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    Charting a New Course

    Under the leadership of its founder’s son, Vienna’s Leopold Museum is attempting to identify potential war loot in its collection

    “We base our action on the moral approach,” says Diethard Leopold.

    ©LEOPOLD MUSEUM, VIENNA

    In the years leading up to his death in 2010, Dr. Rudolf Leopold, the patron and director for life of Vienna’s Leopold Museum, was not willing to concede that any of the museum’s artworks should be restituted to the heirs of Holocaust victims. “I’m not a Nazi, and I’m not a Nazi profiteer,” he famously told the Jerusalem Report in 1998. “My family [was] totally against Hitler’s regime.”

    Today, however, under the leadership of Rudolf’s son, Diethard Leopold, a large part of the collection of Austrian modernism is undergoing exacting provenance research to identify once and for all works that were obtained illegally or stolen. According to Diethard, works found to have been looted before and during World War II will be restituted, or suitable compensation will be paid to the rightful heirs to allow the museum to keep them.

    Diethard led the museum’s effort to settle the case of Egon Schiele’s Portrait of Wally (1912), ending a legal imbroglio that began in 1998 with the seizure of the painting, which had been on loan to the Museum of Modern Art, by Manhattan District Attorney Robert Morgenthau. Rudolf Leopold fought Morgenthau, and then the United States government, for more than a decade, in an effort to keep the painting from being restituted to the heirs of the Viennese dealer and collector Lea Bondi Jaray, the owner of the work before World War II.

    Rudolf Leopold died just months before the case was scheduled to go to trial in Manhattan, and shortly thereafter, the Leopold Museum settled the case. The museum gave the Bondi Jaray heirs $19 million in exchange for the painting, which now hangs in a prominent place in the museum next to a plaque that recounts the controversy surrounding it.

    “Justice has been served,” the heirs said in a statement at the time.“ Finally, after more than 70 years, the wrongs suffered by Lea Bondi Jaray are at last being acknowledged and, to some degree, corrected.”

    Diethard Leopold, 56, a psychotherapist in Vienna, took his late father’s seat on the board of the museum and has been organizing exhibitions there since 2006. “When I came to the museum,” he told ARTnews, “I said, ‘This is a problem. Let’s make it our task to approach this topic.’”

    Diethard believes that after years of controversy and protests against the Leopold Museum—in November 2008, members of Vienna’s Jewish Commu­nity wrapped yellow police tape printed with the words “Art Crime Scene” around the stairs leading to the entrance—this is simply the right thing to do.

    “I don’t have any responsibility as a person for what happened in 1938 to 1945, or even after the war,” he says. “I was born in 1956. But still, I’m moved by the destiny and by the life stories of so many people. . . . I think we should come to terms with history.” And, he adds, “Nowadays, I don’t think a museum can afford not to approach this in a proactive and positive manner. What I think sets me apart from many other people of the same positive approach is that I think the best way to deal with it is to talk and to come to a mutually positive conclusion.”

    In addition to the Portrait of Wally settlement, Diethard points to the agreement reached in June with the heirs of Jenny Steiner, who owned Schiele’s painting Houses by the Sea (1914) at the time of the Anschluss in 1938. In the aftermath, Steiner, the owner of a silk factory and a prominent art collector, fled Vienna without the Schiele. She died in New York in 1958. The painting entered the Leopold collection in 1955.

    Last year the Leopold Museum paid $5 million to Steiner’s only granddaughter; this year the museum settled with Steiner’s other two heirs, Daisy Hellmann and Klara Mertens. Although Diethard would not reveal precisely how much the museum paid to them, he commented, “We said we would treat all parties equal; you could infer that it was at least $5 million, but I’m not permitted to say how much more we paid.”

    The museum settled another long-running case in June 2011, when it paid the heirs of Moriz Eisler, an art collector and businessman in what is now the Czech Republic, an undisclosed amount to settle claims the Eisler family made against two artworks by the 19th-century Austrian artist Anton Romako. “Although these works belong without doubt to the Leopold Museum Founda­tion, they were taken from Moriz Eisler and not returned, so it was important to the Leopold Museum to find a settlement,” a museum statement said at the time.

    Diethard says that the museum is also in the process of trying to reach a settlement with the heir of Karl Mayländer, an art collector who was deported to Poland and murdered by the Nazis, regarding five drawings by Egon Schiele. Diethard says he has been negotiating with Eva Zirkl, a Mayländer heir in her 90s who lives in the Bronx, New York. “We offered a reasonable and constructive sum of money” to Zirkl, Diethard says. They are waiting for her response. Zirkl could not be reached for comment.

    The Schiele drawings and the Romako paintings were among those mentioned by a government commission appointed by the Austrian Federal Ministry for Arts, Education, and Culture. The commission, headed by former justice minister Nikolaus Michalek, urged the museum to give up eleven paintings and drawings in its possession, but the government has no control over the museum because it is privately run.

    To pay for these settlements—which come to at least $35 million so far—the Leopold Museum sold another Schiele painting, Houses with Colorful Laundry, Suburb II (1914), at Sotheby’s London last year, where it fetched $40 million, a record price for the artist. The museum has also taken out a loan in the millions of dollars (Diethard would not specify exactly how much).

    “If we can solve the Mäylander case in peace, I think we can then say we put this thing on track,” he says. “It is a process which is appreciated by most people. Then, we will be a normal and wonderful museum—which we are anyway—and hopefully not tainted by these questions anymore.”

    Despite the settlements, however, the Museum still has its critics. Art historian Sophie Lillie, author of Was Einmal War (What Once Was), a handbook of Vienna’s plundered art collections, and a one-time ARTnews contributor, has been monitoring restitution claims against the Leopold Museum for years. She remains skeptical of the museum’s real motives.

    “They did the right thing,” she says, “but they did it because they had to. There was no alternative. So on the one hand, yes, they settled, and I think the settlements in both cases were settlements that the heirs could accept and were good for them. But the way that it’s done, the tone and the spirit, is sort of disappointing.

    “Do I feel that the world has changed and the Leopold is now a partner of restitution? No, I don’t. I think that they did what they did because there was no alternative for them to do this, and they took forever to do it.”

    While Lillie concedes that Diethard Leopold is a “good communicator” and has removed the museum from “the stalemate situation that they were in for many, many, many years,” she says that restitution is about more than just financial settlements.
    Diethard Leopold says he is trying to negotiate settlement agreements where both sides feel they have given something but neither ends up fully satisfied. He believes that both parties now have legitimate “moral rights” to the disputed artworks.

    “We don’t speak of judicial rights because there is no judicial right of the former owners to get the paintings back,” he says. “But we base our action on the moral approach. So they have a moral claim, and so do we. My father collected them many years after the war, most of the paintings, so he owned in good faith too. So there are two owners, two moral claimants. . . . That’s why I say let’s get together and speak, and come to a common conclusion.”

    William D. Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World (Doubleday), is a columnist for Bloomberg View and writes for many publications.

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