Hunter Biden screenshot from the The Baer Faxt YouTube video, https://www.youtube.com/watch?v=osSLrjrAmEc&t=41s
In 2021, when a New York art gallery debuted paintings by Hunter Biden with asking prices as high as $500,000, the White House said that buyers’ identities were known only to the gallery, not to Hunter Biden himself.
Internal documents from Georges Bergès Gallery show Biden sold $1.3 million worth of art. Of that amount, a single buyer bought 11 Biden artworks for $875,000. The identity of the $875,000 buyer is unclear, Business Insider reported.
Business Insider claims to know the identities of two Hunter Biden “friends” who bought his art. One buyer is Elizabeth Hirsh Naftali, a Los Angeles real-estate investor and Democratic donor who has given $13,414 to the Biden campaign and $29,700 to the Democratic Congressional Campaign Committee so far in 2023. In 2022, she hosted a fundraiser headlined by Vice President Kamala Harris.
In July 2022, eight months after Hunter Biden’s first art opening, President Joe Biden announced Hirsh Naftali’s appointment to the Commission for the Preservation of America’s Heritage Abroad. An administration official told Insider that her appointment was recommended by former House Speaker Nancy Pelosi and there was no connection between her art purchases and her appointment. They said that Hirsh Naftali was involved with Jewish causes in Los Angeles and Israel — valuable background for a commission that works to preserve many historic Jewish sites across Europe.
In the past, Hunter Biden has privately suggested that he could arrange to have friends seated on the commission, Insider reported.
Another Hunter Biden art buyer known to him, according to three people directly familiar with the matter, is Kevin Morris, a Los Angeles attorney who has become Biden’s confidant and financial backer, Business Insider reported. Morris’ ownership of Biden’s art was reported by The New York Times. In addition to collecting Hunter’s artwork, Morris lent Hunter Biden around $2 million, the Times reported, helping him pay off back taxes and avoid felony penalties under a June settlement with the Department of Justice.
An NBC News analysis of Hunter Biden’s hard drive shows he and his firm earned about $11 million from 2013 to 2018 through his roles as an attorney and a board member with a Ukrainian firm accused of bribery and his work with a Chinese businessman accused of fraud. NBC News analyzed a copy of Biden’s hard drive and iCloud account and documents released by Republicans on two Senate committees.
Hunter Biden appears to have dodged possible money laundering and bribery charges, among others, as part of a plea agreement with federal prosecutors that is expected to result in no jail time for him. He will plead guilty to two misdemeanor counts of failing to pay federal income taxes on at least $3 million he earned in his overseas business dealings, and will participate in a pretrial diversion arrangement for a felony firearms charge after lying about his drug when buying a gun in 2018.
The question of whether the Hirsh Naftali appointment was an ethics violation depends on both the timing of her purchase and whether the art was purchased at fair market prices, or for a lot more, in which case it could be considered a gift, said Kedric Payne, vice president and general counsel at Campaign Legal Center, in a Business Insider report.
“Legally, you might not have a problem,” Payne said. “But with the appearance, it’s a lot to try and explain.”
Do appearances suggest that Hunter Biden did business in Ukraine — a hot spot for political corruption — got his money out, and then started selling art for big bucks to friendly buyers?
Here are five things to know about art being used for money laundering.
A bipartisan Senate investigation released in July 2020 declared that the art world is considered the largest legal unregulated industry in the U.S. It’s ultra-secretive and susceptible to money laundering and sanctions evasion, CNN Business reported.
Most sales happen far away from the public eye through private dealers untouched by anti-money laundering requirements. For example, the Senate report included an interview with a private New York dealer who had no written anti-money- laundering policies and “instead relied on her gut.” She also said “she relies on the advice of lawyers with expertise in AML and related areas and looks for potential red flags in transactions,” CNN reported.
“Given the intrinsic secrecy of the art industry,” the report concluded, “it is clear that change is needed in this multi-billion dollar industry.”
The global art market was estimated at $67.8 billion worldwide in 2022, according to the international art fair Art Basel. Money laundering and other financial crimes account for about $3 billion of that, the United Nations Office on Drugs and Crime reported.
The Arts Global Market Report 2023 cites a much higher number, saying the global art market grew from $441 billion in 2022 to $579 billion in 2023.
Art sellers are not obligated to report large cash transactions to a governing authority, unlike banks, life insurance companies, casinos, currency exchangers, and precious metals dealers. In fact, dealers can keep the names of buyers and sellers anonymous, the International Monetary Fund reported. They do not have to file suspicious activity reports with the US Treasury Department if they have doubts about the origins of the money they are being paid, unlike U.S. businesses that deal in large sums of money.
“Art is a very attractive vehicle to launder money,” said Peter D. Hardy, a former U.S. prosecutor who advises corporations and industries on anti-money-laundering requirements. “It can be hidden or smuggled, transactions often are private, and prices can be subjective and manipulated—and extremely high.”
Art money laundering involves buying and selling art and antiquities, often at inflated prices, to disguise the origins of illegally-obtained funds and reintroduce them into the legitimate economy. That’s according to Comply Advantage, a U.K.-based regulations technology company that provides software to help detect and manage risks associated with anti-money-laundering and fraud.
Growing activity in the global art market makes it susceptible to potential misuse, the Financial Action Task Force (FATF) said in its 2023 guidance paper.
FATF is a global money laundering and terrorist financing watchdog, an intergovernmental organization founded in 1989 by the G7 to develop policies to combat money laundering.
In addition to “works of art” and “antiquities,” the FATF also includes “cultural objects” in its sector-specific guidance due to the prevalence of forgeries and illegal trafficking being used to launder funds.
Common techniques and tactics of art money laundering include:
Bribery: The FATF highlights multiple case studies in its 2023 report that show corrupt officials received high-value art as a bribe or kickback rather than receiving payment directly through the financial system. This method allows the involved parties to avoid moving funds between bank accounts, complicating attempts to trace the funds, Comply Advantage reported.
Price inflation: Since the artwork valuation process is not regulated, criminals and co-conspirators often use this to purposely drive up the price at auction, allowing them to launder large amounts of money in one sale.
Anonymity: Regulations in many jurisdictions enable criminals to maintain anonymity at auctions through agents, brokers, advisors, and other intermediaries hired to represent them. This can make it difficult for art market participants to fully understand who they are doing business with.
