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State may loose dozens of masterpieces

A decision in a Washington D.C. court is likely to determine whether 44 valuable pieces of art can still be exhibited in museums in Hungary, or whether they must be returned to the heirs of their private collector.

The Herzog art collection court case has recently entered its final, discovery phase, the Budapest Business Journal has learnt from attorneys close to the case. The law suit has been on-going at the U.S. District Court for the District of Columbia since 2010 between the Hungarian State versus David de Csepel, great-grandson of the late Mór Lipót Herzog, one of the greatest art collectors of interwar Hungary. At stake are 44 paintings, together valued at more than $100 million from the one-time Herzog collection. The plaintiffs, namely de Csepel and two other descendants of Herzog, claim the ownership rights of the 44 works of art, which are all exhibited in Hungarian public collections such as the Museum of Fine Arts and the Museum of Applied Arts. Crucial questions related to Hungarian history are also being raised at the current stage of the court process: who stole the art treasures, the Nazis or the Communists?

One thing is certain: theft is theft. Hungarian public collections have no acceptable moral grounds on which they could keep the property of the Herzog heirs against the heirs’ will. Compared to that, it seems to be a question of secondary importance to whom the expropriation should be attributed: the anti-Semitic Horthy regime, in place until mid-October 1944, or to the anti-bourgeois Communists? From a legal point of view, however, it seems there is a big difference between the two. The plaintiffs are trying to prove that the disputed part of the Herzog collection was treasure looted in the Holocaust. Representatives of the Hungarian state, on the other hand, want to hold Hungarian Communist leaders responsible for the expropriation.

“In all earlier cases brought to court in the United States, in which the loss of property could be related to the Holocaust, it was determined that U.S. courts did have the authority to rule,” Péter Komáromy, senior partner of Eversheds law office familiar with the case, told the BBJ. The plaintiffs apparently would like to represent the expropriation of the Herzog art treasures as Nazi theft assisted by complicit Hungarian officials. Opposed to that, the Hungarian state wishes to prove that the expropriation was a Communist move carried out in 1948-1953. 

The adventurous story of the Herzog collection

The destiny of the Herzog collection goes back to the final years of the Second World War. The first time when many owners of art collections decided to hide their treasures was in 1943, the year when Hungary and Budapest was first bombed by the Soviets. The Herzog heirs joined that trend, hiding many of the paintings in their possession in wine cellars at Budafok outside Budapest. They placed the rest of their art treasures in various private apartments.

German troops occupied Hungary on March 19, 1944; Hungary lost her sovereignty as a result, but the country’s head of state, Admiral Miklós Horthy, remained in office. Owners of art collections faced radical policies under the occupation: Hungarian authorities, subservient to German demands, ordered the registration and sequestration of art treasures in the possession of persons classified as Jewish according to the racial laws in effect at the time. A state bureau called the Government Commission of Sequestered Jewish Property, headed by Dénes Csánky, was set up in May 1944. All descendants of the art collector Lipót Mór Herzog (who had died in 1934) were considered Jewish, and fell under the effect of the anti-Jewish laws, regardless of the fact that Lipót Mór Herzog and all three of his children had converted to Christianity (i.e. Calvinism) earlier. This meant they were supposed to register their art work as well; they did not do so, but soon after the German occupation an anonymous informer reported them to the authorities. The Herzogs’ art treasures hidden in the Budafok wine cellars were seized by the Hungarian authorities and transported to the Museum of Fine Arts (the director of which was also Dénes Csánky). The Herzogs received a receipt of deposit for each piece of art from the Government Commission, which specified the artwork’s title, description, the owner’s name and the statement that the piece in question was taken into deposit.

El Greco: Agony in the Garden

After the coup d’état of the pro-Nazi Arrow Cross Party headed by Ferenc Szálasi, Csánky continued to serve as head of the Government Commission of Sequestered Jewish Property, and took an active part in the transportation of such property – including valuable works of art – to Germany. Four trains were dispatched from Budapest; the first one, carrying part of the Herzogs’ art, did not make it past Szentgotthárd, where its cargo was deposited in the cellars of a local monastery. The remainder of the Herzog collection, carried in the other railway cars, came under the control of American troops around April 1945 in southern Germany. As was always the case in such situations, the seized goods had to be returned to their country of origin under the terms of international agreements – in this case, to Hungary. In the meantime, the Soviet Red Army had liberated the country by April 4, 1945. Soviet troops were looting Budapest, taking many art treasures with them during that year; those items of the Herzog collection that had remained in private apartments since 1943 became the war booty of the Soviets stationed in Budapest in 1945.

After liberation, a parliamentary system was briefly restored in Hungary. A coalition government was set up, in which the Communists – now a legal party in Hungary – also participated. The new Ministry of Religion and Public Education, headed by Gyula Ortutay, had to manage the task of returning deposited property such as art treasures to the original owners. Within the ministry, a special commissioner, namely art historian Sándor Jeszenszky, was appointed to handle the issue of restitution. That, however, turned out to be a long-drawn-out process, which went on for years. In the spring of 1948, it was brought to the attention of the authorities that several pieces of art freshly returned to their owners were being transported to Switzerland without the permission of the Hungarian government. As a result, Jeszenszky abruptly stopped the entire process of restitution. In the summer of 1948, the Communist party in Hungary seized power, backed by the Soviet Union. The Sovietization of public life in Hungary accelerated, and legislation lost its independence. On the grounds that two Herzog heirs had abetted/suborned/sponsored the smuggling of certain art works in their possession to Switzerland during 1948, a court ordered that all members of the Herzog family be deprived of their art, taking those works into state ownership. By that time, however, all members of the Herzog family were living abroad. Between 1950 and 1953, the Museum of Fine Arts catalogued all pieces of the Herzog collection as the museum’s own property.

Moral considerations

In the next phase of the lawsuit, the central issue to be investigated will be whether the art treasures came into the possession of the Museum of Fine Arts thanks to the persecution of Jews in Hungary, or if their expropriation was rather related to the unlawful practices of Stalinism. 

The judgment of Csánky’s activities is extremely controversial. According to the Holocaust narrative, he acted as a vassal of the German occupiers, assisting them in depriving Jewish people of their property. After the Arrow Cross coup in mid-October 1944, he took an active part in the transportation of Jewish treasures out of Hungary. “This fact determined Csánky’s reputation throughout the whole Communist period,” László Mravik, art historian and expert on art treasures looted in Hungary during and after World War II, reminisced. “This approach, however, conceals the fact that the part of the Herzog collection Csánky took into his ‘care’ were preserved and eventually returned to Hungary, whereas those items of the Herzog collection which had been placed in private apartments throughout Budapest all fell victim to Soviet looting and disappeared from Hungary forever. It is a well-known fact that the Herzog collection in the interwar period consisted of 2,500 works of art; the 44 pieces which the Herzog descendants are now claiming back – a mere fraction of the total – are the ones Dénes Csánky had ‘rescued’ during World War II,” Mravik added.

Those are the objective facts. The story, however, has a subjective dimension as well: what did a Hungarian state official in May 1944 think about the sequestration of Jewish treasures. By accurately documenting the deposits, did he intend to cover up his participation in state-administered murder and robbery, or did he want to help preserve the property of people in case they happen to return? Csánky had been friends with some wealthy Jewish art collectors previously, and some of those people had in fact entrusted their collections to Csánky for safekeeping voluntarily, well before the German occupation of Hungary.

“In 1944, the Allies landed in Normandy. Csánky at that point might have thought that Germany would lose the war. The other thing to consider is the way Csánky looked after the paintings after leaving Hungary on a train and taking the art treasures with him in November 1944. Although he surely encountered several situations in which he might have made things easier for himself by selling a few paintings, he never did so between November 1944 and April 1945. On the other hand, being aware of the dangers of transporting art treasures to besieged Germany, he ordered part of the collection to be dug up in a monastery’s cellar in Western Hungary,” Mravik said.

The other period that might call for interpretation is that between 1945 and 1948. “The situation orchestrated by Minister of Culture Gyula Ortutay was characterized by a double-faced policy: One principle was that property should be returned to the owners, but the other principle was that owners should be convinced to offer their property up for sale to the Hungarian state,” Mravik explained. The government knew that art treasures were the only significant remaining property of once wealthy Hungarian Jews, or those classified as such under earlier racial legislation. The factories and other large enterprises of the former bourgeoisie had by then either been damaged or nationalized; gold had been taken before 1945; cash and savings had been eaten up by the soaring inflation of 1945-46. “When, in 1946, Minister Gyula Ortutay returned the first transport of art treasures to the Herzogs, he was sitting on his desk shaking a large bag of tingling gold, and asked the Herzog descendants if they perhaps preferred to offer up the items of their art collection to the Hungarian state,” Mravik narrated. This is how the Hungarian state managed to purchase eight paintings from the Herzog heirs.

But that was not the only method. There was a harsher measure too: namely the state supervision of art treasures and the limitations placed on their export or shipping abroad. The ban on shipping art work was definitely part of the bargaining process when it came to determining the price of paintings and exerting a declaration from the owners about the intended sale of their property. The reason why the Hungarian authorities responded so harshly to the disclosed cases of art smuggling is because it had the potential to undermine the whole system of bargaining devised by the Hungarian state.

“The Communists applied methods quite different from those used by the coalition governments up until 1948,” Mravik pointed out. They responded to the transportation of art abroad, commissioned by Mrs. István Herzog, by ordering the confiscation of all pieces of the collection from all Herzog heirs. That was when the remaining part of the Herzog collection was taken over by the Hungarian state once and for all. Subsequently, museum curators were instructed from above to catalogue the items of the Herzog collection as the property of their museums.