The Extortion

Meanwhile, despite his reservations, 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. On April 2, 1948, Garzarolli wrote to Otto Demus, head of the Austrian Federal Monument Office, expressing his strategy with regard to the Klimt paintings and other artworks in Ferdinand's collection:

I ask that the acquisition and trade proposals only be made when the attorney general has given the okay; in other words, for tactical reasons a delayed procedure is requested.

Demus immediately telephoned and met with Rinesch on April 3, informing him that the Austrian Gallery desired a number of artworks from Ferdinand's collection, including the Klimt paintings. He told Rinesch that none of the paintings would be allowed to be exported if the heirs disputed the Austrian Gallery’s ownership of the Klimt paintings.  Based on this meeting, Rinesch decided (without first obtaining the informed consent of his clients, and obviously under extreme duress) to agree to ”donate” the Klimt paintings to the Austrian Gallery in order to get the absolutely necessary support of Garzarolli and Demus for export permits for the other works recovered from Ferdinand’s collection, many of which were being held at the Munich Art Collecting Point.  Rinesch met with Garzarolli to confirm this deal on April 10, 1948 – the same day he first saw Adele's will and concluded, "This is not in the form of a bequest."  On April 13, Rinesch sent his five-page request for export permits for the rest of the Bloch-Bauer collection to Demus, with a copy to Garzarolli adding, "I rely on your sense of justice."

In this underhanded way, Austria managed to avoid having to return the Klimt paintings to Ferdinand’s heirs.  In the end, the heirs were required to donate additional paintings, drawings and porcelain, and trade several other artworks, in order to obtain export permits for the remnants of Ferdinand’s once enormous collection.  Still fighting for export permits in July 1949, 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.

He enlisted the support of Garzarolli, who now agreed to approve lifting the export restriction on several remaining works, based on the 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.

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 palais, 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. Most of the fabulous porcelain collection was never returned, and pieces continue to show up at auction – the owners immune from suit under Europe’s ”bona fide” purchaser rules. 

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.