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A federal judge has ruled Egon Schiele's Portrait of Wally (1912) cannot be seized from Austria's Leopold Museum by the U.S. government, despite the fact that the work was stolen by the Nazis from its original owner. According to District Judge Michael Mukasey, since the painting was recovered by U.S. forces after World War II and transferred to a Jewish collector -- though not the right one -- it cannot legally be considered stolen now.

Portrait of Wally was acquired in 1937 from Viennese dealer Lea Bondi Jaray by the art dealer Friedrich Welz, who "Aryanised" the property of several Jewish art collectors. After the war, U.S. forces seized the Schiele and several other Welz pictures in an attempt to return them to their original owners. The painting was erroneously given to heirs of Schiele collector Heinrich Rieger, who died in Theresienstadt. Reiger's surviving relatives sold the picture to the Austrian Gallery, from which the Leopold obtained it.

The Schiele painting was one of two works by the artist on loan to the Museum of Modern Art for the show "Egon Schiele: The Leopold Collection" that were subpoenaed by Manhattan district attorney Robert Morgenthau in 1998 -- though art works on loan to museums are usually immune to such claims. The latest ruling comes in a suit filed by U.S. attorney Mary Jo White under a federal law that forbids transporting stolen goods in foreign commerce. The painting is currently in storage in New York.

As the strike by members Professional and Staff Association of the Museum of Modern Art enters week 12, the labor-union underpinnings of the world of high culture are beginning to show. Members of the musicians union have refused to cross the picket line, leading to the cancellation of a concert series, and members of the projectionists union have similarly supported the strikers, hindering a MoMA film series. On the other hand, high-priced lawyers from Proskauer Rose LLP -- which represents management in the dispute -- sashayed across the picket line for a July 18 reception. In a bit of street theater, MoMA's hard-hitting Proskauer Rose attorney Robert Batterman baited the protesters by posing for photos next to their inflatable rat, which was wearing a sign reading "Ratterman," while the strikers met the taunt with loud jeers. Also happily siding with management was Vanity Fair, which crossed the line to screen a documentary about Frances Marion, one of the founders of the Screenwriters Guild, at the museum on July 19. At issue is what union members call healthcare givebacks, blatant union busting, job security and substandard wages that start at $17,000 a year for full-time work.

The Museum of African Art and Edison Schools, the country's largest school management company, are negotiating with city officials to build a combined museum, school and corporate headquarters at Fifth Ave. and 110th St. by Central Park, reports the New York Times. The plan calls for the purchase of four city-owned parcels of land -- though the city would have to give a zoning variance for the scheme. Edison has promised to raise money for the development and to help the museum raise $10 million for its endowment.

ARTnews Magazine's summer issue features its tenth annual list of the world's 200 most active collectors, compiled from interviews with art world professionals. The top ten, in alphabetical order, are investment banker Leon and Debbie Black, financial services and housing development businessman Eli and Edythe L. Broad, the Gap's Donald and Doris Fisher, entertainment mogul David Geffen, chemical and buliding materials manufacturer Samuel and Ronnie Heyman, investment financier Henry R. and Marie-Josée Kravis, cosmetics manufacturer Ronald S. Lauder, French luxury-goods tycoon François Pinault, ad mogul Charles Saatchi and investment guru Charles and Helen Schwab. A number of celebrities also made the list, including British rock stars David Bowie and Elton John, richest nerd in the world Bill Gates, comedian Steve Martin and actor Jack Nicholson.

Mexico's federal deposit insurance agency (IPAB) is putting more than 300 works of art from seized banks on the auction block, reports the Wall Street Journal. The Aug. 10 sale is being held at the Louis C. Morton gallery in Mexico City to reduce taxpayer costs resulting from the government's rescue of the country's failed banking system and includes top works by masters including Conrad Wise Chapman, Carlos Merida, Sebastian Merida, Vicente Rojo, David Alfaro Siqueiros, Juan Soriano and Rufino Tamayo. The lot does not include two seized masterpieces by José María Velasco worth an estimated $7 million, Vallengreda (1861) and Pueblo de Guelatao (1889), which instead are being loaned to museums of the National Institute of Fine Arts because of their cultural value.

Customs officials at St. Petersburg's Pulkovo 2 International Airport are clashing with bureaucrats at Russia's Culture Ministry, reports the St. Petersburg Times. According to the newspaper, the airport officials are seizing "national treasures" from tourists who refuse to pay duty equal to the value of the objects, and sending the seized items to the ministry's Board for the Preservation of Cultural Valuables. But the board complains that it is receiving too much junk, including rusty tacks, old welding torches and pieces of jugs. Furthermore, the board is required to distribute the items to state museums, but the museums refuse to accept the material. And local artists are complaining, saying that the snafu is discouraging potential collectors.

The Chelsea building at 535 West 22nd Street across the Illeana Sonnabend gallery is going to have a host of new art tenants come fall. Several SoHo holdouts are finally joining their colleagues in Wee-Chee, including Marianne Boesky, CRG, Yancey Richardson, Friedrich Petzel, Julie Saul and Frederieke Taylor. And Leslie Tonkonow Artworks + Projects is moving down from the 12th floor of the Starret-Lehigh Building on 26th Street in October. Tonkonow's final exhibition at her present location opens Sept. 5 and features works by Tom Bamberger, Ellen Brooks, Miranda Lichtenstein, Andrea Robbins and Max Becher, Tokihiro Sato and James Welling, among others.

Former East Village painter Keiko Bonk, who departed the sunny fields of New York City for her native island several years ago, is running for mayor of Hawaii Island on a reform platform that calls for local empowerment and the development of a new economy based on sustainable agriculture, research, cultural and natural tourism and health. Bonk, who showed at Piezo Electric in the 1980s, was known for her hyper-romantic paintings as well as her performances with the rock group His Master's Voice and the East Village Orchestra. The Green Party politician's website features campaign information and a photo album that includes images from her more bohemian days.

Legendary bombshell Mamie Van Doren has turned to art making in the tradition of such avant-garde artists as Yves Klein and Farrah Fawcett. "Very limited edition" nipple prints by the buxom 67-year-old star of such films as Untamed Youth (1957) and High School Confidential (1959) are available for $59.95 plus $4.95 for postage and, ahem, handling at her website (click on "Autographs" and scroll down for a picture of the artist at work).

-- compiled by Giovanni Garcia-Fenech
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