Art Institute defends ownership of watercolor that New York prosecutors say was seized by Nazis

The Art Institute of Chicago in a detailed court filing Tuesday refuted allegations by New York prosecutors that it is holding on to artwork stolen during the Holocaust, saying there is no evidence Nazis ever seized the watercolor.

The 132-page filing is in response to a motion filed in February by the Manhattan district attorney's office seeking the museum to turn over "Russian War Prisoner" by Austrian expressionist Egon Schiele.

Prosecutors accused the Art Institute of exhibiting "willful blindness" when it bought the piece in 1966 to evidence the work was looted by Nazis from cabaret star Fritz Grünbaum before the start of World War II.

The museum defended its ownership in the latest filing, saying that the district attorney's "theory" that the work is stolen property is "factually unsupported and wrong."

"The core allegations raised by the people — namely that the Grünbaum Schiele collection, including 'Russian War Prisoner,' was 'looted' by the Nazis during World War II — have been the subject of decades of extensive civil litigation and government investigation, in this country and abroad, which has generally reached the opposite conclusion: that 'Russian War Prisoner' was not looted during World War II but was, instead, lawfully sold by surviving family members after World War II," the filing states.

Grünbaum's heirs have for years sought the return of “Russian War Prisoner” and other pieces of his art collection, which they say the performer and songwriter was forced to turn over to Nazi authorities in 1938 when he was sent to the Dachau concentration camp. Grünbaum died there in 1941.

The museum contends Grünbaum’s sister-in-law, Mathilde Lukacs, inherited “Russian War Prisoner” and subsequently sold it along with other of his works in 1956 to Swiss art dealer Eberhard Kornfeld.

But in their filing in February, New York prosecutors addressed that argument at length, outlining a “conspiracy of silence” in which Kornfeld and other dealers laundered artwork stolen by Nazis. It accused Kornfeld of doctoring documents to hide the scheme, including purported correspondence between him and Lukacs.

The Art Institute's motion states there is no evidence to support the claim of a conspiracy and that there is direct evidence that Lukacs sold "Russian War Prisoner" to Kornfeld.

Grünbaum's wife, Elisabeth, was forced to register her and her husbands assets, including his art collection, in 1938 under Nazi law after Grünbaum was arrested. In September of that year, the collection landed in storage at the Schenker and Co. warehouse in Vienna.

Schenker and Co. was an Austrian freight forwarding and shipping company. Multiple high-ranking Nazi officials sat on the firm's board, ensuring Nazi control of the company. Prosecutors said Nazis sold items from that storage facility to fund the war effort.

The Art Institute's motion states there is no reliable evidence to absolutely prove "Russian War Prisoner" was ever in that warehouse. It suggests that it is plausible that Elisabeth managed to transfer some of her and Fritz's possessions, including artworks, to Lukacs and her other family members.

"The asset registration procedure was neither an act of physical seizure and confiscation nor its technical equivalent. [...] there are no records to support the conclusion that such a seizure or confiscation happened here," the filing states.

The Art Institute concedes that Schenker was affiliated with the Nazis but also provided lawful storage and moving services across Europe. The motion points out that Elisabeth's sisters used the same moving company when they fled Vienna in 1938.

"As such, it does not follow, and there is no evidence to support the conclusion, that [Elisabeth's] decision to put the family possessions into storage in September 1938 amounted to a Nazi seizure of the same," the court document states. "There is no evidence 'Russian War Prisoner' was ever physically seized or 'looted' by Nazis."

The motion also defended Kornfeld's credibility, stating that the "discrepancies" in his supporting documents were either "illusory or immaterial."

The Art Institute also singled out previous federal court cases involving Grünbaum's collection that were decided in favor of current owners. In a separate civil case this year, a New York judge reaffirmed the Art Institute's ownership of the piece.

"The evidence clearly demonstrates this work was never looted and was legally acquired, and we will continue to advocate for our lawful ownership of this work," Megan Michienzi, director of public affairs at the Art Institute, said in a statement.