Examination of Witnesses (Questions 180-196)
MR ANTHONY
BROWNE, MR
RICHARD AYDON,
MR JAMES
EDE AND
MR JOHNNY
VAN HAEFTEN
4 NOVEMBER 2003
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.
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