Center for Art Law

At the crossroads of visual arts and the law.

In Brief – 2016

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Fall 2016

Money, Elections and Taxes Make the Head Spin NYTimes reports that Eric T. Schneiderman and his office are looking into presumptive presidential candidate Donald J. Trump’s nonprofit foundation. While Trump’s tax returns remain locked up, his nonprofit, the Donald J Trump Foundation INC, est. 1988 and is in operation out of Woodbury, New York has some answering to do. The Foundation was originally founded to give away proceeds from the book Trump: The Art of the Deal (1987). Decades later Trump remains the Foundation’s president. The New York Attorney General’s Charities Bureau, which oversees regulating nonprofits in the state, has asked about a $25,000 donation the Trump Foundation made in September 2013 to “And Justice for All” — a political group connected to Florida Attorney General Pam Bondi. Other questions raised by The WashingtonPost, more directly related to #artlaw and #noprofitgovernance have to do with the Trump Foundation supposedly paying $20,000 for a six-foot-tall portrait of Trump, by Michael Israel. More recently four separate charities -the Giving Back Fund, Children’s Medical Center in Omaha, the Latino Commission on AIDS, and Friends of Veterans- reportedly claimed they never received donations that the foundation said it gifted them. (MP)

Select sources:

  • Steve Eder, “New York Attorney General to Investigate Donald Trump’s Nonprofit,” The New York Times (Sep.13, 2016);
  • David A. Fahrenthold, “Trump bought a 6-foot-tall portrait of himself with charity money. We may have found it,” The Washington Post (Sep.14, 2016);
    David A. Fahrenthold, “Three of the mysteries in the files of the Donald J. Trump Foundation have been solved. Here’s what we know,” The Washington Post (Sep.13, 2016).

Summer/Fall 2016


A bipartisan groups of senators, Sens.Ted Cruz (R., Texas), Chuck Schumer (D., N.Y.), John Cornyn (R., Texas), and Richard Blumenthal (D., Conn.) are currently spearheading a new piece of legislation that will facilitate the restitution of Nazi looted artworks to Holocaust survivors in an expedited manner. The bill is titled the Holocaust Expropriated Art Recovery Act (HEAR Act) and will allow “civil claims or causes of action to recover artwork or other cultural property unlawfully lost because of persecution during the Nazi era, or for damages for the taking or detaining of such artwork or cultural property.” Holocaust Expropriated Art Recovery Act, S. 2763, 114th Cong. (2016). The Hear Act estimates that the Nazis confiscated as many as 650,000 works of art as a part of their genocidal campaign and works to  build on existing efforts on the part of the U.S. government to review and rule upon claims made by survivors.

According to one of the sponsors of the HEAR Act, Senator Cruz, this piece of legislation would also draw attention to current cultural crimes, particularly ISIS’s destruction of cultural sites and artifacts throughout the Middle East. Support for the bill extends beyond Congressional walls. On June 7th, actress Helen Mirren testified before the Senate in a judiciary subcommittee hearing on the HEAR Act. Having recently portrayed  Maria Altmann, a jewish woman who successfully reclaimed five works by Gustav Klimt which were  looted by the Nazis, in Women in Gold, Mirren has asserted her commitment to supporting this cause. In closing, Mirren both thanked and urged Congress to take action, explaining that Congress has the power, through its actions, to rejuvenate the lives of many people.

May 2016

Can’t Hide from the Taxman As reported by the New York Times New York State Attorney General Eric T. Schneiderman announced a $7 million settlement with real estate developer Aby Rosen for back taxes on $80 million worth of art. Rosen failed to pay taxes accruing since 2002 by claiming the works were purchased for resale when in actuality he kept them in his personal collection – New York allows the purchaser of art to avoid taxes if the purpose of the purchase is to resell the art. DH

Stop Taxing Death and Disability Act Keegan Brennen was born in 1990 with an immune deficiency coupled with learning disabilities. Despite these health-related obstacles, Brennen won his high school’s Excellence in Visual Arts award and went on to attend the New Hampshire Institute for Art. After graduating cum laude in 2012 Brennen’s health issues caught up to him. Less than a year after graduating college, and accumulating $78,000 in student loans, he died due to a brain aneurysm. Brennen’s parents applied for loan forgiveness – death is one reason for federal loan forgiveness. Unfortunately this tragic story didn’t end there.

The discharged student loan debt is taxable income and thus Brennen’s parents had to pay both Federal and State income tax, $27,000 and $6,300 respectively. In September 2014 Angus King, Junior United States Senator from Brennen’s home state of Maine, introduced a bill “Stop Taxing Death and Disability Act” that would no longer require the recipients of loan forgiveness, due to death or permanent disability, to pay taxes on the forgiven loan.

More about Brennen’s case can be found at the Portland Press Herald. Senator King’s bill can be found in its entirety here. Additionally Senator King wrote an opinion piece about the bill for the Portland Press Herald in 2014. DH

April 2016

Ace is Low On April 6, 2016 Sam Leslie, a bankruptcy trustee, took over control of the day-to-day operations of the Los Angeles based Ace Gallery when Douglas Chrismas, the founder of the Gallery, failed to comply with a court order to pay $17.5 million to settle debts. After taking over Leslie began sorting out ownership of  artworks so the gallery could satisfy debts by selling what it owned. According to the New York Times one of the issues Leslie had to deal with was the fact that a computerized inventory does not seem to exist for the Ace Gallery collection which is estimated to contain around 2,750 pieces.

About a month after taking over the day-to-day operations of Ace Gallery Leslie has kicked Chrismas out. The catalyst for this was the discovery that Chrismas diverted around $17 million to Ace New York and the Ace Museum – according to The Art Newspaper Ace New York closed “over a decade ago” and Ace Museum has a “spotty exhibition history.” To make matters worse, The Art Newspaper is also reporting that Leslie said Chrismas directed his assistants to place 60 artworks from Ace Gallery into private storage. Because Chrismas has declared bankruptcy so many times even if these works are personal property he might still be in trouble.

  • Jori Finkel, Millions of dollars and dozens of works diverted in Ace Gallery bankruptcy case, accountant finds, The Art Newspaper (May 23, 2016, 8:50 am),
  • Jori Finkel, Artists Fight to Get Works Back From Ace Gallery, N.Y. Times, April 21, 2016, at C1.

Panama Papers & Ganz Sale The Panama Papers — the leak of 11.5 million files from Mossack Fonseca, a Panamanian law firm — revealed that there may have been something nefarious behind the infamous Ganz sale at Christie’s. The Ganz collection, which was auctioned for $206.5 million at Christie’s in 1997, was seen as a catalyst for today’s art market and owed its success in part to being auctioned as a single collection with each pieces most recent provenance listing the famed art collector Victor Ganz. The collection was advertised as “fresh” meaning “no other collector or dealer had been offered these works.” Yet, the Panama Papers reveal that the ownership may have passed briefly to British billionaire Joe Lewis, who entered into a secretive agreement with Christie’s and acted as a third party guarantee, thereby ensuring the auction’s success and benefiting Lewis and the auction house. SE

Hidden Idol hits Asia Week This spring New York Times reported about multiple law enforcement’s efforts to quash illegal sales of looted artworks offered for sale during the Asia Week New York. The efforts were a result of the Operation Hidden Idol, a nine year investigation into antiquities smuggling. The Manhattan district attorney’s office led by Cyrus R. Vance has collaborated with federal officials to orchestrate warranted raids and seizures to reobtain illegally smuggled antiquities from abroad. Many items have been returned to their home countries. In the past, prosecution of art dealer smugglers was rather rare, however Mr. Vance hopes to implement sterner policy and has stated, “If you don’t send the message, you don’t deter others…Antiquites raiding is not an acceptable business model.”

March 2016

Five Charged with Selling Non-Genuine Alaskan Native Artworks On March 3, 2016, the U.S. Attorney’s Office in the District of Alaska charged five individuals with violating the Indian Arts and Crafts Act. Four business owners and an employee were accused of selling fraudulent native artworks at shops in Juneau, Ketchikan, and Skagway, Alaska. The whale and walrus bone carvings were misrepresented as artworks carved by Alaska Natives artists. Not only were these items produced by non-Native Alaskan artists, but one of the works at issue was allegedly manufactured in Cambodia. Assistant U.S. Attorney Jack Schmidt noted that “Congress adopted the [Indian Arts and Crafts Act] as a “truth-in-marketing law” and such misrepresentations and practices are unacceptable. The maximum penalty for violating the Indian Arts and Crafts Act is one year in prison and a $100,000 fine.

Lawyers’ Committee for Cultural Heritage Preservation Seventh Annual Conference On March 25, 2016, the Lawyers’ Committee for Cultural Heritage Preservation (LCCHP) co-sponsored its Seventh Annual Conference with the Fordham Art Law Society. The conference, titled Looted Art and Cultural Property; Current Controversies, Future Resolutions was held at the Fordham University School of Law in New York, NY. The conference featured the following panels:

  • The Parthenon/Elgin Marbles: New Perspectives on a Centuries-Old Dispute, moderated by Leila Amineddoleh;
  • Recent Developments in Cultural Heritage Restitution Cases: Where Are We and Where Are We Going?, moderated by Elizabeth Varner;
  • Conflict-Related Looting and Destruction of Cultural Property: Is Current Policy Working?, moderated by Channah Norman; and
  • What is Digital Cultural Heritage and What Can It Do?, moderated by Thomas Kline.

More information about the event, including speaker names and short bios, may be found on the conference website.

Blockchain – So Contemporary! On March 8, 2016 the law firm Davis Wright Tremaine LLP hosted a panel about Blockchain and the arts. For those of you haven’t read David Honig’s article on digital art, blockchain is a decentralized ledger hosted on multiple servers. Blockchain has many different applications when it comes to the artistic world and the panelists discussed how it could impact the music and visual arts world.

While most of the panelists discussed the implications of blockchain to digital media Robert Norton of Verisart discussed how blockchain can be used in conjunction with physical art. This led to a question by a member of the audience, who happened to be a wine collector, about whether other technology was better suited to insure authentication in physical media since the blockchain ledger and the object are not integrated.

If you want to learn more about blockchain the event organizers host a blog, Creative Block (chain), where they report on news surrounding the blockchain and even have a primer to educated the uninitiated. DH

Door to Door Performing Art or Fake Art Scam Move over eBay, according to Malvern police in the United Kingdom, an Eastern European female has scamming people in the Pickersleigh area by knocking on doors, selling artwork (photocopies) between 10 and 15 Euros each. The Pickersleigh Safer Neighbourhood Team is advising people to remain on guard, specifically elderly or vulnerable individuals. 

The crime fighters in the region are being vigilant. They want to find the predators preying on the vulnerable community members and achieve justice. The spokesperson urged, “If you have any doubt who is at your door, don’t answer it.” JP

February 2016

Museum Asks Federal Court to Determine Rightful Owner of Loaned Work On behalf of the Birmingham Museum of Art, the City of Birmingham, AL (the “City”) has asked the U.S. District Court for the Northern District of Alabama, Southern Division to determine the rightful owner of a loaned work of art. The Museum seeks to return “Shinnecock Hills” by William Merritt Chase to the work’s rightful owner – however, the Museum cannot do so until the court determines exactly who that party is out of the six alleged part-owners of the piece, who are also co-defendants in the action.

The work has been in possession of the Museum since August 2006 and is taking up valuable space in climate-controlled Museum storage. The complaint states that the museum has limited storage space and resources to store art and, further, that “[c]ontinued storage of the Painting is negatively impacting the ongoing operations of the Museum as the space in which the Painting currently is stored is required for other uses.” Accordingly, the City also seeks $11,000 from the defendants as compensation for storing the painting from August 2006-February 2016.

January 2016

Gurlitt Provenance Research/Project “Provenienzrecherche Gurlitt” The German Lost Art Foundation is taking over the provenance investigations of the Gurlitt Art Collection. The “Schwabinger Kunstfund” task force failed to investigate the entire collection in the period allotted, and there is much work still do to analyze the true origins and ownership of artworks in the Cornelius Gurlitt’s possession. More than three years after the discovery of the trove, ongoing “research efforts will focus on determining the provenance of works which have not yet been conclusively clarified. Of primary interest are works for which there is a suspicion that they went missing as a result of Nazi persecution or for which such claims have been made.” The project team is headed by Dr. Andrea Baresel-Brand, and funded by the German Federal Government Commissioner for Culture and the Media. One day the research findings are expected to “be published in German and English following their evaluation by the review experts.”

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