43. Despite the heirs’ diligent efforts to locate the records and the truth regarding their inheritance, Dr. Garzarolli did not disclose these facts to Dr. Rinesch or the heirs, and kept the files from Adele's probate proceedings in his possession. Instead, despite his private reservations, Dr. Garzarolli took an aggressive stance against the heirs and prepared to sue them to obtain the other Klimt paintings that were not yet in the AUSTRIAN GALLERY’s possession.
44. On around March 30, 1948, officials from the AUSTRIAN GALLERY reviewed artworks in the apartment of Karl Bloch-Bauer (or his attorney) in order to advise the Federal Monument Agency whether to permit the artworks to be exported to Canada, where Karl and his brother, Robert Bentley, resided. The officials from the AUSTRIAN GALLERY recognized that several of the artworks in the apartment, including Klimt's Houses in Unterach am Attersee, were formerly part of the estate of Ferdinand Bloch-Bauer.
45. On April 1, 1948, Dr. Garzarolli of the AUSTRIAN GALLERY wrote to the Austrian Attorney General (Finanzprokuratur) seeking legal assistance in obtaining the Klimt paintings which were not yet in the possession of the AUSTRIAN GALLERY, including the Klimt painting in Karl Bloch-Bauer's (or his lawyer’s) apartment.
46. On April 2, 1948, Dr. Garzarolli wrote to Dr. Otto Demus, president of the Federal Monument Agency, notifying him that the AUSTRIAN GALLERY was interested in obtaining several of the artworks belonging to the heirs of Ferdinand Bloch-Bauer which were seen in Karl's apartment. Dr. Garzarolli requested that the processing of export permits for the heirs' artworks be delayed "for tactical reasons."
47. On April 3, 1948, Dr. Demus of the Federal Monument Agency telephoned and met with Dr. Rinesch and informed him that the AUSTRIAN GALLERY put great value in the artworks in Karl's apartment and that a quick agreement concerning export permits was unlikely. Dr. Demus discussed the subject of the Klimt paintings with Dr. Rinesch and informed him that if there was a dispute over these works, none of the artworks from Ferdinand's collection would be permitted to be exported to the heirs until that dispute was resolved.
48. This discussion also pertained to a large number of valuable artworks from Ferdinand's collection which had been stolen by the Nazis for the collections of Adolf Hitler and Hermann Göring, among others, and were being held in the Allied Art Collecting Point in Munich, Germany. These artworks could only be returned to the heirs after the allied forces had delivered them to Austrian authorities at the request of the Federal Monument Agency. These works would also be subject to review by the AUSTRIAN GALLERY and the Federal Monument Agency, and export permits would only be granted with their consent. Given the high artistic and monetary value of these other works, Dr. Rinesch had every reason to expect that the AUSTRIAN GALLERY and the Federal Monument Agency would attempt to use the export permit restrictions to obtain "donations" of a number of these artworks.
49. On April 10, 1948, Dr. Rinesch met with Dr. Garzarolli to discuss the impending application for export permits for the entire collection of Ferdinand Bloch-Bauer, including the artworks in Karl's apartment and those sought from the Art Collecting Point in Munich. In the course of this meeting, Dr. Rinesch told Dr. Garzarolli that Ferdinand's heirs would acknowledge the will of Adele Bloch-Bauer and allow the AUSTRIAN GALLERY to keep the six Klimt paintings mentioned in that will. Dr. Rinesch made this agreement with the hope and expectation that Dr. Garzarolli would permit the heirs to export other artworks. Dr. Rinesch knew that Dr. Garzarolli's cooperation was absolutely necessary if he was to obtain export permits for any of the artworks from Ferdinand's collection.
50. Dr. Rinesch saw the probate files for Adele's will for the first time on April 10, 1948, the same day he met with Dr. Garzarolli and agreed that the heirs would “donate” the Klimt paintings. He apparently realized that Adele's will was not legally binding, but purportedly believed at the time that the evidence of Ferdinand's purported promise to fulfill his wife's wishes would be sufficient to give the museum a claim, as he reported to Robert Bentley on April 11, 1948.
51. Dr. Rinesch's April 11, 1948 report to Robert Bentley was mistaken and his legal conclusion concerning the enforceability of Ferdinand's purported promise was incorrect. In fact, Ferdinand's purported promise had no binding effect and was legally unenforceable. Dr. Rinesch most likely did not know at the time that Ferdinand’s purported promise was never memorialized. In later documents, Dr. Rinesch alleged that the heirs had had the ability to prevent the Klimt paintings from going to the AUSTRIAN GALLERY, and successfully argued that their "donation" to the museum justified the granting of export permits for other artworks.
52. On April 12, 1948, Dr. Rinesch executed a document purporting to acknowledge on behalf of the heirs of Ferdinand Bloch-Bauer the intention expressed in Adele's will concerning the Klimt paintings. Dr. Rinesch possessed no valid legal authority to enter into this agreement, and the AUSTRIAN GALLERY, contrary to ordinary and customary practice, never requested proof of his authority, or confirmation in writing by the heirs, even though Dr. Rinesch asked that the agreement be confirmed with his client Robert Bentley.
53. On or about April 12, 1948, Dr. Rinesch allowed the AUSTRIAN GALLERY to pick up the Klimt painting Houses in Unterach am Attersee from Karl's apartment.
54. On April 13, 1948, Dr. Rinesch submitted to the Federal Monument Agency a lengthy application for export permits for the remainder of Ferdinand Bloch-Bauer's art collection. Dr. Rinesch sent a copy of the application to Dr. Garzarolli asking for his support for the application, concluding in his cover letter, “I rely on your sense of justice.”
55. Although not without difficulties caused by Dr. Garzarolli and Dr. Demus, over the next 18 months Dr. Rinesch obtained export permits for almost all of the other recovered artworks. Still fighting for export permits in July 1949, Dr. Rinesch wrote:
The Bloch-Bauer heirs have, to document their interest in the public Austrian collections, in the most loyal way agreed that the major works of the Austrian painter Gustav Klimt from the Bloch-Bauer collection may remain at the AUSTRIAN GALLERY as a bequest. Even if this bequest was originally already foreseen in the will of Ferdinand Bloch-Bauer’s deceased wife, the heirs certainly had the ability to prevent the fulfillment of this bequest, because in the meantime the financial circumstances of the testatrix’s family had changed catastrophically and also the remaining conditions of the bequest had fallen away through the experiences of the Third Reich.
56. Dr. Rinesch enlisted the support of Dr. Garzarolli, who now agreed to approve lifting the export restriction on several remaining works, based on the purported donation of the Klimt paintings:
The AUSTRIAN GALLERY has recently studied the question again and believes that for the following reasons approval of export can be recommended for both paintings without exception. Namely, the heirs of Ferdinand Bloch-Bauer have immediately agreed to acknowledge and accept Ferdinand’s declaration that in the event of his death he wished to follow the wishes of his deceased wife to donate the paintings by Gustav Klimt to the AUSTRIAN GALLERY, despite various transactions by Bloch-Bauer’s attorney during the Nazi era that extremely worsened the situation of the AUSTRIAN GALLERY, and thereby established a way for the AUSTRIAN GALLERY actually to receive this bequest.
57. In the course of seeking export permits, the heirs were also required to donate one further work to the AUSTRIAN GALLERY, as well as 19 porcelain settings and 16 Klimt drawings to other federal museums. A watercolor and 15 porcelain settings had to be traded for comparable, but probably inferior, substitutes from the federal museum collections.
58. With the assistance of Dr. Rinesch, the AUSTRIAN GALLERY also obtained the Klimt painting Beechwood from the Städtische Sammlungen, and a notarized agreement from Gustav Ucicky to donate his Klimt paintings, including Schloss Kammer am Attersee III, to the AUSTRIAN GALLERY after his death, which occurred in 1961.
59. The government continued to fight the heirs in other ways, dragging out the negotiations over the return of Ferdinand’s sugar factory for over ten years. The heirs and their attorney finally gave in, settling for a payment of just $600,000 from the sale of the sugar factory. As part of the settlement, they were forced to give up the beautiful Elisabethstrasse home, which to this day houses the offices of the Austrian railroad. They also had to sell a number of the returned artworks to pay taxes the government said were due from the factory. Nothing was ever retrieved from Czechoslovakia. Almost all of the fabulous porcelain collection was never returned, and pieces continue to show up at auction – the owners purportedly immune from suit under Europe’s “bona fide” purchaser rules, despite the fact that it is difficult to imagine how purchasers could have been unaware that these were snatched from their rightful owners.
60. From Ferdinand’s once enormous personal estate, little or nothing remained. The post-war restitution process in Austria had turned the old maxim on its head – to the defeated went the spoils.
