At Last, a $19 Million Settlement for Schiele's Nazi-Looted "Portrait of Wally"

At Last, a $19 Million Settlement for Schiele's Nazi-Looted "Portrait of Wally"

In a settlement resolving one of the thorniest, most prominent restitution cases to stem from the Nazi pillage of Europe, an American judge has ruled that Egon Schieles war-looted "Portrait of Wally" (1912) will remain in the hands of Austria's Leopold Foundation, with a $19 million settlement paid to the heirs of late Jewish art collector and dealer Lea Bondi Jaray. This decision, handed down by U.S. District Judge Loretta Preska, will render unnecessary a planned July 26 trial, in which the New York court was to rule whether or not collector Rudolph Leopold had known that the painting was stolen when he brought it into U.S. territory for a show at the Museumof Modern Art in 1997.

The work, a portrait of Valerie Neuzil, Schiele’s favored model and one-time mistress, was stolen from Jaray by Nazi dealer Frierich Welz, an act justified as a part of the process of "aryanizing" Jaray’s art dealership in 1930s Nazi-controlled Vienna. When World War II drew to a close, U.S. forces — falsely believing that "Wally" had belonged to Heinrich Rieger, who had died in a concentration camp — handed the work over to the Austrian government, who bequeathed the portrait to the Austrian National Gallery.

What followed was a series of hushed up revelations on the part of the national gallery, which did not heed U.S. warnings that the work’s provenance had been falsely identified, and on the part of Leopold, who, when he heard of the museum’s ownership of the painting in 1953, offered to help Jaray retrieve the work — only to renege on his promise, adding the portrait to his own collection instead. Leopold, who died at the end of this June, had made an image of the painting a part of the logo for his Vienna museum, which will now sell off a part of its collection of more than 5400 works to pay the settlement.

The provenance of the work first came into question when members of the Bondi family recognized the work in the 1997 MoMA exhibition, leading to a 1999 seizure of the painting by federal authorities and an eventual 2009 ruling by Judge Preska that the work had, indeed, been stolen.This week’s settlement ensures that from this point forward the work will be displayed in museums alongside signage detailing the painting's fraught history, and will moreover allow New York’s Museum of Jewish Heritage to exhibit the work before it is returned to Vienna.

"Justice has been served," said representatives of the Jaray estate in their announcement of the settlement, reported by the Art Newspaper. "Finally, after more than 70 years, the wrongs suffered by Lea Bondi Jaray are at last being acknowledged and, to some degree, corrected." While it is impossible to tell how the painting, one of Schiele's best-known masterpieces, would fare at auction today, the settlement's $19 million award approaches the $22.4 million record sum paid for a work by the artist at Christie's in 2006. 

But the larger issue of how to determine the provenance and manage the restitution of the staggering quantity of Nazi-looted art still separated from the rightful owners — especially as the original perpetrators or victims of the crimes pass away — is far from resolved. Already, heirs of the Viennese collector Jenny Steiner have spoken out, demanding the return of another Schiele work, "Houses on the Sea" ("Hauser am Meer"), acquired by Leopold in 1955.