How should museums, collectors and governments handle the ever-increasing number of allegations that art in their collections had been looted or was subject to a forced sale during the Nazi era? Museums can restitute art only if presented with solid proof of looting or else they would violate fiduciary obligations to manage their collections in trust for the public. The current wave of claims attempts to expand the definition of “forced sale” to include all property sold as a consequence of the Nazis’ rise to power. If courts hearing pending claims adopt such a definition, the number of art objects potentially subject to restitution could be astronomical. Out of fear, U.S. museums have begun filing declaratory judgments to defeat such claims, and they are asserting technical defenses instead of defending the claims on the historical merits as was contemplated by the 1998 Washington Principles and museums’ ethics codes.
With President Barack Obama in the White House, former Senator Hillary Clinton appointed as Secretary of State and Ambassador Stuart Eizenstat appointed to head the U.S. delegation to the Holocaust Era Assets Conference in Prague June 2009, the administration is about to address the “unfinished business” remaining after President Clinton’s presidency concerning Holocaust era restitution. There will be a particular emphasis on looted art. For a multitude of reasons, it is highly unlikely that an international tribunal to resolve such disputes will be forthcoming. Thus, claimants and present-day possessors will continue to come to loggerheads over the less clear-cut claims, which will lead to additional litigation. This article proposes that the second best solution is to create exclusive jurisdiction over such claims in federal courts while offering protection to bona fide purchasers, which currently is not available under U.S. law, via a stepped-up basis under the Tax Code upon restitution. It also provides for improved access to information for claimants by expanding discovery obligations and providing museums funding for provenance research. Finally, it resolves the thorny conflicts-of-law problem commonly implicated in such cases and offers a refined definition of “looted personal property” that should be subject to restitution.
