Presidential Power

From Drones to Drachms

By MICHAEL MCCULLOUGH          February 21, 2013

From the very beginning of the Republic, Americans have always delighted in accusing their chief magistrate of having totalitarian ambitions. With extraordinary derisiveness, every president since FDR has been called a “fascist” for alleged subversion of the Constitution, even in spite of Orwell’s observation in 1944 that misuse of the term had rendered it “almost entirely meaningless.” As a result, it’s become tradition for the wielder of power to be regarded with mistrust, a disagreeable but perhaps necessary state of affairs for both president and people.

Thus, it’s not surprising to find two very different demonstrations of the royal prerogative being criticized in recent weeks: the use of drones to kill Americans and import restrictions on ancient coins. And if you are remotely interested in the proper functioning of our government, each example provides ample opportunity for evaluation and reflection.

It is widely known that the “executive power” of the President enumerated in Article II of the Constitution was meant to create a strong executive. The Framers of the Constitution, who lived through a disastrous government under the Article of Confederation, viewed legislative government as too fragmented and episodic. It’s less known that the role of the Federal courts in explicating constitutional law is mentioned nowhere in the Constitution. Judicial review of executive and legislative actions was created out of whole cloth by the Supreme Court itself in the famous case of Marbury v. Madison. And since the power of the courts constitutional review is not structural to the Constitution but only a practical condition upon its successful operation, it need not be exercised whenever a court perceives an invasion of the Constitution. Courts always consider the threshold question of how importunately the occasion demands an answer. Sometimes it’s better to leave the issue to be worked out without an authoritative solution and other times the circumstances require a decision.

Recently, the Department of Justice released a “White Paper” on the legality of killing American citizens who are believed to be “senior operational leaders” of al-Qaida or “an associated force.” Despite the obvious vagueness of terms that leaves one wondering how remote the “association” need be to avoid the breach, the central concern here is use of executive power without some form of judicial review.

The United States after September 11th, our “Homeland America,” has new structures of constitutional democracy created by the Bush the Younger and Obama Administrations. In consequence of this, people have been denied rights that have long been regarded as fundamental, giving rise to indefinite, incommunicado detention, torture and abuse, and the denial of a fair chance to contest life-and-death charges.

The “White Paper,” written by government lawyers, makes a pointed but unsubstantiated case for an unconstrained executive, necessary to deal with the security threats of today’s world. This new view sees terrorism and associated threats to Homeland America as qualitatively different from past security threats. As a result, a more flexible kind of “executive power” is required; one that cannot be readily accommodated within the traditional scheme of judicial and legislative oversight. As it turns out, the unique qualities of “executive power”- what Hamilton described in the Federalist Papers as the capacity to act with “decision, activity, secrecy and despatch” – are unique and essential advantages in this new world. And the nature of warfare against these new enemies relies more on intelligence gathering and covert action, so waiting for the courts or Congress to review or ratify executive action may compromise America’s ability to defend itself.

The problem with this new theory of executive power is that neither the nature of structural constitutional interpretation nor the security policy premises on which these claims are based support the case for the kind of expansive executive power found in the “White Paper.” Fundamentally, a theory of structural constitutionalism should not depend so heavily on something as transitory as the security threat du jour. It is also difficult to understand how these security threats are so very different from those faced before, and even if they are, one could easily conclude that unchecked “executive power” is not an effective means to meet them.

For the purpose of contrast, the President’s imposition of import restrictions on ancient coins provides a more traditional look at “executive power.” Last week, the Ancient Coin Collectors Guild filed a Petition of Certiorari asking the Supreme Court to review the lower courts’ failure to conduct a “political question” analysis of the President’s actions before dismissing the Guild’s complaint.

Three years ago, the Guild filed its lawsuit alleging that the government failed to comply with specific statutory requirements of the Convention on Cultural Property Implementation Act (“CPIA”). The CPIA imposes certain procedural and substantive constraints on the President’s authority to impose import restrictions on cultural objects. Over time, the President’s authority was delegated down to the Assistant Secretary of State, Bureau of Educational and Cultural Affairs of the State Department. Once the State Department authorized import restrictions on coins from Cyprus and China, U.S. Customs and Border Protection published regulations in the Federal Register imposing those import restrictions.

After briefing and oral argument, the district court dismissed the case without allowing any discovery, prompting an appeal. On appeal, the Guild asked the circuit court to rule that the district court had the authority to review the President’s action and that any import restrictions on coins must be written to comply with the plain meaning of the CPIA (N.B., This correspondent represented three coin organizations in filing an amicus curiae brief in support of the Guild). The court of appeals declined the Guild’s request, saying that anything but the most cursory review of the Federal Register “would draw the judicial system too heavily and intimately into negotiations between the Department of State and foreign countries.”

The Guild wishes to address the Supreme Court to argue that the power and duty to decide constitutional disputes was accepted by the judiciary in Marbury v. Madison. Moreover, the Supreme Court decided over a quarter of a century ago, in a case called Japan Whaling Association v. American Cetacean Society, that “one of the Judiciary’s characteristic roles is to interpret statutes, and [it] cannot shirk this responsibility merely because of the interplay between the statute and the conduct of the Nation’s foreign relations.” And if the Supreme Court agrees, then the Guild will ask the Court to direct the court of appeals to apply the “political question” analysis enunciated in Baker v. Carr, which says that a court can decide to review a presidential decision by applying “a discriminating analysis of the particular question posed, in terms of the history of its management by the political branches, of its susceptibility to judicial handling in light of its nature and posture in a specific case, and the possible consequences of judicial action.”

The “particular question” posed by the Guild is quite narrow: whether the Government promulgated and applied import restrictions on coins in compliance with the CPIA. Courts have ample experience in determining whether a specific grant of power by the legislature is being followed by the President. This matter, argues the Guild, is thus well within the competence of a court to handle. Furthermore, the court of appeals’ dismissal of the Guild’s case because it touched on “foreign policy,” but without performing any further analysis of the particular legal issue actually before the court, places its decision making squarely at odds with that of the Supreme Court and other federal appeals courts, which have applied the “political question” analysis found in Baker v. Carr in a “foreign policy” context. Under these circumstances, the Guild asks the Supreme Court to grant certiorari to secure and maintain the applicability of its decisions by bringing the court of appeals and the two other circuits that have not addressed the issue into line with the decisions of the Court.

While I doubt that Mr. Obama is giving this case much thought, it’s equally doubtful that Supreme Court will ever get another case presenting less benign “consequences of judicial action.” Although, I wouldn’t be taking any bets on the Guild’s chances of getting through the golden doors, as the Supreme Court accepts a mere 1-2% of the cases submitted on appeal. However, the odds get considerably better once the doors close behind the Guild; the Supreme Court has reversed or vacated this court of appeals in 61% of past cases.

But no matter what happens in these two instances, the traditional view of “executive power” is not apt to be revived anytime soon. The portentous reluctance of the judiciary is not more use to us than the capriciousness of our legislators who are constantly trying to figure out what the next “serious” security threat will be when it is plain that the next “serious” security threat is their own stupidity.

Ownership Cui bono

American  Law and Claims to Cultural Property

By MICHAEL MCCULLOUGH          February 14, 2013

There are so many important questions that people who write about cultural property issues never get around to asking. Fascinated as we all are to know the curious circumstance of an object’s removal from a foreign land, the writer never gets around to addressing the more vital questions about the American legal system and how it deals- or does not deal- with ownership rights in cultural property. For instance, does U.S. law provide for a mechanism to deal with a dispute over “looted” cultural property? Does a foreign government have an enumerated right to the return of “looted” cultural property? Many people assume there is- or should be- an absolute right of a foreign government to seek the return of its cultural property. Although this sort of idealism is thought to be central to American jurisprudence, I suggest that American law is chary of the risks involved with entertaining foreign government claims, resulting in the tendency to limit such claims to only the most conspicuous cases.

It is interesting to learn that the word “looted” is mentioned nowhere in the United States Code. Apparently the Congress never deemed the “looted” status of an object something worth considering or worth granting legal significance. Why? My theory is this: the European immigrants to the United States invested scrupulous resource in destroying the indigenous culture of their new home, so much so that the fundamental assumption by the mid-19th century was that all important cultural objects in the United States originated in foreign counties (the corollary to this is that, until relatively recently, there never was any real desire to retain any of the important objects from the Native American cultures). And if all the important objects in your museums and private collections come from abroad, then you really can’t appease every foreign government’s claim of “looting,” which are usually defective on their face for pointing out only the nature of the taking. With the change of a noun or two, we could easily get this discussion on track.

When is a cultural object considered stolen? If an object was stolen, then does the owner have an absolute right to its return? This is a more useful approach to the matter, as the law is not concerned at the outset with how an object was taken- cultural objects have always been taken without consent, and usually by force- but, rather, from whom an object was taken. The difficulty in establishing an individual ownership right in an object considered the property of an entire culture is inherent, but cannot be avoided because, with limited exception, the laws in the United States treat cultural property as personal property that can be freely owned and traded. To put it bluntly, all cultural objects were owned by somebody in a foreign country, and the question in the context of a request for return is whether that somebody is the party making the demand.

Since the 1940’s, US law has prohibited the importation of stolen property: the National Stolen Property Act makes it illegal to transport in interstate or foreign commerce any item known to have been stolen. And an object is stolen if it is taken from its owner without consent and with the intent to deprive the owner of the benefits of ownership. Therefore, in a civil case for the return of an object, a foreign government, or the US government on its behalf, must perfect its claim by proving that the foreign government- and not a private party- owned the object when it was taken. If the foreign government cannot prove ownership in fact, either by deed or by ongoing possession, then US courts will allow them to prove ownership through a law granting the government ownership of all such objects. The only limitation here is that the law granting blanket ownership must clearly and unambiguously declare the foreign state the owner of the objects and the foreign government must actually enforces its own laws as an owner.

At this point I find myself wishing there was a more fitting law attending to the ownership rights of cultural objects taken from foreign countries. The only US law addressing foreign cultural property, the Cultural Property Implementation Act does not prohibit the importation of stolen cultural property unless it was stolen from the inventory of a museum or cultural institution, and the theft occurred after January, 1983; objects from illegal excavations and other takings, as well as objects stolen from museums or cultural sites before 1983, are not covered by this law.

A recent legal case in a Manhattan federal court deals with these very issues and will likely provide us with further guidance once a decision is rendered. The dispute itself is very simple: a man purchased a sculpture at a London auction in 1975. It was kept in his family for thirty five years until his wife decided to sell it at auction in New York at Sotheby’s- hardly a unique story and one repeated time and again during the British Empire’s decline in the last century. The sculpture itself, a sandstone figure of a god, was made in Cambodia over ten centuries ago and was placed in the courtyard of a temple where it stood for most of that time until it was removed at some point that nobody can be exactly sure of. Shortly before the auction was to commence in March, 2010, the Cambodian government asked Sotheby’s to return the sculpture because it was said to be stolen from the temple. The US government then leaned its weight into the debate by seizing the sculpture and starting a legal action in federal court to force the owner to forfeit the object so it could be returned to Cambodia. Not a very complicated story, one would think, on the initial read.

Your first reaction to this tale might be the most useful one; if the Cambodian government actually owned the statute and they can prove it was stolen from them, then they should get it back. If not, then tough luck.

The fundamental question in this case is not really a matter of American law in the first instance, as when an object is stolen in a foreign land, it’s that country’s laws which establish the theft. Once an object is deemed stolen under a foreign law, the National Stolen Property comes into play and the claim can go forward. Which gets to the core of the case against the Cambodian sculpture: did Sotheby’s know that the object was stolen? Or could they have assumed the object was not stolen unless some specific information came to their attention suggesting otherwise? The answers to these questions, like most other things in life, depend upon where you sit.

Sotheby’s believes there was never any proof that the sculpture was owned by the Cambodian government, nor was there any evidence about when the sculpture was removed from Cambodia and by whom. In reading between the lines of their court papers, one can conclude that Sotheby’s either determined or presumed the Cambodian government did not own the sculpture and no specific information in the object’s known ownership history suggested it had been stolen, as there are many reasons why a religious object would have been removed from the country, especially during the time of civil war. Who can argue with a fair assumption on a fair day?

The US Department of Justice believes the temple was built by a Cambodian king in the 10th century and ownership of the temple was passed to successive regimes down through the centuries until the French colonized the region. The French provincial laws from colonial Indochina establish that the temple complex was owned by the French colony, which then passed ownership by succession to the modern Cambodia state. If this is true, it follows that Sotheby’s should have known that the temple complex and all of the structures on it were owned by the Cambodian government.

Sotheby’s argues that the theory of the temple’s continuous succession of ownership from the 10th century onward is undocumented and the French colonial laws are unclear and cannot be recognized under the National Stolen Property Act as establishing the Cambodian government’s ownership in the sculpture. The government, they go on to say, cannot infer knowledge of a theft based upon obscure French provincial laws, and without actual knowledge of the theft they cannot be guilty of importing or handling stolen property.

It’s true that an object can only be considered stolen under US law if the foreign country’s declaration of ownership is clear and unambiguous, as well as actually enforced as such. The US government’s theory of the Cambodian government’s ownership is a novel one and untested by previous court decision. It will be up to the Judge Daniels to decide whether succession in ownership of the temple by political regimes coupled with the French colonial laws are reliable markers of the sculpture’s ownership.

The irony here can’t be avoided: the sculpture may have been removed from the temple to avoid the wrath of the Khmer Rouge, who, in the early 1970’s, were not only slaughtering hundreds of thousands of innocent people but cutting down large parts of Cambodia’s historical past, with particular vitriol for its religious icons. And there can be no doubt that the United States’ illegal carpet bombing of the Cambodian countryside in 1970 played some role in fall of the Cambodian government leading to the ascendancy of the Khmer Rouge regime, although the exact impact is still being debated by historians. Perhaps the sculpture was rescued from the temple by concerned citizens and sold in order to insure its protection- it wouldn’t be the first time a baby was put into a basket downriver in the hopes of its survival. But the resolution of this case depends primarily upon whether the Cambodian government owned the sculpture at the time of its taking.

Writing a Wrong

New York Changes its Laws to Protect Artists

By MICHAEL MCCULLOUGH          February 7, 2013

In an interview in 1976 with Barbaralee Diamonstein-Spielvogel , the great dealer Leo Castelli said, “[t]he function of an art dealer, well, can be various; certainly, a good art dealer, an art dealer who really cares for art and not about making money, should be to find new artists, make them known to the public.” When asked the insightful question about his role in the business of selling art, he responded, “I am more than somebody who wants to sell paintings. The selling of paintings seems to be a secondary thing. I have to, of course, sell them to finance my activity, but the activity really is the important game, my gallery. And I am very happy to just tag along in the midst of tremendous financial difficulties as long as I can keep the gallery going.”

That, in my opinion, is the way that the art market is supposed to work. Not to say that there is anything wrong with art dealers making money- the economics of operating a gallery have changed dramatically since Castelli’s time- but the basic principal should still stand: at no point in the calculation should the dealer’s interest in the artwork be greater than the sum total of the artist’s. The good dealer understands that the primary objective of a gallery is to promote the artist and the artwork, and there is plenty of money to be made along the way. But, there are people pretending to be art dealers in order to have fun, to throw big parties and to make buckets of money, even as the artists’ interests are abandoned as secondary concerns. And when it all goes horribly wrong with these ventures, as it always does, the death knell sounds when the dealer makes the insalubrious choice to pay the gallery’s debts before paying the artist.

Take the case of Sae Hyun Lee, a talented painter from South Korea, who, like most other artist, painted for years before receiving critical acclaim for his work. After several successful solo exhibitions in Europe, Mr. Lee received an invitation in 2011 from Nicholas Robinson Gallery for a solo show in New York. Ten paintings were consigned immediately. Two of the paintings sold before the show was over and Mr. Lee received his commissions, but things went very silent even before the gallery stopped returning phone calls about the return of the unsold artworks. It wasn’t long before the arrival of a terse letter from Nicholas Robinson’s attorneys about how the gallery was out of money and contemplating bankruptcy. Sadly, as it goes, neither the artwork nor the money could be accounted for properly, which means not at all.

This might have been the end of the story, save for the fact that Mr. Lee is represented in Seoul by Chan-kyu Woo of Hakgoje Gallery, a dealer cast from the Castelli mold. Mr. Woo engaged a New York lawyer, Henry Jung to press for the return of the artwork. Mr. Jung is a former Assistant District Attorney and a very good lawyer who had the very unpleasant experience of being my roommate in law school. Only after Mr. Jung filed a lawsuit in federal court last March, the judge issued a temporary restraining order against the gallery, and Nicholas Robinson himself appeared at a court hearing, did it become clear that Mr. Robinson had sold the paintings and spent the $370,000. Unfortunately for Mr. Lee, Mr. Robinson’s pockets were a bit light; in fact, they were empty. “How could this happen in New York, of all places?” asked Mr. Jung.

It’s not supposed to. In the 1960’s, the Arts and Cultural Affairs Law was passed in New York state to give artists certain protections: artworks consigned by an artist were deemed trust property and the proceeds of their sale were considered trust funds. This was done to dissuade irresponsible people from getting into the gallery business. The problem with the law was that it did not include any measures for enforcement and penalties, which, in a perverse way, enabled a dealer to use an artist’s sales proceeds to pay the gallery’s own operating expenses. If the gallery failed financially, the artist lost the money. In essence, a gallery that absconded with artwork or funds was subject to the same penalties as the drycleaner who failed to return your suit, although the dry cleaner would likely be decent enough to speak with you in person instead of through a lawyer, and might even apologize for the inconvenience.

The District Attorney’s offices might seem like the next port d’escale for Mr. Lee, as selling somebody else’s property and taking the money sounds like it should be a crime. Like most other things in life, it’s more complicated than it seems. That is to say, the failure of a dealer to pay the artist becomes a crime only if the dealer’s inability to pay is itself the result of an underlying criminal act. You may recall Larry Salander went to jail because, among other things, he used the proceeds of art sales to pay off prior debts in a Ponzi scheme. It would also be a criminal act for a dealer to use an artist’s money to enrich him or herself personally. In either example, the crime would be grand larceny which in New York State is pedigreed, like most other things, based upon the dollar amount involved. Law enforcement officials are often interested in art fraud cases, as they represent a welcomed break from drug dealers and purse snatchers; nevertheless the criminal nature of the event needs to be fairly certain for them to get involved. At first blush, the failure of a dealer to pay an artist is not necessarily indicative of any crime, perhaps just an unfortunate business decision. As a result, many of these cases are not investigated and artists, like Mr. Lee, are forced to bring civil lawsuits against galleries and gallery owners in order to protect their rights.

Remarkably, the balance of power shifted in October to favor the artists; a new law was enacted in New York giving teeth to the trust property and trust fund provisions in the existing law. Now, the artwork and the sales proceeds are considered property held “in statutory trust” and cannot become the property of the gallery or be subject to any claims by gallery’s creditors. Perhaps more important, the law adds clear penalties for its violation: a dealer who absconds with artwork or an artist’s money commits a misdemeanor criminal offense and is subject to criminal prosecution and fines. I’ll concede that it’s rare for a defendant convicted of a misdemeanor charge to serve jail time for a first offense, but the new law is ripe for judicial firmness in the most outrageous cases and always a peril for the previously tarnished.

Of course, all of this comes too late for Mr. Lee, as American jurisprudence abhors the ex post facto imposition of new criminal punishment for prior acts. Nonetheless, our government in Albany has finally acted to protect one of New York’s greatest assets, its artists, who are no longer subject to the caprice of businessmen who treat the loss of a painting like a bad investment in a barrel of oil or a bushel of corn. Everybody- well, almost everybody- knows that New York City’s vivacity emanates from the young people who come here to share their creativity with the world. How much longer could New York be called “the art market capital of the world” if the law couldn’t protect vulnerable artists?