era and next in 1948, when Austria required the paintings be "donated"
in exchange for export permits.

In addition, the court said that because the artworks are "owned or
operated" by an agency of a foreign state (the Austrian National Gallery)
and because that institution conducts commercial activity in the U.S., it
can be sued here.

A U.S. Court of Appeals upheld that ruling in 2002.

Though the U.S. passed the Foreign Sovereign Immunities Act in 1976,
allowing suits here against foreign governments under certain circumstances,
the statute can be applied retroactively because of previous case law,
Schoenberg said.

"There's a long line of sovereign immunity cases in the United States, going
back to the early 1800s, in which a distinction is made between essential
government property and functions that cannot be contested and non-essential
government property that can be," Schoenberg said.

To Austria, however, the 1976 date of the Foreign Sovereign Immunities Act
renders a suit over actions taken during the 1930s and '40s outside the
scope of the law.

"The U.S. Supreme Court law is very clear on this subject," said Cooper.

As to the federal court's finding that Altmann could sue in the U.S. because
Austrian court fees were "oppressively burdensome," Cooper said the issue is
irrelevant, and the court erred.

"The Austrian system, like all of the European court systems, is very
different from ours," Cooper said. "That doesn't necessarily make it unfair,
just because it's different.

"And that's not an argument for the United States courts to accept
jurisdiction over claims that are outside their jurisdiction. In other
words, the mere fact that it would be expensive to litigate overseas has
never been a reason for the United States courts to accept jurisdiction over
cases that are outside the proper purview of our courts."

Interpretation of will

Regarding the merits of the case, both sides agreed that a great deal hinges
on the interpretation of Adele Bloch-Bauer's will, which is one of the
documents filed with the court.

It states, "I ask my husband after his death to leave my two portraits and
the four landscapes by Gustav Klimt to the Austrian State Gallery in
Vienna."

Professor Rudolf Welser, an Austrian authority on succession of property,
said in a legal opinion submitted on Altmann's behalf that Adele Bloch-Bauer
in her will "simply expressed a wish" to leave the portraits to the National
Gallery that is "non-binding."

Austria disagrees.

"You must understand the following: The family Bloch-Bauer was a very
well-known noble family," said Toman. "In high society, you have of course a
different language.

"Would someone in high society say in a will, `I order my husband to do the
following?' Or would they put it in the wording of a request?

"There is no doubt at all in my understanding as a lawyer that she, at this
time, was doing two things. She was speaking about her property and making a
legacy."

To Altmann, this interpretation of the will is particularly galling.

"They are stating a case based on a lie," she said. "And remember that Adele
Bloch-Bauer died long before the war.

"The thought that she would have wanted to have left the paintings with the
Austrian Gallery after what this country did to our family is out of the
question, anyway."

To Austria this art is worth fighting for.

"We are really speaking about a very important cultural heritage," Toman
said, "which is why these paintings are important for Austria."

"There are hundreds more cases in the archives," Czernin said. "This is not
the last case Austria will have to deal with."

- - -

Paintings at center of legal dispute

Los Angeles resident Maria Altmann is suing the Austrian government in U.S.
court to reclaim her family's artworks stolen by Nazis and held by Austria.

A timeline of the case:

BEFORE WWII

1907: Gustav Klimt paints a portrait of Adele Bloch-Bauer.

1925: Adele Bloch-Bauer dies of meningitis at 43.

1937: Maria Bloch-Bauer marries Fritz Altmann.

DURING THE WAR

1938: Germans annex Austria. Maria Altmann flees, escaping eventually to Los
Angeles. Her uncle, Ferdinand Bloch-Bauer, flees to Switzerland. Nazis seize
property of Altmann and Bloch-Bauer families.

1945: Ferdinand Bloch-Bauer rewrites his will, naming Maria, her sister and
a brother as heirs. He dies penniless in Zurich.

EARLY RECOVERY ATTEMPT

1948: Trying to reclaim some of their art, Bloch-Bauer's heirs agree to
relinquish claims to the Klimt paintings.

CURRENT LAWSUIT

1998: A newspaper expose on how Austria forced Holocaust survivors to
relinquish properties in order to retain others causes the government to
revise its restitution laws.

1999: Altmann attempts to reclaim her family's artworks, but does not get
the Klimt paintings.

2000: Altmann sues Austria in U.S. District Court.

2001: The court rules in her favor.

2002: U.S. Court of Appeals upholds the ruling.

Sources: Court documents, news reports, Tribune interviews

- - -

Key arguments in the case

Maria Bloch-Bauer Altmann VS. Republic of Austria

Case jurisdiction

Maria Bloch-Bauer Altmann: Belongs in United States.

Republic of Austria: Belongs in Austria.

Last will of Adele Bloch-Bauer

Maria Bloch-Bauer Altmann: Merely a request that is not legally binding.

Republic of Austria: An order requiring that paintings be given to Austrian
National Gallery.

Will of the widower Ferdinand Bloch-Bauer

Maria Bloch-Bauer Altmann: Paramount in determining ownership of paintings.

Republic of Austria: Irrelevant in determining ownership of paintings.

How the Austrian National Gallery obtained the Klimt works

Maria Bloch-Bauer Altmann: The Bloch-Bauer family was forced to relinquish
claims on Klimt works after World War II in order to recover other property.

Republic of Austria: The Bloch-Bauer family willingly donated the works
after WWII.

Sources: Court documents, news reports and Tribune interviews

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