By Michael Sontheimer

The heirs of German-Jewish banker Paul von Mendelssohn-Bartholdy are demanding that New York's most important museums hand over two Picassos. But MoMA and the Guggenheim are fighting back, claiming they are now the rightful owners.

The house at Jägerstrasse 51 in central Berlin is a relic of a glorious past. The stairs glow in white marble, the doors have brass plates. Several generations of the descendents of Moses Mendelssohn, the Enlightenment philosopher, have lived and worked here, just a few steps from the elegant Gendarmenmarkt square. The private bank Mendelssohn & Co. was founded at this very address over 200 years ago.
The historian Julius Schoeps took John Byrne to see the house. "My great uncle Paul worked for the bank in this house," Schoeps explained to his guest from Washington.

Schoeps, 66, and his American lawyer are on the hunt for clues. They are not really interested in the career of Jewish banker Paul von Mendelssohn-Bartholdy, what concerns them is his passion for collecting art. Until 1935 he owned several paintings by Pablo Picasso, works that Schoeps and 26 other heirs would like to see returned to them. "We are concerned with justice," he says.

Last autumn his lawyer Byrne demanded that two of the most famous museums in the world return two Picassos. The New York Museum of Modern Art (MoMA) was asked to hand over "Boy Leading a Horse" while a request was made to the Guggenheim Museum to return the oil painting "Le Moulin de la Galette."

No museum director would ever sell these works, and it is really impossible to put a value on them, although Byrne has estimated that each painting is worth $200 million (€134 million.) This is not just about justice, but about a lot of money.
That is why there are no punches being pulled in this spectacular case of restitution. Instead of discussing the issue with the heirs or their lawyer, both of the New York museums promptly rejected the claims and filed for declatory relief at the end of last year. Their lawyers are now requesting that the United States District Court in New York declare the museums the paintings' rightful owners. The lawyers are currently taking depositions from witnesses and in the autumn the official hearing will begin.

The fight for the Picassos began with a visit to Schoeps, an historian who is the director of the Moses Mendelssohn Center at the University of Potsdam, near Berlin, and who is also the spokesperson for the Mendelssohn-Bartholdy heirs. Five years ago Bogomila Welsh-Ovcharov, a Canadian Van Gogh expert, sought him out: "Do you realize that your great uncle Paul von Mendelssohn-Bartholdy had a fantastic art collection and owned eight Van Goghs?" the art historian wanted to know.

'The Jews Are Going to Have Problems'

He didn’t realize it and neither did anyone in his family. It was the first time that Mendelssohn-Bartholdy's descendents had heard that he had once owned five Picassos. Schoeps began to do some research. He found out that Charlotte, his great uncle's first wife, had been friendly with the influential art dealer Alfred Flechtheim. He had advised the banker and his wife and they built up a small but impressive art collection. The bought eight of Van Gogh's later works as well as paintings by Henri Rousseu, Claude Monet and Auguste Renoir.

The banker, the grand nephew of the composer Felix Mendelssohn-Bartholdy, was both wealthy and far-sighted. "The Jews are going to have problems," he said already a year before Adolf Hitler was named chancellor. In 1933 Mendelssohn-Bartholdy was ejected from the Central Association of German Banks and Bankers and from the board of the Reich Insurance Office. "His assets," says Schoeps, "dwindled rapidly."

The fact that he no longer lived with his art-loving wife -- a Jew -- but with the "Aryan" Else von Lavergne-Peguilhen only helped him slightly. In the spring of 1933 he began to send his paintings abroad to safety. When Flechtheim sent three paintings by Georges Braque, the French Cubist, from Mendelssohn- Bartholdy's collection, to Switzerland he simply sent the five Picassos with them. In March 1933 the paintings were transported to the Basel Art Association where Justin Thannhauser, the art dealer, took possession of them. A year later the banker informed him that he would sell them for a good price.

In August 1936 the American radio entrepreneur William S. Paley, founder of Columbia Broadcasting System (CBS), bought "Boy Leading a Horse." A Swiss art dealer had driven a truck from Geneva to St. Moritz, carrying the Picasso on the bed and had shown the American the painting in the lobby of his hotel. Paley found the price "pretty reasonable." The dealer didn't not want to answer the question of who owned the painting.

One year after his spontaneous purchase of the Picasso in Switzerland, Paley became a member of the board at MoMA, and later its president. In 1964 he presented the " Boy Leading a Horse" to the museum as a gift. Thannhauser kept the "Le Moulin de la Galette" in his private collection. The art dealer left Germany in 1937 traveling to the United States via France and Switzerland. When he presented the Guggenheim Foundation with the painting in 1963 he declared that the work had been acquired from Mendelssohn-Bartholdy in "ca. 1935." How and when Thannhauser came into possession of the five Picassos is now one of the decisive points in the current dispute over the paintings.
Mendelssohn-Bartholdy died in Berlin in May 1935 at the age of 59. The story that has become firmly rooted in the family is that he died of a heart attack after being attacked by a Nazi thug, but there is no proof of this. As if he had had a premonition, three months before his death he and his wife Elsa had signed an inheritance contract at a notary. It was agreed that she would be his heir but that after her death the inheritance would pass on to the banker's four sisters.

The contract, which was written by typewriter, also included a handwritten insert stating that "Mrs. Mendelssohn-Bartholdy's paintings had already been given to her as a gift on their wedding." Schoeps argues that this addition shows that the contract was a typical "persecution agreement" which were used to keep works of art out of the grasp of the Nazi regime. However, the question of whether Mendelssohn-Bartholdy sold under pressure from the Nazis is one that has since become the focus of a bitter dispute.

A Trans-Atlantic Art Dispute

The New York museums claim that his widow would have been already been the rightful owner of all the paintings from when they were married in 1927. That would mean that the paintings were all sold by an "Aryan," who was not being persecuted at all. Schoeps, on the other hand, believes his great uncle sent his pictures to Switzerland, in order to make sure that he would have funds for his planned exile. Since he would not have sold the paintings if it weren’t for the persecution of the Jews by the Nazis, he lost them "under duress." This would require that they be returned to the heirs.

The lawyers for the two New York museums argue that the family was dominated by Protestants which "mitigated the impact of Nazi anti-Semitism" on Mendelssohn-Bartholdy. Schoeps calls this a "cynical claim," considering his great uncle was viewed as a Jew by the Nazis and fitted their racist cliché of the "money Jew."
Something that makes the case even more complicated is the fact that there are no documents to show if or how much Thannhauser paid for the Picassos. The five Picassos were entered into the Thannhauser Gallery's entry book on Aug. 31, 1935. However, the fact that 200 other paintings were also entered on the same date means that they were not actually bought on that day. Schoeps assumes that the art dealer was in a financial fix and therefore simply stole Mendelssohn-Bartholdy's paintings.

The dispute is not only spectacular because of the valuable paintings, but also because of the people involved. The heirs are all German and Swedish citizens of Jewish ancestry. They are demanding that the paintings be returned by museums where American Jews such Ronald S. Lauder, the cosmetics heir, art collector and president of the World Jewish Congress, wield great influence. Lauder is the honorary chairman of MoMA and was deeply involved in the "Washington Declaration" which saw 44 countries sign up to an agreement on the restitution of art. He has personally been involved in several restitution cases on the side of the heirs. Like the museums and their lawyers, he declined to comment on the legal dispute over the Picassos.

Byrne and Schoeps are now awaiting the outcome of the New York hearings, but they have also made other restitution claims. One has been made to the Neue Pinakothek in Munich, which bought Picasso's "Madame Soler" from Thannhauser in 1964. The other is a Picasso drawing, the "Head of a Woman," which belonged to Paul von Mendelssohn-Bartholdy and is now in the National Gallery in Washington.
"We would like a clarification at last," says Schoeps. He likes the term that Ronald Lauder has used for these kinds of pictures. The art collector has called them the "last prisoners of war."