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Committee on Financial Services

United States House of Representatives

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Statement of Ronald S. Tauber
Chairman, The Art Loss Register Inc.

 

Committee on Banking and Financial Services
United States House of Representatives

Feb. 12,1998

I am pleased to have this opportunity to present this statement to the Committee on Banking and Financial Services in connection with its study of the important issues relating to art looted during the Holocaust era. I believe there is an exceptional opportunity for cooperation between the private sector, major cultural institutions, non-profit organizations, and government in order to identify and assist in the recovery of stolen art.

The Art Loss Register operates a permanent, computerized database of stolen and missing works of art, antiques and valuables. It operates on an international basis to assist law-enforcement agencies in the battle against art theft. Its stated objectives are:

To identify and recover stolen works of art;

To deter art theft; and

To reduce the trade in stolen art.

Our database, which is the largest private database of its kind, consists of nearly 100,000 items and approximately 10,000 items are added per year. Our company's activities are responsible for the recovery of nearly 300 items each year. We search approximately 400,000 auction catalog lots prior to sale each year and we respond to inquiries from police and law-enforcement agencies throughout the world. We have offices in New York, London, Dusseldorf, Dublin, Perth (Australia), and we are about to open an office in St. Petersburg, Russia. We have a close working relationship with the FBI, Scotland Yard, Interpol, and other law-enforcement agencies. In fact, the FBI consistently checks with us as to stolen items and we are currently discussing with Scotland Yard ways of sharing and integrating their data on stolen art with our own database.

The ALR represents a unique cooperative effort among the art community, the insurance and financial industries and law-enforcement agencies. Our shareholders include major auction houses (Sotheby's, Christie's, Phillips and Bonhams); insurance firms ( Aon Corporation, Nordstern Insurance, and a Lloyds affiliate); several international art dealer associations; a financial services firm (Rosenthal & Rosenthal); and the International Foundation for Art Research, the leading nonprofit organization dedicated to preventing the circulation of stolen, forged or misattributed works of art.

The commercial art community, including auction houses, prominent dealers, and appraisers routinely checks our database to determine whether items which are about to be sold (or bought) have been listed as stolen or missing. We have made arrangements with professional art dealer and appraiser associations for the convenient and economic use of our services by their thousands of members. The art community wishes to be assured that it can conduct its due diligence activities by searching in one location. To this end, I wish to report to this Committee that we have offered to the World Jewish Congress Commission on Art Recovery, the Holocaust Art Recovery Project and the United States Holocaust Museum, the following:

1. We will make our technology and management expertise available, at cost, to help develop a specialized new Holocaust database.

2. If appropriately linked to our system, we will search any new specialized Holocaust database (whether developed with our assistance or not), whenever we search our own.

3. We are prepared to participate in (or direct) an effort to develop a museum self-regulatory mechanism under which museums in the United States and elsewhere would undertake to examine the provenance of their holdings which were acquired by them (or their predecessors in title) during or immediately after the Holocaust period; we could maintain a separate database which would be the repository of all known information concerning these works.

We believe that there is no other organization, in the United States or elsewhere, which has resources comparable to our own to identify and assist in the recovery of stolen art. Our business operates at the intersection of the art world, law-enforcement, and the financial and insurance industries. We have regular and extensive contacts in each of these areas on a global basis. Literally hundreds of insurance companies subscribe to our service and the major auction houses and many art dealers rely upon us to avoid selling (or buying) stolen art.

Increasingly, registration of loss and searching our database prior to purchase have become critical elements of due diligence in the art market. Much of the litigation in the art world has involved the competing claims of two innocent parties, the theft victim and the good faith purchaser for value. Courts and legal authorities have begun to examine whether the parties fulfilled their due diligence obligations by respectively registering the loss and searching for evidence of a reported theft.

We already have many Holocaust related items registered in our database. Many more, perhaps tens or even hundreds of thousands more, should be registered. When these items were stolen, no organization had the capability of cataloging them for possible future discovery. With the advent of our computerized database, registration would undoubtedly result in recoveries. By searching auction house catalogs and responding to inquiries from dealers, our professional staff prevents the sale of stolen objects in their natural commercial marketplace. Thoughtful planning will allow us to similarly thwart the sale of additional Holocaust looted items.

Moreover, we have recently commenced a new service to financial institutions which lend funds against art collateral. These institutions now can check whether the collateral has been reported as stolen and can also register their liens with the Art Loss Register. Undoubtedly, some stolen art -- including Holocaust looted art -- is used as collateral if the current possessor believes the object is too "hot" to sell. Obviously, the use of stolen art as collateral for a loan permits a person to launder stolen art and obtain cash proceeds. Our new service will help uncover this type of transaction.

I urge this Committee to encourage the many institutions and government agencies interested in the subject of Holocaust looted art to work together and to avoid costly and needless duplication. As a private company with a significant relationship to law enforcement, we have a commitment to play a constructive role in identifying art looted during the Holocaust and World War II and to help resolve issues relating to such art. We are confident that our participation in this area will provide professionalism and commercial experience and will reduce the possibility of duplicative efforts and wasted resources.

Respectfully submitted,

 

Ronald S. Tauber
Chairman, The Art Loss Register Inc.



 

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