Modern Art is Funding Terrorism: The Case of Nazem Ahmad
Nazem Ahmad, a Lebanese businessman and avid art collector, proudly displayed works of Picasso, Basquiat, Warhol, and “big name contemporary artists” in his personal collection. His Instagram account, which has since been deleted, posted daily images of works he was interested in and boasted 172,000 followers at its height. But despite the flashy displays of artwork online, there came to be a much deeper and darker twist to the supposedly innocent account. In January, the United Kingdom’s National Crime Agency seized 23 works from Ahmad’s collection–together worth $1.3 million–and issued a public amber alert to bring awareness to how criminals like Ahmad are able to hide highly valued possessions like art in storage facilities.
This seizure is the most recent step in British and American investigations into Ahmad, who was charged with financing and laundering money for the Lebanese political organization Hezbollah through his art and diamond dealings. Founded in 1982, Hezbollah has been labeled a terrorist organization by the U.S. and its allies since 1997 but remains a major Shiite political party in Lebanon. Ahmad’s connection with Hezbollah can be traced back to 2001, but he wasn’t recognized by the U.S. government as a major financier of the group until the end of 2016. In 2019, the U.S. sanctioned Ahmad’s business deals with American companies. Likewise, the United Kingdom implemented sanctions against Ahmad in 2023, freezing all of his UK assets and preventing him from trading within their art market. The U.S. also charged Ahmad and eight others with money laundering and evading sanctions shortly after as well.
Despite the sanctions on Ahmad’s businesses, he continued his dealings with U.S. entities while being based out of Lebanon. The privacy of the art market enabled him to conduct business through anonymous shell companies, ultimately allowing him to commission works by American artists, transport them through American airports, and export over $234 million in art and diamonds in his first three years of being sanctioned. The New York Times reported that Ahmad conducted deals with “more than a dozen” American artists and art galleries that were unknowingly assisting his crime.
Ahmad purchased works from a Chicago gallery and artists based in New York and California without raising suspicion. He did so with the help of his daughter, Hind Ahmad, who also runs his art gallery in Beirut. She was identified as having been conducting business on Nazem Ahmad’s behalf since he was sanctioned in 2019. Hind Ahmad denies her family’s connection to Hezbollah, claiming that her gallery wouldn’t benefit the terrorist group because the paintings sell for only a few thousand dollars. In her interview with L’Orient Today, she claimed that the U.S.’s interest in Ahmad represented a greater “war against Shiite Muslims.”
Hezbollah Fighters at a Ceremony.
Photo Credit: khamenei.ir, CC BY 4.0
Ahmad’s sanctions and consequent arrest are not a standalone incident but rather reflect a growing relationship between the art world and terrorism. A 2020 bipartisan Senate report stated that the art market’s “secrecy, anonymity, and a lack of regulation create an environment ripe for laundering money and evading sanctions”. Additionally, modern art is often lightweight and inconspicuous and can therefore easily be transported, stored, and resold without raising alarms. Criminals like Ahmad can also easily manipulate the price of an artwork, which border control officers then fail to spot because they lack training in the appraisal of contemporary works.
In February 2022, one year before Ahmad was charged, a Senate investigation discovered that Russian oligarchs subject to U.S. sanctions due to their connection with President Putin had used expensive art purchases to continue their U.S.-based transactions. The oligarchs, brothers Arkady and Boris Rotenberg purchased millions in art under anonymous shell companies. The investigation also references a 2015 scandal in the Nigerian Oil Industry in which illicit funds were laundered through American assets like high-value art.
Widespread criticism of the contemporary art market stems from its corruption and association with crime. Author and art market expert Georgina Adam explains that artworks being used as a vehicle for criminal activities such as laundering and tax evasion causes artists to “churn out works in market-approved styles, bringing about a decline in quality.” Auction houses like Christie’s and Sotheby’s function like “luxury brands”, resulting in higher prices and fast inventory turnaround. In Adam’s book Dark Side of the Boom: The Excesses of the Art Market in the 21st Century, she explains that while the greatest issue with the art market is money laundering and tax evasion, people are also concerned with what the market’s exploitation is doing to art itself. This criticism is why scathing articles like the National Post’s “Modern Art is Garbage, and Here's More Proof”, and Artsy’s “Why ‘Ugly’ Paintings are so Popular” are commonplace.
Peter R. Stern, a Manhattan attorney, said "The art trade is the last major unregulated market.” In recent years, however, some new restrictions have been put in place by the art market’s biggest players–the U.S. and the U.K. In 2018, the U.S. passed the Illicit Art and Antiquities Trafficking Prevention Act, which required increased record-keeping of cash purchases and background checks on clients. In January 2020, the UK started requiring the identity of both the buyer and the seller of an artwork to be known for deals over 10,000 euros. The regulations also require a photo ID and proof of address. The case of Nazem Ahmad only reveals that, despite these regulations, the art market is still exploitable.
In July of 2023, the Financial Action Task Force (FATF) hosted a webinar in which experts discussed what behaviors should raise alarms in the art market. These included inflated prices, the use of cash, and the use of social media or other intermediaries to complete transactions. The FATF’s February 2023 report outlined challenges to tackling the exploitation of the art market for terrorist financing, which included “a lack of prioritization” and “limited resources”.
Cracking down on dealings within the art market doesn’t come without repercussions for artists, art dealers, and auction houses. New regulations would throw out the anonymity ensured by auction houses today that is attractive to many buyers, not just ones with ill intentions. The International Confederation of Art and Antique Dealers Associations claims that these requirements put the burden on the market’s “small players”. Wyatt Mills, the artist who unknowingly sold artworks to Ahmad, shares this opinion. In an interview with the New York Times, he said that his job “isn’t to do a criminal background check on anyone buying a painting.”
But even leading auction houses such as Christie’s and Sotheby’s have been forced to cooperate with federal investigations. In 2023, the companies were required to turn over any records of communication with sanctioned Russian oligarchs. And in Mexico, attempts by the government to unveil the drug trafficking industry have instead frozen the art market. Raúl Zorrilla, executive director of the Kurimanzutto art gallery, also refers to the burden imposed by anti-money-laundering regulations. Zorrilla recognizes the necessity of such regulations but suggests that they could be clarified and refined.
As the art market struggles to survive under new government restrictions, the introduction of digital art into the marketposes a new threat. Digital art, especially NFTs, can fall victim to the same exploitations as physical art and more. The ability to transfer digital art over the Internet eliminates confounding factors such as “insurance, transport, or customs duties” and the involvement of an intermediary. Now, it’s possible for two individuals to complete a transaction entirely unbeknownst to the public. Nazem Ahmad’s business deals were traced back to him through the intermediary shell companies. Therefore the private, rapid, and largely unregulated world of digital art is exposing new weaknesses for criminals like Ahmad to take advantage of.
Nazem Ahmad with works in his personal collection.
Photo credit: U.S. Treasury Department