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Kokoschka and Kirchner Works Restituted to Alfred Flechtheim Heirs on Offer at Sotheby’s

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Sotheby’s announced a few more works in its World War I-themed sale within a sale, The Beautiful and Damned. Today’s announcement includes an Oskar Kokoschka and Ernst Ludwig Kirchner work. Each work is being restituted and will be sold with an estimate of between $15 and $20m.

Sotheby’s is honored to announce that two Modern masterworks recently restituted to the heirs of art-world luminary Alfred Flechtheim will highlight our Impressionist & Modern Art Evening Sale in New York on 12 November 2018.

Among the finest examples by their respective artists ever to appear at auction, Oskar Kokoschka’s portrait ofJoseph de Montesquiou-Fezensac from 1910 (estimate $15/20 million) and Ernst Ludwig Kirchner’s compelling Das Soldatenbad (Artillerymen) from 1915 (estimate $15/20 million) both encapsulate the seismic shifts occurring in visual arts during the period leading up to and including the onset of World War I. They also serve as testaments to Flechtheim’s passion for collecting exceptional Expressionist works.

In addition to their inherent art historical significance, both paintings are distinguished by their illustrious provenance and remarkable stories of restitution to Flechtheim’s heirs.  Prior to its restitution earlier this year, Kirchner’s Das Soldatenbadhad resided in the distinguished collection of the Solomon R. Guggenheim Museum in New York for three decades, and in The Museum of Modern Art prior to that. Like the Kirchner,Kokoschka’s Joseph de Montesquiou-Fezensac was voluntarily returned to Flechtheim’s heirs in 2018 by the Moderna Museet in Stockholm. As in the past, the Flechtheim heirs are expecting to use some of the proceeds for charitable causes, and for Holocaust remembrance and education purposes.

Joseph de Montesquiou-Fezensac and Das Soldatenbadwill be on view in Sotheby’s New York headquarters beginning 2 November, as part of our full sale exhibitions of Impressionist & Modern and Contemporary Art.

Lucian Simmons, Sotheby’s Worldwide Head of Restitution and Senior Specialist in the Impressionist & Modern Art Department, commented: “It is an honor to present these two recently restituted masterworks by Oskar Kokoschka and Ernst Ludwig Kirchner at auction this November. While markedly different in subject matter, both works are striking embodiments of the momentous changes developing in visual art throughout Europe at the time, and, as we can see with the Kirchner in particular, a tremendously palpable sense of angst during the beginning of World War I. Painted just after he returned from the war, Das Soldatenbadinstills the viewer with the same dehumanizing sentiments that Kirchner experienced during his enlistment and the frightening anonymity of life as a soldier. In this ferocious anti-war painting, the artist embraces the avant-garde through various techniques: the spatial arrangement of the figures; his unmediated depictions of the body that are divorced from the rigorous constraints of academic painting. In contrast, Kokoschka’s entrancing “soul painting” of Joseph de Montesquiou-Fezensacis an intensive study of personality and expression, one wherein he sought to bring the invisible inside of a person to the surface. These two introspective pictures are united not only by their respective restitutions, but also by the pioneering foresight of Alfred Flechtheim, an innovative figure in his own right and trailblazer in the field of collecting. It is with this rich history that we are delighted to offer this pair of avant-garde canvases in our Impressionist & Modern Art Evening Sale.”

Sotheby’s Is Restituting $12m Schiele in November Sale

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Sotheby’s announced late last week that it would be offering an Egon Schiele work being sold as part of a private restitution discovered by Sotheby’s own researchers. The $12m work will be sold in the Impressionist and Modern Evening sale on November 12th:

Sotheby’s is honored to announce that Egon Schiele’s masterwork landscape Dämmernde Stadt (Die Kleine Stadt II) (City in  Twilight (The Small City II)) will highlight our Impressionist & Modern Art Evening Sale in New York on 12 November 2018.

Painted in 1913, Dämmernde Stadt is one of Schiele’s finest landscapes remaining in private hands, with comparable works now principally found in museum collections. The dreamlike view above the city of Krumau – birthplace of the artist’s mother – documents the pivotal period during which Schiele established his singular and now-iconic visual language, after years of shadowing his mentor Gustav Klimt.

Independent of its art historical importance, the work is distinguished by the remarkable family history it has brought to life. Dämmernde Stadt was purchased in 1928 by Elsa Koditschek, a young Jewish widow living in Vienna. During the course of her harrowing persecution by the Nazis following the annexation of Austria in 1938, the work was forcibly sold in payment of alleged debts to the very person who helped Elsa survive. Sotheby’s will present the work this November as the resolution of a joint and private restitution between the present owners and Elsa’s heirs.

Elsa’s story is told today through an extensive and incredibly rare family archive of correspondence she wrote throughout the war and for years after. However, her heirs had remained unaware of the landscape until recent years, when Sotheby’s research on an unrelated picture uncovered reference to the Koditschek name. Lucian Simmons, Sotheby’s Worldwide Head of Restitution, and Andrea Jungmann, Managing Director of Sotheby’s Austria, initiated a dialogue between the family and the present owners that has ultimately resulted in the present offering.

Dämmernde Stadt is estimated to sell for $12/18 million in the 12 November auction.

DÄMMERNDE STADT (DIE KLEINE STADT II)

The series of large-scale townscapes painted by Egon Schiele between 1913 and 1917 show him working at the apex of his artistic powers, experimenting with elements of composition, color and form that would eventually lead him to Abstraction.

Dämmernde Stadt depicts the small, medieval town of Krumau, the birthplace of Schiele’s mother and one of only two locations that are the subjects of his celebrated landscapes. Referred to by Schiele as the “dead city”, Krumau’s compact configuration was intriguing to the artist, who captured its winding streets and crumbling buildings from perched atop the high left bank of the Moldau river – known today as the Vltava in the Czech Republic.  The result of this radical approach to perspective is a flat pictorial dreamscape that reflects both his highly-personalized interpretation, as well as his emotional and psychological response to the storied town.

These stylistic elements manifest in myriad characteristics throughout the canvas: the boldly-delineated shapes of buildings’ rooftops; twilight cast in a muted palette; and windows aglow with brilliant, jewel-like colors reminiscent of Gothic stained-glass. In looking to a Medieval past, Schiele was aligned with a contemporary strain of Gothic revivalism. However he was also attuned with the artistic movements developing concurrently across Europe at the time. His adoption of the high viewpoint and his growing sensitivity to formal relations suggest that he was looking at the work of Post-Impressionist artists, such as Vincent van Gogh and Paul Cézanne. The influence of Klimt’s experiments with form, and the square format in particular, are also apparent in the present work.

Who Is Stealing China’s Cultural Patrimony from Western Museums?

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Of the 10 million objects estimated to have been looted from China during the Century of Humiliation from 1840-1949, only a fraction have been recovered through the art and auction trade. Some extremely notable works like the 12 heads from the Zodiac clock designed for the Chinese Emperor’s Summer palace by a Jesuit priest became celebrated standoffs. A Chinese dealer bid for the two heads included in the Yves St. Laurent-Pierre Bergé collection sale and won. But the dealer refused to pay on principle that the works were stolen. Bergé refused to donate the works to China citing human rights violations by the current regime.

Artist Ai Weiwei picked up on the cultural importance of these objects by creating his own series of Zodiac heads, pictured above.

Christie’s parent company eventually broke the impasse by acquiring the heads and giving them as a gift in 2013. GQ magazine suggests that China might have embarked on a global initiative in 2010 to repatriate looted works with their own extra-legal campaign. According to GQ, a series of robberies at museums in Norway, France and Sweden seem to have been connected and highly targeted:

They often seem to be working from a shopping list—and appear content to leave behind high-value objects that aren’t on it. In each case, the robbers focused their efforts on art and antiquities from China, especially items that had been looted by foreign armies. Many of these objects are well documented and publicly known, making them very hard to sell and difficult to display. In most cases the pieces have not been recovered; they seem to simply vanish. After that first robbery, in Stockholm, a police official told the press that “all experience says this is an ordered job.” As the heists mounted, so did the suspicion that they were being carried out on instructions from abroad. But if that was true, an obvious question loomed: Who was doing the ordering?

The Great Chinese Art Heist (Gentleman’s Quarterly)

The Strange Case of Christos Tsirogiannis

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Bloomberg spent some time with Christo Tsirogiannis, the archeologist who keeps a secret database of illegally exported antiquities. Sotheby’s recent lawsuit against the Greek government was sparked by an object Tsirogiannis identified as suspicious. The greek academic claims to have spotted 50 objects and proudly claims to have “disrupted” $10m in sales.

Tsirogiannis makes no money from his vetting of antiquities auctions. He feels the auction houses should be vetting their objects with the governments of the countries that once produced them; the auction houses feel that would be a cumbersome and inefficient process that might open the door to governments cherry-picking objects from sales. Clearly, there’s a need for an honest broker in between who might be paid by the auction houses and dealers to add value to the antiquities market.

Curiously, Tsirogiannis expressed frustration to Bloomberg that he has made no money from his efforts identifying works that might have been sold illicitly. The auction houses are not shy about their frustration that Tsirogiannis keeps his database secret. The profile makes a big show of the lengths he goes in protecting his data:

More than a decade ago, Tsirogiannis started building a secret archive of tens of thousands of Polaroids and other photos from the artifact underground, where illicitly dug pots and statues are laundered as they pass from tomb raiders to smugglers to dealers and then on to museums, collectors, and auction houses. Most of his images were seized in police raids and given to him by prosecutors in Greece and Italy. Working independently, Tsirogiannis matches the photos with objects that surface at auctions or museums and then works to repatriate the pieces. […] Tsirogiannis takes great caution to keep the images from prying eyes. The archive itself—30,000-plus pictures depicting more than 100,000 objects—is a digital one, taking up a half-terabyte on a server in an undisclosed country in the South Pacific, accessed with passwords he changes twice a week. “There is no actual copy with me or in my house or in my working space,” he said.

“His approach has made auction houses and other dealers take due diligence much more seriously,” said David Gill, a professor at the University of Suffolk who specializes in cultural heritage issues and helped supervise Tsirogiannis’s grad work. Sotheby’s contends that the industry’s due diligence would benefit if the archives were made public. “Regrettably, those materials have been and remain at present completely inaccessible—except to one private individual,” it said in a statement. Bonhams has asked for access to the archive, “to assist the rigorous due diligence that we do for each object in our sales,” said spokeswoman Lucinda Bredin.

Malaysia’s 1MDB Probe Re-Opened After Surprise Election Defeat

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There was a shock election in Malaysia that brought a former leader, Mahathir, back to power. Much of the campaign centered around the conduct of Prime Minister Najib Razak who has been at the center of a multi-billion dollar scandal around the 1MDB development bank from which money seems to have been siphoned.

Mahathir moved quickly to prevent Najib from leaving the country and announced that he would re-open the 1MDB case which was being pursued by Switzerland, Singapore and the US. For the art market, the case has uncovered a number of paintings that were traded at exceptional prices several years ago, especially Jean-Michel Basquiat’s Head of a Madman (above):

Mahathir said he was instructing the auditor-general to remove any restrictions from the Official Secrets Act on publicizing the details of a report into 1MDB, and planned to replace the attorney-general, though he did not name a candidate for the role. The police would submit the report to him and he would study it, he said.

The U.S. Department of Justice claims billions were siphoned from 1MDB, which was set up in 2009 to support infrastructure projects. Najib faced allegations some of 1MDB’s money ended up in his personal accounts before an election in 2013. He acknowledged around $700 million appeared in his accounts but said it was a donation from the Saudi royal family and most of it was returned. He was cleared by the attorney-general of wrongdoing.

New Malaysian Leader Tightens Net Around Ousted Najib Over 1MDB (Bloomberg)

Matthew Green Implicated in Money-Laundering Scheme

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Matthew Green resigned from his father’s art businesses six years ago, according to The Art Newspaper, and recently created a company to trade art. One of his first deals was meant to be part of an avowed money-laundering scheme, the Federal indictment (above) charges. From the court papers, Green was a terrible at money laundering because he charged very little for the huge risk he was taking and left an obvious paper trail that’s been used to indict him.

First, here’s The Art Newspaper on Green’s business:

[He is] the owner of Mayfair Fine Art Limited in London, which was established on 9 October 2017. Green is the son of the well-known London art dealer Richard Green, and was previously a director of Richard Green & Sons Holdings Ltd, Richard Green (Fine Paintings) and Richard Green & Sons Ltd, but resigned from all three directorships in December 2012, according to Companies House.

Then, in February, Green was introduced to a person looking to launder money from an illegal stock scheme. Green proposed selling the person a Picasso for £6.7m which Green would later sell to someone else and then give the person back his £6.7m minus a 5% commission.

Green doesn’t seem to know that price for laundering money is much higher than 5% which definitely isn’t worth the risk if it gets you indicted after being in business all of three months. Worse still, Green and his partners don’t seem to be the swiftest criminals. They boasted that the art market is unregulated but then created a scheme that seems to have had little to do with the art market itself.

The art sale is only one of several money-laundering venues that the person was offered. Offshore banks and real estate deals figure prominently in the indictment. What’s more, Green’s scheme could have been conducted in just about any commercial transaction. And, since the payment for the Picasso was due March 6, 2018, we’ll never know if Green was actually capable of pulling off the sale at the price he claims or would have survived any kind of audit.

Picasso painting offered in money-laundering scheme, US feds say  (The Art Newspaper)

Dealer Fred Dorfman Vulnerable in Jasper Johns Case

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Grossman LLP, a firm specializing in art law, won a court ruling against art dealer Fred Dorfman late last week. Dorfman had been the dealer for James Meyer, Jasper Johns’s former studio assistant who pled guilty in 2014 to interstate transportation of stolenJohns artworks (many of which were unfinished). Meyer received an 18 month jail sentence and was ordered to pay restitution. Of the 83 pieces of art Meyer stole from Johns, Dorfman sold 42 for a total of $9m, including $5.99m in “commissions” for Dorfman. 

Grossman’s client, Equinox Gallery, purchased one of the stolen works for $800,000.  In last week’s ruling, Judge George B. Daniels held that Equinox had adequately alleged the types of activity that can support viable RICO claims, the Court rejected Dorfman’s attempt to paint the alleged plot as “a discrete scheme with a narrow purpose”

“[Dorfman’s characterization of the fraud allegations] ignores the magnitude of Plaintiff’s allegation that Meyer and Dorfman worked in tandem to defraud more than twenty victims over six years to the tune of more than $9 million.” 

Daniels ruling in Dorfman’s motion to dismiss allows Grossman to sue Dorfman for treble damages (i.e., $2.4 million) and attorney’s fees, as well as punitive damages on the fraud and civil RICO claims. According to Grossman, “this is an important ruling in the context of art-fraud cases, given the heightened pleading standard for such claims.”

Ezra Chowaiki Charged

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Ezra Chowaiki has been charged with wire fraud, conspiracy and transportation of stolen property in connection with a kiting scheme the Feds say goes back to 2015. The whole mess was uncovered a few weeks ago when a consignor had to sue to get their de Chriico back from the gallery. Chowaiki filed for bankruptcy revealing $12m in liabilities against $300k in assets. The last two years have been tough for Chowaiki:

The gallery’s revenue plummeted in recent years, court records show. In 2015, the gallery had revenue of $35.2 million. That fell by more than half in 2016 to $15.6 million, according to bankruptcy court filings.

The charges come after Chowaiki’s financial backer, according to Bloomberg, moved to distance himself from the shenanigans:

The gallery’s majority owner is David Dangoor, who wasn’t charged. Dangoor’s attorney, Anthony Dougherty, said in an interview last month that he contacted the New York Police Department’s Major Case Squad after the gallery’s director alerted him to perceived financial irregularities involving Chowaiki.

It turns out Chowaiki was over-selling shares in works like the de Chirico. That includes a Cayman Islands company with connections to an art dealer who does business in Japan who was offered 50% in a work that Chowaiki didn’t own. All of this behavior comes on top of a lawsuit filed by Sotheby’s:

Sotheby’s said it hired the gallery as an agent to purchase the Henri Matisse painting “Titine Trovato in Dress and Hat” for $12 million, which Sotheby’s then planned to resell for $15 million to $20 million. The deal didn’t go through as planned and the gallery ultimately sold the piece for $4.75 million in 2012, with Chowaiki and another partner on the hook to repay the loss, according to the suit.

New York Art Dealer Duped Clients Out of Millions, U.S. Says  (Bloomberg)

The Continuing Confusion Around Art-coin: Art + Block Chain

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Over the weekend, two publications with expertise in markets, economics and enterprises published short items on the use of the potential use of the blockchain to improve art market transactions. Unfortunately, neither item seems have gotten past the most superficial understanding of blockchains—let alone the relationship between the art market and blockchains that we've previously dubbed Art-coin.

Here's the Economist's Espresso blog:

Many see art as the last unregulated market; crypto-currencies such as bitcoin, which permanently record transactions on an open-source database called a blockchain, could resolve concerns about access, transparency and authentication.

Of course, the art market is far from unregulated. The issue with the art market is that it is regulated locally where the transactions take place but not globally where the art often travels. Art transactions are regulated through the global banking system. And much of what observers call 'regulation' in the art market is really wishing for standards of authentication and scholarship that are also local, not global.

The Financial Times goes a step further. Not only does it repeat the misguided comparison of the blockchain to a database—particularly curious when the item links to an FT explainer on the blockchain that explicitly says, "The blockchain is a protocol and does not have the ability to identify parties"—the FT gets lost inside its own mostly-right-but-possibly-for-the-wrong-reasons analysis of the problem.

The potential for the quirky art market seems embryonic at best, despite a thirst for more reliable information. Data are only as good as the person who enters them — plus, according to the Tefaf report, 20 per cent of 673 dealers have no intention even of moving online, so sophisticated fintech solutions seem a long way off.

In short, the idea of the blockchain—when properly understood—is right for the art market. The problems lie first in the blockchain proving itself as a technology. Lots of smart persons are working on this at the moment in a wide-array of domains. Second, with a proven blockchain, there remains a substantial implementation problem in the art market which the FT points to but doesn't seem to fully understand.

More to the point of the Economist's observation is that describing the blockchain as a kind of open-source database isn't really accurate and the use of the database metaphor suggests a kind of transparency that the art market isn't really looking for, no matter what the chatter around the art market says. (AMMpro subscribers can read our discussion of the relevant issues below.)

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Timothy Sammons Faces Extradition to US

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Van Gogh, Cows in a Meadow sold by Timothy Sammons at Sotheby’s in London that is now subject of a lawsuit by its owners

The Daily Mail has unearthed more details on the situation with Timothy Sammons who has been the subject of complaints that he sold work for clients without paying them the funds. Sammons is accused of robbing Peter to pay Paul and taking out loans on art in his possession. But the dealer says his failure to pay is simply because his clients don’t understand how slow the art market is.

The Mail went through the papers from a criminal extradition case to the US where charges have been filed:Continue Reading

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