By Kat Moynihan.
Hobby Lobby, a privately-held chain of arts and crafts stores that is headquartered in Oklahoma City, Oklahoma, has recently found itself facing a civil forfeiture lawsuit thanks to the actions of the company’s President, Steve Green. An ardent evangelical Christian and founder of the Museum of the Bible, Green began collecting biblical texts and artifacts in 2009. He hired Scott Carroll, an ancient history scholar and Legacy Professor at Our Daily Bread Christian University, as a consultant to advise him with his purchases. Green’s ultimate goal appears to have been to house them in the newly created Museum of the Bible in Washington, D.C., which opened in November 2017. However, before the museum opened, a large purchase landed Green and his collecting on the front pages of newspapers and under the scrutiny of U.S. Department of Homeland Security Immigration and Customs Enforcement, as well as United States Attorneys from the Department of Justice (DOJ).
The Deal
According to a complaint filed in the United States District Court in the Eastern District of New York, in 2010 Green paid $1.6 million for 5,548 artifacts – 1,500 cuneiform tablets, 500 cuneiform bricks, 3,000 clay bullae, 35 clay envelope seals, 13 extra-large cuneiform tablets, and 500 stone cylinder seals. Green purchased the artifacts following a trip to the United Arab Emirates (UAE), where he and Carroll inspected the items on July 15, 2010. The artifacts were sold by an antiquities dealer from the UAE and two other dealers from Israel (“the dealers”). The dealers informed Green that the artifacts belonged to a fourth dealer from Israel who was not present. According to the Complaint, the dealers also told Green that the “objects were acquired in the late 1960s from ‘local markets.’” This and other purchases were sent to the U.S. primarily by the UAE dealer, to Hobby Lobby and its corporate affiliates – Crafts, Etc.! and Mardel, Inc.
To enter the U.S., packages must be cleared by U.S. Customs or a private customs broker. Requirements for the package’s clearance are determined by its value. If the package contains goods that are valued at less than $2,500, it is cleared under Customs’ informal entry process. Imports of value more than $2,500 require Customs’ formal entry process. The formal entry process centers on the completion of CBP Form 7501, which details the package’s country of origin, description, value, etc. This information is also required for clearance of packages sent via international mail, which was used in the case at hand. Under 19 C.F.R. § 1451.11, a description of the package’s contents, the value, and an invoice or bill of sale must be stated on a Customs declaration form. Further, goods must be categorized according to the Harmonized Tariff Schedule (“HTS”) to determine the duty, if any, owed on the package. For example, art works and antiquities must be imported under Section XXI, Chapter 97. Art is imported into the US duty-free. Construction or decorative materials, such as ceramic products fall under Section XIII, Chapter 69 and are subject to duty payments. By choosing the wrong category, sellers and dealers could cheat the duties they owe, and try to pass art and artifacts through Customs undetected, as Customs must clear a large volume of shipments daily it is difficult to thoroughly examine each package. The HTS is admittedly confusing at points, for example, Chapter 69 has a dozen different categories of ceramic tiles – but it is difficult to fathom how someone could decide that an ancient cuneiform tablet falls into the “ceramics” category, rather than the plainly labeled “art and antiquities” category in Chapter 97. Collectors and dealers planning to import antiquities should consult professional customs brokers who are familiar with the HTS to ensure proper codification and compliance with import laws.
Hobby Lobby finalized the purchase in December 2010, when Green ordered $1.6 million to be “wired to seven personal bank accounts associated with five different individuals.” Shipments of the antiquities were sent from November 2010 to January 2011 via international mail. The packages were shipped to Oklahoma City, Oklahoma, and addressed to either Hobby Lobby or its affiliates. The packages were labeled as tile samples and the country of origin was listed either as Israel, Turkey, or not stated at all. Additionally, the value of the packages was not stated. The Complaint alleges that this is problematic because the packages were clearly worth more than $2,000, and thus should have gone through the formal entry process. Following ten undetected shipments, Customs Officers in New York began detaining packages in early January 2011. The first detained package was labeled as containing clay tiles from Turkey and valued at $250. In actuality, the package held fifty cuneiform tablets estimated value of more than $14,000. Four other packages were seized under similar circumstances. On January 19, 2011, Customs seized another five packages, which contained 450 cuneiform tablets and 3,000 clay bullae, or seals.
Worst Practices
In light of the robust practices in place in the U.S. to prevent illicit antiquities from import into the country and into stream of commerce the fact that a large trove of materials was purchased on behalf of Hobby Lobby offers an opportunity for a review of the practices of the collectors, advisors, law enforcement and attorneys working on both sides of the cases involving cultural property.
The circumstances of how these artifacts were purchased and shipped are noteworthy considering Hobby Lobby actually consulted with a legal expert in cultural heritage in preparation for the acquisitions. On July 27, 2010, Hobby Lobby’s in-house counsel contacted Patty Gerstenblith, an expert in cultural property law, author of “Art, Cultural Heritage and the Law” and a chair of the Cultural Property Advisory Committee since 2011. In an interview with the blog Chasing Aphrodite, Gerstenblith commented that she was hired “as an expert and consultant,” and never acted as an attorney. Reportedly, on August 9, 2010, Gerstenblith gave a presentation to Green and his associates that covered general information about legal issues pertaining to the importation of antiquities. In her interview, she also commented that the attendees – including Green and Carroll – had no reaction to her presentation and that she was “mystified” as to why they arranged it. On October 19, 2010, Gerstenblith provided Hobby Lobby’s in-house counsel with a summary of her presentation (which she has declined to release publicly). The summary stated that “the acquisition of any artifact likely from Iraq . . . as carrying considerable risk.” and that “[a]ny object brought into the U.S. with Iraq declared as country of origin has a high chance of being detained by U.S. Customs.” This report was never given to Green, Carroll, nor the other attendees of the presentation.
In addition to going against the recommendation given by Gerstenblith, in the forfeiture petition, federal prosecutor(s) noted a number of red flags that prompted the investigation and emerged during the transaction. Prior to the inspection, Green and his associates were given conflicting information as to where the artifacts were stored. The inspection itself was in a warehouse with the artifacts “spread on the floor, arranged in layers on a coffee table, and packed loosely in cardboard boxes . . . with little or no protective material between them.” Green never spoke to, nor directly paid, the actual “owner” of the artifacts. Last, the artifacts were deeply discounted – $1.6 million out of Carroll’s appraisal of $11.82 million.
The true nature of the antiquities remains a mystery. The Complaint states that “names of people, places, and months” on several of the cuneiform tablets “confirms they originated in Iraq.” It is unclear whether any testing was done regarding the age of the artifacts. As to where the antiquities came from, the dealers provided three conflicting answers. The first was given to Green by one of the Israeli dealers during the inspection in August 2010. Green was given a provenance statement that explained that the objects belonged to the Israeli dealer who was not present, had been “legally acquired in the late 1960s by [Israeli Dealer #3’s] father, from local markets.” A second provenance claim was found in the eighth package (containing 1,000 clay bullae) received by Hobby Lobby. The Israeli export license for the package stated that the bullae were from the family collection of one of the Israeli dealers. Last, when Hobby Lobby petitioned for return of the in Rem Defendants, they submitted a provenance statement from the UAE dealer dated May 2011. This provenance statement declared that the UAE dealer owned “227 clay tiles/tables and 300 miniature ceramic tiles.” The Petition did not explain the inclusion of a second, conflicting provenance statement.
The Fallout
On July 5, 2017, the U.S. brought a civil in Rem action to forfeit the contents of the five packages under the theory that their importation was contrary to law. Authorities kept their case confined to civil court, and refrained from pressing criminal charges against Green and his associates as there was no evidence of looting or conspiracy. Under the representation of Pearlstein, McCullough & Lederman, Hobby Lobby was able to obtain a settlement in July 2017. Hobby Lobby agreed to pay $3 million to the U.S. Department of Justice and to surrender 3,594 artifacts. Additionally, the company agreed to adopt internal policies on the importation and purchase of cultural property, hire qualified outside customs brokers and counsel, and submit quarterly reports to the government on any cultural property acquisition within the next eighteen months. PML’s lead partner on the case, Michael McCullough, stated that the settlement was “just” and a “template for future cultural property disputes.”
In a press release, Hobby Lobby stated that it was a “case of improper paperwork and inexperience in collecting antiquities” and that those involved “did not fully appreciate the complexities of the acquisitions process” because they were “new to acquiring these items.” Green also pointed to his reliance on dealers and shippers he claimed did not know how to properly document or send artifacts. However, one wonders how this transaction was so dreadfully botched when he had Patty Gerstenblith personally explaining the ins and outs of cultural property law to him, as well as an entire legal team at his disposal. One ancient art specialist has gone as far to say that the claim of inexperience was “ridiculous” and that “[n]o dealer in his right mind would’ve been involved.”
Following the settlement, the Iraqi Embassy began working with the U.S. State Department to repatriate the items. In August 2017, Maysoon al-Damlugi, a member of the Iraqi Parliament’s Committee of Culture and Information, commented that it was “merely a matter of time . . . for administrative procedures.” Repatriation of these items continues the Iraqi government’s quest to recover its cultural heritage from the heavy looting that began when Islamic militants came to power in 2014. The government’s power to do so stems from Iraq’s Antiquities Law No. 59 of 1935, which makes all movable or immovable antiquities found in or underground property of the state. Article 26 of the same law bans exports of Iraqi antiquities. The U.S. has had a general ban on importation of Iraqi goods since 1990. Though this ban was modified in 2004, and again in 2010, federal law still bars the importation of Iraqi cultural property.
In light of the potential competing claims over the true ownership of the Hobby Lobby imported artifacts, Iraqi repatriation may or may not prove a more involved process than the initial forfeiture. At least one petition for remission or mitigation of the forfeiture action at hand was put forward by Mr. Yani Warda of the Assyrian Documentation Center. The petition alleged that the defendants in rem should not return to Iraq, given the country’s instability and susceptibility to looting, until the country is considered safe by a respected archaeological organization. Similar claims may continue to arise.
Despite the legal troubles, Green’s Museum of the Bible opened on November 18, 2017. The Museum has cost approximately $500 million to create and houses 44,000 biblical texts and artifacts. News reports noted that the civil forfeiture actions cast a cloud over opening events. In an attempt to dispel questions about the rest of the museum acquisitions, Robert Cooley, the Vice Chairman of the Museum’s Board, stated in July 2017 that “every item in the Museum is documented.” In addition to these assurances, the Museum has retained Thomas Kline, a cultural property attorney with Cultural Heritage Partners. In a press release, the Museum stated that Kline would “advise the board on matters of cultural property, governance, and museum operations.” Kline’s representation may prove to be invaluable in the future.
People have been asking where the Hobby Lobby tablets came from. They are *likely* from looting that happened in 2003-2008 instability. 1/
— Donna Yates (@DrDonnaYates) July 8, 2017
Donna Yates, archaeologist, and an art law scholarly source, has pointed out that the case has created thousands of opportunities for scholars to have ethical issues when they discover the source of their Biblical or linguistic research is based on stolen cultural property.
Conclusion: Good Habits Make for Good Hobbies
Religious observation, art collecting, and craft making are long-standing traditions, both therapeutic and stimulating. There are safe and lawful ways of doing all three, particularly in the United States. It is imperative for collectors to utilize available legal resources to ensure that their purchase complies with import and cultural property laws. To subvert these laws is to rip antiquities and art objects from their history, which undermines their worth and deprives them of their proper educational value. As described above, the laws are in place, purchasers need only make proper importation part of their hobby.
Update as of June 4, 2020
By Marla Katz.
In March 2020, Oxford professor Dirk Obbink was arrested for selling them 13 biblical fragments smuggled out of Egypt and returned by the Museum in 2019. Since then, the Museum announced that it would return some 11,500 artifacts with dubious provenance, bringing the spotlight back on the Museum’s practices.
In May 2020, two actions were initiated in the Eastern District of New York regarding an item of cultural heritage once held in the Museum. The item, an ancient Mesopotamian cuneiform tablet bearing part of the Epic of Gilgamesh, c. 1600 BC., was purchased by the Museum in 2014 during a private sale facilitated by Christie’s auction house, relying upon what has been revealed to be false provenance.
In September 2019, law enforcement agents seized the tablet from the Museum. Law enforcement agents claimed that the tablet was stolen from Iraq and imported into the United States in violation of federal law, which prohibits the sale of stolen antiquities and the importation of antiquities from Iraq after 1990. On May 18, 2020, the United States filed a civil complaint to forfeit the tablet and return it to its Iraqi motherland. The complaint reflects the mission of the Cultural Property, Arts and Antiquity Investigations program under Homeland Security Investigations, New York to combat antiquities trafficking and ensure that those involved in antiquities trafficking are held accountable under the law. The complaint implies serious wrongdoing on the part of dealers, antiquities experts, and prominent auction houses. United States v. One Cuneiform Tablet Known as the “Gilgamesh Dream Tablet”, No. 1:20-cv-02222 (E.D.N.Y. filed May 18, 2020).
As a result, on May 18, 2020, Hobby Lobby initiated suit against Christie’s for fraud and breach of express and implied warranty. Hobby Lobby claims that, during the 2014 transaction, Christie’s assured that the tablet’s provenance was legal and legitimate, though Christie’s allegedly knew that its provenance was false. Hobby Lobby Stores, Inc. v. Christie’s Inc., No. 1:20-cv-02239 (E.D.N.Y. filed May 18, 2020).
Should the United States’ civil forfeiture action be successful, the tablet will be rendered unsalable and valueless to Hobby Lobby (and will most likely end up in a warehouse), which stands to lose both the tablet and the entire value of the purchase price it paid to Christie’s. Hobby Lobby thus intends to appear in the civil forfeiture action as a claimant and seeks to join its claims of fraud and breach of express and implied warranty.
Selected Reading and Bibliography:
- Adnan Abu Zeed, Iraq Eager to Get Back Antiquities Smuggled to US, AL-M?????? (August 3, 2017), https://www.al-monitor.com/pulse/originals/2017/08/hobby-lobby-iraq-artifacts-us-smugglers.html
- Artifact Import Settlement, H???? L???? N??????? (July 5, 2017), https://newsroom.hobbylobby.com/articles/artifact-import-settlement/?utm_campaign=SocialMedia&utm_medium=social&utm_source=facebook&utm_content=1499294900.
- Complaint, In re Approximately Four Hundred Fifty (450) Ancient Cuneiform Tablets; and Approximately Three Thousand (3,000) Ancient Clay Bullae, No. 17-CV-3980 (E.D.N.Y. July 5, 2017) (available at https://www.justice.gov/usao-edny/press-release/file/978096/download).
- Emma Green, Hobby Lobby Purchased Thousands of Ancient Artifacts Smuggled Out of Iraq, T?? A??????? (July 5, 2017), https://www.npr.org/sections/thetwo-way/2017/07/05/535698988/hobby-lobby-to-forfeit-smuggled-iraqi-antiquities.
- Harmonized Tariff Schedule of the United States (2018) Revision 1, USITC Pub. 4762 (Feb. 2018).
- Hobby Lobby’s Legal Expert Speaks: “I Can’t Rule Out . . . They Used My Advice to Evade the Law.”, C?????? A???????? (July 10, 2017), https://chasingaphrodite.com/2017/07/10/hobby-lobbys-legal-expert-speaks-i-cant-rule-out-they-used-my-advice-to-evade-the-law/.
- Julie Zauzmer & Sarah Pulliam Bailey, Hobby Lobby’s $3 Million Smuggling Case Casts a Cloud Over the Museum of the Bible, W???. P??? (July 6, 2017), https://www.washingtonpost.com/news/acts-of-faith/wp/2017/07/06/hobby-lobbys-3-million-smuggling-case-casts-a-cloud-over-the-museum-of-the-bible/?utm_term=.5ea9318d05b5.
- Lauren Markoe, Experts Say Hobby Lobby Must Have Known It Was Illegally Importing Artifacts, R??????? N??? S??????? (July 6, 2017), https://religionnews.com/2017/07/06/experts-say-hobby-lobby-must-have-known-it-was-illegally-importing-artifacts/
- Nina Burleigh, The Messiah Cometh: Hobby Lobby’s Museum of the Bible Descends on the Nation’s Capital, N??????? (April 7, 2016, 6:02 AM), http://www.newsweek.com/2016/04/15/hobby-lobby-steve-green-bible-museum-washington-dc-444752.html
- Pearlstein McCullough & Lederman Favorably Resolves Cultural Property Dispute for Hobby Lobby Stores, ?PRN??? (July 5, 2017), https://eprnews.com/pearlstein-mccullough-lederman-favorably-resolves-cultural-property-dispute-for-hobby-lobby-stores-152688/
- Richard Gonzales, Hobby Lobby to Forfeit Smuggled Iraqi Antiquities, NPR (July 5, 2017, 9:59 PM), https://www.npr.org/sections/thetwo-way/2017/07/05/535698988/hobby-lobby-to-forfeit-smuggled-iraqi-antiquities
- Statement Issued by Museum of the Bible Board of Directors on Engaging Thomas Kline of Cultural Heritage Partners, M????? ?? ??? B???? (Sept. 21, 2017), https://www.museumofthebible.org/press/press-releases/statement-issued-by-museum-of-the-bible-board-of-directors-on-engaging-thomas-kline-of-cultural-heritage-partners
- Tracy Connor, Hobby Lobby Bought More Smuggled Artifacts, NBC (July 13, 2018, 10:28 PM), https://www.nbcnews.com/news/us-news/hobby-lobby-bought-more-smuggled-artifacts-n781176
- U.S. Attorney’s Office, Eastern District of New York, United States Files Civil Action to Forfeit Thousands of Ancient Iraqi Artifacts Imported by Hobby Lobby, U.S. D??’? ?? J?????? (July 5, 2017), https://www.justice.gov/usao-edny/pr/united-states-files-civil-action-forfeit-thousands-ancient-iraqi-artifacts-imported
About the Author: Kat Moynihan is a Spring 2018 Legal Intern with the Center for Art Law. She is currently pursuing a dual degree at Rutgers University; she will earn her J.D. in May 2018 and her M.A. in Cultural Heritage and Preservation Studies in May 2019.
Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advice. Opinions expressed here are those of the author.