"Portrait of Wally," one of the two disputed Egon Schiele paintings once plundered by the Nazis and held in New York under a grand jury subpoena until Tuesday, will not be going home to the Austrian foundation that lent it to the Museum of Modern Art after all.
Hours after New York's highest court set aside the subpoena, the United States Attorney's office for the Southern District of New York obtained a seizure warrant for the painting. The warrant, requested by the United States Customs Service, cited Federal laws prohibiting smuggling, allowing seizure of stolen property and governing violations in customs laws.
"Wally," which the Modern had borrowed from the Leopold Foundation in the fall of 1997 for a three-month exhibition, was claimed on Dec. 31, 1997, by the heirs of Lea Bondi Jaray, a Jew who had to leave the work behind when she fled Vienna just before World War II. The painting was sent to Austria's National Gallery, which later traded it to Dr. Rudolf Leopold.
The warrant did not cover "Dead City," which has been claimed by another family and can be returned. "Wally" will remain at the Modern.
"This is a bizarre situation," said Stephen M. Harnik, the lawyer for the Leopold Foundation, who said he was called by the Department of Justice on Tuesday afternoon. "They had 20 months to investigate this, and at 4 P.M. they didn't know if they were interested in one painting or both. An hour later, they called back and said 'Dead City' is free to go. And then two hours later they said they had obtained a warrant for 'Wally.' "
Mr. Harnik said he had been questioned about the paintings by the Justice Department in 1998.
On Tuesday, the New York State Court of Appeals ruled that state law protects art lent to New York institutions in all cases.