About multi-source due diligence

by Marc Masurovsky

Twenty years ago, an attorney in Washington, DC, Lloyd Goldenberg, ran a company called TransArt International, whose purpose was to establish the principle of multi-source due diligence in the art market and among those professionals who worked with the art trade or in the art trade—insurance executives, bankers, lawyers, appraisers, tax experts, civil servants, diplomats, to name a few.

Mr. Goldenberg knew what he was talking about. The idea that you can consult a single source and declare to the world that you did your due diligence by checking a single source was, is and will always be poppycock, illogical, and cannot withstand the most basic scrutiny. And yet, the art world and especially its litigious side have been governed by the idea that one source is all you need to ascertain that you hold good title to an art object. And that unique source in the 1990s ended up being….. the Art Loss Register (ALR), a London-based, commercial outfit organized around a database of stolen art objects to which auction houses, insurance companies and a handful of top tier museums pay an annual subscription fee in exchange for having their objects vetted for sale or for display.

Mr. Goldenberg is still right about multi-source due diligence.

Twenty years later, there are at least two proprietary, commercial databases of stolen art that one can solicit for assistance about lost objects, for a fee—The Art Loss Register and ArtClaim, run by the Art Recovery Group. And there are also databases that one can consult on the Internet without having to pay anything. lostart.de and the ERR database are two of the principal free, searchable databases available for consultation online. All of these databases play a role in the quest for information about an art object that was stolen or misappropriated and needs to be returned to a rightful owner, if unrecovered.

The two proprietary databases are located in London. The two public databases focused on losses at the hands of the Nazis are located in Magdeburg, Germany (lostart.de) and in Washington, DC (the ERR database).

Since the end of the 20th century, the Internet has exploded in scope and depth, providing significant additions and opportunities to our ability to exercise “due diligence.” The sheer proliferation of digital archives, which can be consulted either for no money or for a fee, complement these databases. But we all know how complex art transactions can be and how opaque the identities of owners are and the paths borrowed by these works. Despite the sheer number of online sources to consult, you can still be stumped in your quest for information about the history of an object even when it has been produced by a “master.”

Nevertheless, Mr. Goldenberg’s world of multi-source due diligence is closer to becoming a reality than it was twenty years ago. The dirty little secret is that it already did exist in 1995. However, the problem lies in the fact that very few people in the art world or involved with questions of ownership, of provenance, of title ever bothered to systematically consult many sources because they did not feel that they had to. Only one was recognized officially and legally as THE SOURCE, the Art Loss Register. But now, we live in a different world. A world in which we still struggle to assert the fact that multi-source due diligence is a necessity to validate that one has good title to an art object whether it is being offered for sale or it is exhibited in a commercial gallery or a museum, whether public or private. Even today, no legal or political authority has bothered to establish a rule by which multi-source due diligence should be a requirement, a sine qua non condition for handling art objects.

For more information, you can go to the following sites:

The Art Loss Register

ArtClaim

lostart.de

the ERR database

A new art loss database, ArtClaim, takes its maiden voyage in London

by Angelina Giovani, HARP correspondent, London (UK)*

On the evening of Monday, January 19, 2015 the London-based Art Recovery Group used the Royal Institution of Great Britain to launch its long-awaited commercial ArtClaim Database. That evening, the event brought together individuals representing many facets of the art market, graduate students from Kingston University and other London-based institutions, and a few art aficionados. The event was elegant and relaxed, but the launch was not what most expected, since there was no actual launch, but rather an announcement that the database is now available for consultation.

Chris Marinello

The unveiling of the database turned into what some referred to as a ‘wasted opportunity’ that should have been seized upon to provide a live demonstration of the database and an in depth guide to using and understanding the high and low levels of the database. In a six-minute long address to the attendees, founder and CEO of Art Recovery International Chris Marinello, once described as the "Sherlock Holmes of art crime",  started with a brief overview of the company’s progress this past year. Marinello, a former senior official of the Art Loss Register, emphasized ARI's successful involvement in some of the biggest art cases of the past year including ‘Woman in Blue in Front of the Fireplace’ by Henri Matisse found in a museum in Norway and restituted to the heirs of the French dealer Paul Rosenberg; the Gurlitt case in Munich, to name only a few.

Woman in blue in front of the fireplace, Henri Matisse

The ArtClaim database includes stolen, looted and otherwise claimed works of art. Unlike other similar for-profit databases, it purports to have over 500 searchable fields, fully integrated image recognition software, free loss registration, access to new and exclusive data sources for current and historic losses, intuitive and responsive user interface and an unspecified number of provenance researchers and analysts outside of the United Kingdom.

I had the chance to talk to most of the company's employees attending the event- Jerome Hasler, Shannon McNaught, Ariane Moser and Alice Farren-Bradley. They are all extremely enthusiastic and friendly people. They managed to be at all places at once, answered as many questions as possible and even circulated with an iPad that gave those interested a chance to have a look at the loss registration interface of the proprietary database. They were also kind enough to answer by email the following questions in the days following the event.

I would like to clarify whether 5000 items are entered on the database per week or per month? The brochure says per month, but I believe everyone I talked to during the event, said per week.

At the time the brochure was sent to print we were able to register around 5,000 items a month. However, thanks to some excellent new hires in our registrations team, we are now adding around 5,000 items a week to the ArtClaim Database – as mentioned at the launch. With several additional members of staff joining our registrations team soon, our capacity will continue to grow and we are confident that this will be reflected in the increased number of items we are able to add to our database each week.

What does that mean in terms of personnel? Entering that much data on the system must require a very large group.
Ensuring that our registrations and searches meet our very high standards for quality is not something we want to rush. Our current staff of analysts is sufficient for the amount of work we currently do, but as we take on more work we are already in process of expanding our registrations team and further expansion will remain a priority.

Is ArtClaim planning to expand? Is a new ArtClaim branch opening up in New York?

ArtClaim has been very fortunate so far to attract an excellent group of employees both in our offices in the UK and in India. We are making some new hires in our registration team but currently our focus is on consolidating the expertise we currently have rather than expanding too rapidly. Once this has been achieved our growth overseas will certainly be a consideration, but our current focus is on meeting the needs of our clients in Europe and Asia. Our India office provides us with an excellent platform for new business in the growing art market where we aspire to build more business. [Editor’s note: interestingly enough, the Art Loss Register also does its ‘fact-checking’ in India].

How does the company fund itself? Do finder’s fees, percentages from recoveries and retainers make for a big part of the income?

Through Art Recovery International we provide a number of specialized services to our clients, advising on a range of issues around art and cultural heritage. Revenue is primarily generated from our corporate registration and research contracts and from the wide range of services offered within our recovery work. Location and recovery fees are calculated on a case-by-case basis. [Editor’s note: Although Art Recovery International did not specify the actual percentage fee that it collects for recovery of looted objects, the Art Loss Register collects 18 percent. That fee might vary as it does with other groups like the London-based Commission for Looted Art in Europe or CLEA.]

The service is free for law enforcement agencies. Who else could benefit? Is there a list of organizations that ArtClaim plans on working closely with?

The entire range of Art Recovery Group’s services is free to law enforcement agencies and some of our other services, such as free loss registrations on the ArtClaim Database, are free to everyone. By necessity a great deal of our work is pro bono but we do not publish a list of the organizations to which this is available. We encourage all organizations to contact us and explore the different ways in which we may be able to work together.

Would the service be free to researchers working on behalf of a victim of loss?
Outside of law enforcement, any free services are calculated on a case by case basis. Typically searches of the ArtClaim Database are charged at a standard rate of £100.

It would be helpful to know how many of the items entered in the database are loot from WWII, and conflict areas such as Bosnia and Syria. Should we expect ArtClaim to produce any kind of reports or statistics regarding the type of content entered in the database? If yes, will they be public?

Whilst the confidentiality of our records is paramount, it is certainly an aspiration of ours to bring reliable statistics about the items registered on the ArtClaim Database to the public. As a company we are also considering wider statistics-based research projects concerning the criminal elements of the art market that would be publicly available upon publication.

Are there provenance researchers working for ArtClaim? How many? What are the selecting criteria when it comes to hiring new members?

We are very fortunate to have a network of provenance researchers around the world that work for us on a case-by-case basis. Access to records in libraries or institutions at all corners of the world is a necessity for thorough provenance research and our network allows us a great deal of flexibility and reach. [Editor’s note: it appears that ARI aspires to establish such a global network and that it is currently working on such a vast undertaking.]

I would also like to address the issue of confidentiality. Is there a clause that limits ArtClaim from approaching heirs or possible claimants, based on the information entered on the database by a researcher?

Unless information entered into the ArtClaim Database pertains directly and immediately to an active criminal investigation, we will not share the content of registrations or searches. In the instance that a match is returned and the claimant known, the expert recovery and resolution services of Art Recovery International would be offered to help in the resolution of any outstanding claim.

There is a lot of pressure on ArtClaim to do this right and there is a vast market for their services. The road that Chris Marinello and his team, many of whom come from the Art Loss Register, have borrowed has been paved by their predecessors at ALR who have shown them exactly what it is that they should not be doing. There is no real competition, except from the Art Loss Register. The most important goal should be to establish reliability and transparency. No double standards, no cutting corners and no operating in the grey zone.

*Angelina Giovani, HARP’s correspondent in London, is a Master’s student at Kingston University in London specializing in Art Market Appraisal. She is a graduate of the American College of Greece in Athens and is an alumna of the ARCA certification program based in Amelia, Italy, and of the Provenance Research Training Program (PRTP) which is run by the European Shoah Legacy Institute (ESLI) in Prague, CZ.