FEATURE David L. Hall

Stolen Cultural Property: A Due Diligence Primer

Completing detailed The art dealer has a special deal for you. One that he’s not offering just anybody. Just you. It’s a Cezanne. And the price is $750,000. Cash on homework before delivery. But, you ask, “Why is the price so low? Cezannes have sold for hundreds of millions of dollars.” The reply: “I’m going through a divorce purchasing artwork or and I need cash. For my kids.” cultural artifacts is s this deal too good to be true? Short there are significant incentives to traffick- essential to protect answer: yes. For a longer answer, read ing in stolen art. Failures of due diligence I on. can be costly. Stolen cultural property would-be buyers from In all likelihood, the Cezanne is either might be subject to return (without re- stolen or a forgery. If it is stolen, the seller fund) or even seizure by law enforcement. does not have the right to convey title, so In the worst-case scenario, the failure loss and liability. if you buy it, your title is void.1 More than to verify the suspicious provenance could that, law enforcement authorities might result in criminal charges. Prosecution be suspicious of your role, wondering if for possession or transportation of sto- you are knowingly involved in trafficking len property can be based on a theory of stolen property. And what will the neigh- “willful blindness,” under which knowl- bors think? The longer you look at it, the edge that an object is stolen is imputed less appealing this deal seems to be. to a defendant who consciously closes his Lawyers get involved in transactions or her eyes to facts that would lead a rea- like this in many different ways: some- sonable person to realize the object was times before the fact and sometimes af- stolen.2 ter. Preventing a problematic transaction Compounding the due diligence chal- in the first place is optimal, and the best lenge is the fact that, as a practical matter, means to that end is effective and rigorous the provenance of cultural property of- due diligence prior to acquisition. fered for legitimate sale is frequently im- Provenance and Due Diligence perfect. This is especially true when the Not all stolen property scenarios are as object is old and has passed through many obvious as the Cezanne example above. hands over the years. Records are lost, Lesser-known works and lesser-known witnesses die, art dealers and galleries go artists pose significant hazards, which are out of business. The due diligence chal- compounded by the passage of time. And lenge is significant.

8 DELAWARE LAWYER FALL 2017 Fine Art the Austrian government in U.S. court. Let’s start with fine art. Here are some Ultimately, the case went to arbitration basic questions a buyer should ask before Looting of and the paintings were returned to the buying. plaintiff.5 What is the seller’s basis for ownership? archaeological sites A thorough review of ownership and The prospective buyer should ask the transaction records should be conducted seller for complete documentation (such is an international of any piece of artwork that could have as contracts, invoices, receipts, import and been plundered by the Nazi regime. export records, bills of lading, etc.). These scourge that results Archaeological Works documents should then be verified. While archeological objects pose many If a seller will not comply with this in significant of the same challenges as fine art, there request, or provide a reasonable explana- are some additional concerns that must be tion, walk away. If the seller provides a let- challenges for buyers addressed. ter documenting provenance, contact the Is the object a protected Native Ameri- author of the letter. Then go beyond the and acquiring can artifact? U.S. law protects certain face of the letter and follow any clues that Native American artifacts. The Archaeo- are revealed. If the letter refers to previ- museums. logical Resources Protection Act (ARPA), ous transactions, obtain records of those 16 U.S.C. § 470aa et seq., prohibits remov- transactions. If the parties are still living, ing or damaging “any archaeological re- speak to them directly. Leave no stone un- len Rockwell paintings from a farmhouse source” (as defined) located on federal and turned. in the mountains behind Rio de Janeiro: Native American lands without a permit, Is the ownership of the work disputed? “The Spirit of ‘76,’” “So Much Concern” unless a specific exemption applies. ARPA Determine whether there are any ongo- and “A Hasty Retreat,” worth about a also prohibits trafficking in such artifacts.6 ing disputes over ownership by examining million dollars. The Native American Graves Protec- relevant probate and other court records. Is there any reason to believe the object tion and Repatriation Act (NAGPRA), 25 Obtain records relating to loans or sales might have been looted by Nazis? During U.S.C. § 3001 et seq., also protects Native of the object and interview the parties in- World War II, the Nazi regime systemati- American artifacts, particularly human volved. Identifying issues prior to acquisi- cally plundered art from European muse- remains and burial objects. Among other tion — even if their merit is unclear — will ums, churches and private collections, provisions, NAGPRA requires the return, save anguish and expense in the long run. particularly those of Jewish families. As a under defined circumstances, of Native Has the work been reported stolen? result of the enormous scope of this ef- American human remains and artifacts.7 Query stolen art databases, including the fort, a significant number of stolen works FBI’s National Stolen Art File, INTER- Violating NAGPRA is a federal crimi- in the market today are among those POL’s stolen-works-of-art database and nal offense under 18 U.S.C. § 1170, and 3 the Art Loss Register. Survey dealers and looted by the Nazis. In addition, many may trigger a variety of other federal crim- others who participate actively in the mar- questionable works of fine art, while not inal liability including under 18 U.S.C. § ket for that type of work. Check public plundered by the Nazi regime directly, 641 (theft of government property), 18 resources available through the Internet were acquired from Jewish owners under U.S.C. § 1361 (damaging government and news services. These resources are not duress for a fraction of their value. Acquir- property), 16 U.S.C.A. § 710 (Migratory comprehensive, as they are based on thefts ing such works is obviously to be avoided. Bird Treaty Act), 18 U.S.C. § 1163 (theft that are reported to authorities, but they One prominent example of this par- from a tribal organization), and 18 U.S.C. are worth checking. ticular peril is Republic of Austria v. Alt- § 2314 (interstate transportation of stolen 4 8 Here is an example from my experi- mann, the basis for the movie Woman in property). ence as a federal prosecutor. In 1978, Gold. In that case, the ownership of sever- Does the object originate from a foreign seven Norman Rockwell paintings were al paintings by Gustav Klimt (1862-1918) nation? Looting of archaeological sites is stolen from a gallery in Minneapolis. The was at issue. The plaintiff claimed the an international scourge9 that results in police and FBI were called but the thieves paintings had been owned by her uncle, significant challenges for buyers and ac- were never arrested. Years later, in 1999, who fled Austria prior to the Nazi invasion quiring museums.10 This problem is truly FBI Special Agent Bob Wittman received of 1938, leaving the paintings behind. global in scope.11 Some recently looted a call from a Philadelphia art dealer who She alleged the paintings were seized by sites, notably in Peru and Iraq, are so ex- was suspicious about two Rockwells he the Nazis prior to being acquired by the tensive they can be seen from space.12 had for sale on consignment. Austrian Gallery. The Austrian Gallery Proving that an object of cultural FBI records showed that the two contended that the paintings had been property has been looted can be factu- paintings were among the seven stolen bequeathed to it by the plaintiff’s aunt. ally challenging because no inventory of in 1978, but they had not been identified The plaintiff filed suit, first in Austria, underground archaeological objects ex- as such in any public database. Bob and I and then in the United States. The case ists. Likewise, because looting has been investigated the consigner, a Brazilian art made its way to the U.S. Supreme Court, so widespread and ongoing over the years, dealer. In the end, we recovered three sto- which ruled that the plaintiff could sue there is no comprehensive inventory of

FALL 2017 DELAWARE LAWYER 9 FEATURE looted cultural property. ums.20 Under the CPIA, the U.S. govern- Can the country of origin make a claim? Nevertheless, in evaluating whether an ment can enter into bilateral agreements Even without the aid of the U.S. govern- object might be stolen or looted, buyers and memoranda of understanding with ment, foreign countries can seek the re- acquiring archaeological objects should foreign nations to restrict the importation turn of stolen objects through the U.S. consult resources such as the United Na- of identified antiquities.21 legal system. For example, in 2008, the tions Educational, Scientific and Cultural The CPIA was the basis for the U.S. government of Peru sued Yale University, Organization (UNESCO), the Interna- government’s claim in United States v. seeking the return of many artifacts from tional Council of Museum’s (ICOM) Red Eighteenth Century Peruvian Oil on Can- Machu Picchu.28 The artifacts had been at List and the U.S. State Department Cul- vas Painting,22 which involved two paint- Yale for approximately 100 years — with tural Heritage Center. ings imported into the United States from the permission of the government of Peru, Determining whether an object is loot- South America in 2005. Both paintings, according to Yale. Peru contended they ed can also be legally complex because it which appeared to be cut from their origi- had been loaned to Yale in the early 20th involves the analysis of international trea- nal frames, were provided to a gallery in century and never returned. The case was ties and the laws of the object’s country of Washington, DC, to sell on consignment. eventually resolved by a settlement involv- origin. Many nations, unlike the United The gallery was suspicious of their prov- ing the return of some objects and the States, have laws (sometimes called “patri- enance and they were seized by the FBI. development of a program of academic mony laws”) asserting national ownership The U.S. government filed a complaint cultural exchange.29 of all cultural property that originated under CPIA, obtained an order of forfei- As a federal prosecutor, I was involved within the nation’s borders.13 These na- ture and returned the paintings to Peru.23 in a similarly complex case involving Peru- tions classify cultural objects removed Another basis for a U.S. government vian antiquities. A U.S.museum acquired without permission as stolen property.14 claim against an object is the National a gold Moche monkey head (circa 300 In addition to cultural property own- Stolen Property Act (NSPA),24 which A.D.) from a benefactor. The provenance ership laws, many countries also have makes it a crime to knowingly transport of the monkey head was weak and con- strict export laws for cultural artifacts; in a stolen object worth more than $5,000 tradictory. Our investigation showed that fact, some countries prophylactically ban across state or international boundaries. the monkey head had been looted from exports of certain kinds of cultural prop- The leading example is United States v. the royal tombs of Sipan and Peru asserted erty.15 An object brought to the United Schultz,25 a federal criminal prosecution ownership as part of its cultural heritage. States in violation of these laws will be against Frederick Schultz, a prominent Due to the passage of time from the ac- considered (by the country of origin) to antiquities dealer in New York. Schultz quisition of the monkey head, I was faced be an illegal export and might be consid- and a British confederate, Jonathan Toke- with significant statute of limitations and ered an illegal import as well. ley-Parry, conspired to smuggle artifacts laches issues. The museum was faced with Was the object stolen from a foreign mu- from Egypt to the United States through the fact that it owned looted property, seum? One particularly egregious example Britain, where they were altered to ap- which was inconsistent with its values. of museum theft is the pillaging of the pear to be part of a fictional early 20th- In the end, a settlement was reached un- Iraqi National Museum of Antiquities im- century collection called the Thomas Al- der which the museum voluntarily sur- mediately after the fall of Saddam Hussein cock Collection. Egypt has a patrimony rendered the monkey head, which was — estimated by author Roger Atwood to law under which artifacts like those traf- returned by the U.S. government to the involve the theft of 13,000 objects.16 Of ficked by Tokeley-Parry and Schultz are government of Peru. course, not every museum theft is so well considered the property of the Egyptian Conclusion publicized and cultural property removed government.26 Tokeley-Parry was success- The presence of stolen cultural prop- from museums sometimes enters the fully prosecuted by British authorities and erty is the marketplace is sufficiently com- market long after it was stolen. Cultural Schultz by U.S. authorities. monplace to justify rigorous due diligence property stolen from museums is gener- There are other statutes under which prior to acquisition. The practical issues ally more easily identified than looted the U.S. government has sought forfeiture associated with identifying satisfactory artifacts, but the ease of identification in addition to, or in combination with, provenance are significant. But the cost depends on the quality of the museum’s the NSPA and the CPIA. These include of due diligence is more than justified by record keeping, which is highly variable. 19 U.S.C. § 1595a and 18 U.S.C. § 545, the avoidance of a negative outcome in the Is the object subject to seizure by the U.S. which authorize seizure and forfeiture of market — or worse, at the hands of law government? A number of import restric- merchandise imported into the United enforcement. X tions can result in stolen cultural property States “contrary to law.” In these actions, being seized by the. U.S. government for the artifact at issue is usually first seized This publication is a summary of legal prin- return to the country of origin.17 One of by the U.S. government, which then files ciples. Nothing in this article constitutes legal these is the Convention on Cultural Prop- a lawsuit against the object itself (as op- advice, which can only be obtained as a result erty Implementation Act (CPIA),18 which posed to the object’s purported owner). of a personal consultation with an attorney. implements the 1970 UNESCO Conven- If the government prevails, the object is The information published here is believed tion and allows the U.S. government to forfeited, meaning that the government accurate at the time of publication, but is restrict imports of certain cultural proper- takes exclusive title, usually with the goal subject to charge and does not purport to be a ty,19 including objects stolen from muse- of returning it to the country of origin.27 complete statement of all relevant issues

10 DELAWARE LAWYER FALL 2017 6. See 16 U.S.C. § 470ee. Cultural Property Import Restrictions Currently NOTES 7. See 25 U.S.C. § 3005. Imposed by the United States of America,” February 2013, eca.state.gov/files/bureau/ 1. “Void” title can be contrasted with “voidable” 8. See generally Judith Benderson, Executive chart-of-import-restrictions.pdf. title. Under this doctrine, a party who acquires Office for U.S. Attorneys, Native American 14. Leah Weiss, “The Role of Museums flawed — and therefore voidable — title to Artifacts: The Archaeological Resource Protection in Sustaining the Illicit Trade in Cultural property does not automatically lose title when Act and the Native American Graves Protection Property,” 25 Cardozo Arts & Ent. LJ 837, 843 the flaw is discovered. The acquiring party might Act, https://www.justice.gov/sites/default/ (2007). defend title on the ground, for example, that files/usao/legacy/2010/07/26/usab5804.pdf. 15. Robert K. Paterson, “Moving Culture: The he or she is a “good-faith purchaser.” Generally 9. Matthew Bogdanos and William Patrick, Future of National Cultural Property Export speaking, this defense does not apply in the case Thieves of Baghdad (New York: Bloomsbury, Controls,” 18:1 Sw. J. Int’lL. 287, 287 (2012). of stolen property. See Patty Gerstenblith, Art, 2005), 249; Peter Brems and Wilm Van den 16. Atwood, supra note 17, at 1. See also Cultural Heritage and the Law (Durham, NC: Eynde, Blood Antiquities, 2009, film. www. Bogdanos and Patrick, Thieves of Baghdad. Carolina Academic Press, 2004), 423-24. fandor.com/films/blood_antiquities. 17. Export restrictions might also be relevant. 2. “A defendant may not purposefully remain 10. Robert K. Wittman, Priceless: How I Went Under regulations by the U.S. Treasury ignorant of either the facts or the law in order Undercover to Rescue the World’s Stolen Treasures Department’s Office of Foreign Assets Control to escape the consequences of the law.” United (New York: Crown Publishers, 2010), 82-86. States v. Schultz, 333 F.3d 393, 413 (2d Cir. (OFAC), it would be difficult to return stolen 11. Roger Atwood, Stealing History: Tomb cultural property to Iran, for example. 31 C.F.R. 2003). Raiders, Smugglers, and the Looting of the 560.204 (2014) (Prohibited exportation, re- 3. Michael Bazyler, Holocaust Justice: The Ancient World (New York: St. Martin’s Griffin, exportation, sale or supply of goods, technology, Battle for Restitution in America’s Courts (New 2006). or services to Iran). York: NYU Press, 2003); Robert M. Edsel, 12. Dan Contreras, “Using Google Earth 18. 19 U.S.C. § 2601 et seq. (2013). Monuments Men: Allied Heroes, Nazi Thieves, to Identify Site Looting in Peru: Images,” 19. 19 U.S.C. §§ 2602-2606 (2013). and the Greatest Treasure Hunt in History (New Trafficking Culture, accessed May 5, 2014, 20. 19 U.S.C. § 2607 (2013) (Stolen cultural York: Center Street Books, 2010). www.traffickingculture.org/data/using- property). 4. Republic of Austria v. Altmann, 541 U.S. 677 google-earth-to-identify-site-looting-in- (2004). peru-images-dan-contreras/; Margarete Van 21. Applicable import restrictions can be found at the State Department website: eca.state.gov/ 5. William Grimes, “Maria Altmann, Pursuer Ess et al., “Detection of Looting Activities files/bureau/chart-of-import-restrictions.pdf. of Family’s Stolen Paintings, Dies at 94,” New at Archaeological Sites in Iraq Using Ikonos 22. 597 F. Supp. 2d 618 (E.D. Va. 2009). York Times, February 9, 2011, www.nytimes. Imagery,” AGIT Symposium 18 (2006): 669. com/2011/02/09/arts/design/09altmann. 13. U.S. Department of State, Bureau of See Stolen Cultural Property html. Educational and Cultural Affairs, “Guide to continued on page 24

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