Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 180-196)



Q180  Mr Flook: Are you insured for that sort of situation?  

Mr van Haeften: There is a thing called "defective title insurance", which luckily I have but which most insurance companies now do not give because of the problems: the claims can be extremely high with the increase in the value of works of art. I have had two or three cases recently where inadvertently we have bought works of art that have had dodgy provenances. In fact, in all cases, I have not claimed from my insurance company because the amounts have been relatively small, but I am terrified that one day I am going to buy a picture by mistake that is worth £100 million or something. And that could wipe out many dealers. It is interesting to note that my insurance company make it a condition of my policy that every work of art that I buy, even if it has been through Christie's or Sotheby's, must be checked with the Art Loss Register or I am not covered. That is very important. A number of people have discovered recently that they cannot get defective title cover. Indeed, I am very careful to hang on to mine as long as I can, in case there is a big issue. But, let me say that we are incredibly careful about checking everything as far as we possibly can. A database would be absolutely essential to make sure that things do not escape the net, because, sparing Julian Radcliffe's blushes, things do occasionally sneak through. If I may, Chairman, give you an example of something that happened to me last week—it was very pertinent that it happened. I have been a dealer since 1977. With the best will in the world, one or two things, I am sure, we have sold have inadvertently have been uncheckable. A picture we bought in 1991, from a dealer in Holland, we bought for £60,000 and sold it to another dealer in London for £95,000. We thought we had done frightfully well. I had two partners in the picture in Holland, so between us we had made a very nice profit—which was very good, less VAT and all the other things. Anyway, after about six or seven years, he had been unable to sell the picture and sold it back to us—largely because the title of the picture had changed: we thought it was Jacob at the Well; it turned out to be Levite and his Concubine, which is a very horrible story of murder and rape and pillage in the 12th Century. This was a much more difficult picture to sell, with its recently-identified subject. The point of the story is that we bought it back from the dealer.

Q181  Mr Flook: For more or less than you sold it for?  

Mr van Haeften: For less than we sold it before. He was actually rather pleased to get rid of it, I think. It is a common misconception that on every picture you sell, you make a profit. It does not unfortunately go that way. We bought it back from him, and I sold it, then, in partnership with a German colleague of mine to another dealer in Holland, who in turn sold a half share of it to another dealer. This other dealer, who is a dealer in Amsterdam, recently advertised it. Its provenance—and it is in all the books, all the literature, it is in a book called Stekhoff, the picture is by a man called Salomon van Ruysdael, illustrated in the book—includes a dealer called Houstika, who was a Jewish dealer in Amsterdam during the war. The next part of the provenance is a man called Hoffer in Germany in 1971. It was bought by this dealer in 1972 in Holland from whom we bought it. We are aware that this gentleman, Houstika, was a successful dealer in Holland before the war. He realised when the Nazis were about to invade that this was the time to go and he took passage on a ship to America. Unfortunately, as it happens, he fell into the hold and was killed, which was very unfortunate. Needless to say, the Germans then stole most of his stock. The difficulty arises in that, before his unfortunate demise, he had sold thousands of pictures, so the fact that it had a Houstika provenance did not necessarily mean that it was war loot. It was then published and we now know that Mr Hoffer, during the war, was in fact a Nazi agent and sold a lot of pictures to the Germans, to the Nazis in particular, but, again, not every picture he sold was stolen. But this is enough to make one check. Of course one did one's various researches. In fact, the dealer to whom we sold the picture in the first place, having not been able to sell it, had put it through Christie's, it was not spotted by Christie's or Sotheby's, it was in the book, it had not been spotted by the Art Loss Register. The point of the rather tortuous story which I will get to eventually, is that a large number of people who were involved during the picture's history are Jewish dealers themselves, the last person who had it is Jewish; and we now have to give back the money to the person to whom we sold it and he has to give the picture back to the heirs of the painting; and all the way down the line the whole history of the picture has to be unravelled and each person has to go back to the person from whom they got it and eventually we will get back to the dealer in Holland from whom we bought it in 1991. All the way down the line, each time this happens, there is going to be another loss, another financial embarrassment, another series of lawyers' letters, legal actions. The poor fellow who has the painting at the moment has had a horrible letter from the heirs saying that it is appalling that he did not know that the picture was stolen and he had not done his research, and the poor chap had put the provenance quite openly in all the advertisements. So it is quite an emotive issue. Unfortunately this does happen all the time. We do find—you cannot help it—that there are things that turn up. There was a picture that was stolen from a museum in Warsaw during the war that came through Christie's, illustrated in colour—sorry, I am not getting at Christie's, it is just unfortunate that a few things have happened this way—and eventually, I had to give it back to the Polish Government because I was the end user. But Christie's were very helpful and honourable about it and we came to a solution. No two paintings are the same. Each case has a different connotation or complication. It is extremely complex. Without a database, well, it is absolutely hopeless. Pictures, as I say, are easier than antiquities because generally you have a series of steps to go: first, the artist; second, the subject; third, the medium it is painted on. It is more complicated if you have, say, a "jade cup and cover". That does not give you enough description; you need to have an illustration.

Q182  Mr Flook: Just for the record, the police were very complimentary.  

Mr van Haeften: Oh, good. We do try very hard.  

Mr Browne: I have one tremendously good example which illustrates the difficulties. A few years ago, Christie's held a sale on behalf of the Austrian Government of the contents that had been stored in the Mauerbach Monastery. It was not the contents of the monastery, but it was pictures, ownership unknown, that had disappeared during the war. The  

Austrians made every attempt, through intergovernmental contacts and so on, to find the owners of these pictures that had just turned up, had just been impounded in the war. After a great deal of communication, Christie's held this sale. A few years later, I was in Russia and I was talking to the Deputy Minister of Culture, who opened the catalogue and said, "This picture belongs to the Russian museum in St Petersburg." I pointed out to him that if he had read the catalogue carefully he would have seen that the specialists in the Russian museum catalogue had actually helped to catalogue the picture. It had apparently been lent to a museum in the Crimea, just shortly before the war. It had obviously been captured by the Germans and it turned up. It had a happy ending, in so far as the American purchaser of this picture donated it back to the museum in St Petersburg, though he had no reason particularly to do so. It really does illustrate how complicated this whole issue is.

Q183  Mr Doran: I would like to pick up my colleague Mr Fabricant's point. I will not be quite as crude as he was: the point I want to explore is whether London is the weak link, but I am not going to suggest it is a boot sale. It seems to me from the evidence we have heard so far, including your own, that this is a very, very complex issue. There is no question about that. But it is also clear that the art market operates on different levels. Mr Ede made the point that the bulk of your members operate at a much lower level than the exalted level we have been talking about just now. When you look at the resources which are devoted to the difficulties which we are exploring, illicit trade, et cetera, then they seem to be fairly minimal. You are making a case now for a national register which we, I think, support. I do not think there is any question of it being an advantage, but I wonder whether that would tackle the other institutional problems that we face. The Chairman has mentioned, for example, the lack of proper police resources. We did hear some evidence in private, as he suggested, on the very limited resources provided by the Metropolitan Police—I think it is about three officers. In the rest of the country it is very difficult to find a police force that has a dedicated officer. That seems to be a major difficulty if we are to deal with the issue. I would like to hear your views on that, first of all, before I move on to some other to some other weaknesses which seem obvious to me.  

Mr Browne: I agree with what you have said. I think they are weaknesses. It is complex. One cannot say that any one step is going to be a remedy for all these problems, as some of the cases you have heard illustrate. Not even a database is a remedy in the case of multiples, of things that are not unique, of which some things can be really quite valuable—in the case of, particularly, prints and porcelain and so on—but it would go a long way. There is no one single step. The nature of chattels generally, works of art, antiques or whatever, or even collectables, is that they circulate, people own them, and you do not necessarily have a way of being 100% certain about everything. That just is the nature of it. We would take on trust. If you came in with something and you said, "I inherited this from my father," unless there was some very strong reason to question that in terms of subsequent research, one would take it as trust. Of course.

Q184  Mr Doran: What came across to me quite clearly, when we were listening to the police and from my own knowledge of the situation, is that there seems to be a huge amount of ignorance. In my own experience I know that, for example, empty country houses are often a target and the police seem to treat these as vandalism rather than the theft of a valuable fireplace or valuable wall panelling or whatever. Do you get yourself involved with the police? Do you offer your expertise?  

Mr Browne: We do talk to them, and, as I have said, we would be happy to . . . I think one of the problems actually is the way in which people are moved about all the time. And this is not just in the police force; one notices it in other areas too. As soon as someone builds up a certain level of expertise, they are moved into something completely different. The fact that we have all been round a long time, I mean, it does take a long time to learn about these things. It may be to do with the career path of policemen, I do not know, but it would be good if people could actually remain in place. It seems to me that as soon as they get quite knowledgeable, they get moved on.

Q185  Mr Doran: But there is an issue, I think, about raising awareness. You are just raising the profile of this sort of crime.  

Mr Browne: Yes, I agree.

Q186  Mr Doran: With just the expertise we have gathered in this room today, you could be a very valuable influence.  

Mr Browne: Yes.

Q187  Mr Doran: Do you have a policy in that respect?  

Mr Browne: We shout it from the rooftops whenever we can. That is our policy, I suppose. It is an issue, when a major work of art is stolen, as recently in the case of the Leonardo picture at Drumlanrig, that it does attract a great deal of attention in the press and then it dies down. The problem is that this is an ongoing problem and far less glamorous things are stolen all the time.  

Mr Aydon: We shall certainly be holding a seminar on the new Dealing in Cultural Objects (Offences) Act—a sort of teach-in for the trade—later on in the year.  

Mr Browne: That is a sort of internal thing, to communicate internally with the market, but I think you would find us open to suggestions on how we could help in that direction.

Q188  Mr Doran: We may be able to come up with some for you. Let me move on a bit. There is a problem about enforcement. The whole question of auction houses is something that has troubled me for a while. I did introduce a ten-minute rule bill in the House of Commons a couple of years ago on the buyer's premium, but there has been quite a considerable focus on the two principal auction houses over the last few years—because of the prosecution in America of Mr Taubman; the EU inquiry; and a host of other issues, including some recent press coverage of the way that one of the auction houses allegedly handled some paintings which had a suspect provenance. It is quite clear from the way you have presented your evidence that the importance of London in the market depends a great deal on integrity but, again, it seems to me that the regulation of the auction market is one of the weak links. I do not know if you would want to respond to that.  

Mr Browne: I would love to respond to that. I think Richard probably would be better at this one, but I would just like to make a general statement. I do not actually believe that that is true at all, that there is a lack of integrity. The reason it attracts so much attention is by the very fact that auctions are open. It is such a transparent market: you can really see what is going on in it.

Q189  Mr Doran: I am not sure the court in New York would agree with that.  

Mr Browne: This is another issue, and Richard may want to comment on that. But that is not so much the function of the auction itself; it is to do more with other issues, as you know. As a matter of fact—and it is quite useful to put this on record, because I was talking to ministers when the Government were supporting us on the issue of artists resale rights against the background of the very case to which you refer, and I had quite a lot of comments rather similar to the one you have just made—the two salerooms you mention account for 25% of the UK art market, which is actually the biggest percentage anywhere. I am so tired of reading—I wish I had a pound for every time I have read it—that they account for 90% of the art market. They do not. May I put that on record because I think it is important to put it in perspective. But they are very important. I am not denigrating their importance at all.  

Mr Aydon: I think it is important to say about the case in New York that it was not about the provenance of objects or stolen objects; it was about pricing.

Q190  Mr Doran: I understand that. That is why I made the point about integrity.  

Mr Aydon: That is now happily resolved. As far as the provenance issues are concerned, I think the point that Anthony made is well made: that it is an open process. Catalogues are published to the world, thousands upon thousands of them—from the big auction houses, at any rate. They are sent to the Art Loss Register for reviewing and they are sent to other interested parties, museums and so on. So we are very open about the objects that we are offering for sale. If anybody does have a question or a claim or a challenge, we take it extremely seriously: if it cannot be resolved before sale takes place, the object is withdrawn, held, the police will be involved if that is appropriate. I believe we do take great efforts to address the concerns that you are raising.

Q191  Mr Doran: Do you want to say something, Mr Ede?  

Mr Ede: I would like to make a brief point about the market in general. The vast majority of dealers do not want to handle stolen goods. The vast majority of dealers are trying to make a living, and if you give them the tools and at the same time show them that it would be very difficult to sell anything that could be demonstrated to be stolen, you have done the job. What we do not need is masses more bureaucracy and masses more police and masses more laws. We have the strongest laws that there are in the world. It is quite clear, following this new act, that the market understands what the position is—and it certainly will be, once we have had these various seminars, that everybody will have been told. We now need the tool to enable us to make sure that these stolen goods do not get into the market in the first place.

Q192  Mr Doran: Some of your dealer colleagues in Italy might question whether we have the strongest rules in the world or whether they have.  

Mr Ede: They do not enforce theirs, that is the difference.  

Mr Browne: That is a serious question.  

Mr Ede: They do not enforce them.

Q193  Mr Doran: One final point here, again on the question of the auction houses. I appreciate that we do not want greater regulation and bureaucracy, but, at the same time, the legislation which covers auction houses is ancient. It dates from 1845. It is minimalist in its approach. Obviously there have been developments in the common law. We now work in a global market. Do you think there is any case at all, to enhance the reputation of the British market, that that legislation should be modernised?  

Mr Browne: I thought it was 1969.  

Mr Aydon: I am just thinking of your date of 1845. There has been legislation since then.

Q194  Mr Doran: There have been bits and pieces, tinkering around the edges.  

Mr Aydon: I would like to see self-regulation given a chance.

Q195  Mr Doran: We have had that for 200 years or more.  

Mr Aydon: I do not think you can take one high profile case, the American case—which was the background for your remarks—I do not think you can take that unhappy incident and then extrapolate from that the fact that we need to have regulation. I believe certainly that the major auction houses take very serious steps and efforts to deal with points of legitimate concern and I believe we should be given the opportunity to work that out.

Q196  Mr Doran: I am not extrapolating from Mr Taubman's case that there should be modernisation; it is from a whole range of things. I do not want to make any unfounded allegations here but there has been concern for quite a number of years about the relationship between the two major auction houses and the way in which policies are determined. The introduction of the buyer's premium is just one of them, but if we move away from that there is a virtually unregulated market at auctions now. There has been an explosion in the number of auction houses which have opened, some of them with questionable experience. These are issues which are of just as much concern as the top end of the market.  

Mr Aydon: I am afraid I can only speak from the perspective of one of the big auction houses. My comments come from that perspective.  

Mr Browne: Could I make a general point. We very much support it, subject to some amendments which the Government agreed to Richard Allan's bill. We are not against sensible regulations that target criminal activity. The thing that terrifies me is imposing on the market as a whole regulations that in fact will just fall as a burden on those who would normally behave properly and that probably the criminals would ignore anyway, given that the absolute key to London is its international competitiveness. Last year I think we attracted works of art worth over £1.7 billion from vendors outside the European Union. They are using our services because we have the best market here and we are most experienced at it. I am very much against untargeted regulatory intervention. If there is a serious problem that regulation needs to address—and I thought Richard Allan's bill did because it plugged a gap in the existing law—that is fine. We are very keen to isolate the criminal, of course, because the activities of the criminal damage the reputation of the legitimate market on which we depend.  

Chairman: Thank you very much, gentlemen. I hope the rest of your day is useful to you.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2003
Prepared 16 December 2003