Stefan Koldehoff - 'Art and Crime'

Stefan Koldehoff - 'Art and Crime'


The cover for Stefan Koldehoff's 'Art and Crime'.

This is the kind of book that shows the whole picture by going into tales, one after another other. The tales weave a picture that shows what a complete racket the international art market is.

Over fifty billion USD annually flow through the international art market. Paintings by people like Jean-Michel Basquiat, who died only about forty years ago, today trade for many millions of American dollars, while philistines like Jay-Z and Beyoncé misuse his name.

The art market used to be transparent, in one sense; It used to be impossible for important and expensive artwork to trade hands without the public knowing about it. The price was often not disclosed for most art.

Today, things are different.

In the summer of 2006, it was reported that 221 objects were missing from the Russian department of the Hermitage in St. Petersburg, in particular icons and enamel works from the fifteenth to the eighteenth century with an estimated worth of almost five million US dollars. It was suspected that they had been spirited away to the Far East and South America. According to research by the Moscow daily online newspaper Gaseta, more than 50 million objects have been stolen from Russian museums since the economic re-opening of the country in 1990, among them 3.4 million paintings and 37,000 icons. The newspaper estimated the total value of works formerly held in Russian museums now being sold on the gray market at more than $1 billion.

Art gone missing is one problem. Another is forgery.

Between 1994 and 2011, the New York gallery Knoedler sold work by world-renowned and high-priced artists such as Jackson Pollock, Mark Rothko, Willem de Kooning, Barnett Newman, Clyfford Still and Franz Kline, which turned out to be fake.

Because of neoliberalism, abject poverty, and desperation, another trend is in the ascendant: transforming art into quickly-made bucks:

In December 2005, Henry Moore’s two-ton bronze sculpture Reclining Figure was stolen from the Moore Foundation in Much Hadham, England. The perpetrators brought a flatbed truck to disassemble the sculpture and transport it to a warehouse where it was sawed apart. Later, the pieces of the sculpture are presumed to have been shipped via Rotterdam to China by a junk dealer in Essex. Bronze is increasingly sought after by the electronics manufacturers there. The value of the work of art was estimated to be £3 million; the thieves were paid about £1500 by the junk dealer.

Kolfehoff skilfully displays not only singular or trendy crime but also how art theft works for dictators, genocidal maniacs who don’t care about their minions, and other types of ultra-destructive persons.

One problem in all of this is how wealthy people don’t think enough nor listen to experts. Kolfehoff shows how experts simply prove how an artwork, about to be sold for millions of American dollars, is forged; this has no influence on the buyers, for whom everything is a sham.

The Andy Warhol Foundation for the Visual Arts shut down its authentication board due to its inability to tell whether a Warhol is a forgery or not. This would, no doubt, have tickled Warhol’s sense of humour if he’d been alive.

[…] there are several photos from the 1980s that depict Trump and Ivana, his wife at the time, with Andy Warhol. The world-famous artist eventually developed a real antipathy toward Trump as Warhol’s meetings with him also concerned commissioned work and payment therefor and the relationship soured. On other occasions, Trump claimed that he owned a masterpiece by one of the most important artists of French impressionism. In fact, the picture was demonstrably a copy, a forgery, or even a print. The U.S. president nonetheless claimed several times that he had the original hanging on his wall.

On the other hand, I doubt that Warhol would laugh or care about knowing how his art enables money-laundering, tax evasion, wars, further art theft, starvation at scale, and, ultimately, death in tortorous ways.

Kolfehoff’s story of how Imelda Marcos’s secretary helped to siphon immense amounts of money that belonged to the Filipino population to private coffers is astounding. Manhattan apartments, extremely expensive jewellery, cars, and even holidays all helped the Marcoses to steal around ten billion American dollars from the Filipino population. The national debt was two billion dollars in 1972; today it is more than twelve times that amount. By the government’s own reckoning, 85% of Filipinos live below the U.N. poverty level.

Thanks to a trail of receipts that were found in the Philippines, Imelda Marcos’s name was tied to purchases by her secretary. Hundreds of artworks were smuggled out of the Philippines, their whereabouts still unknown. Art by ‘van Gogh, Monet, and Degas, by Cézanne, Picasso, and Mondrian—and, allegedly, also by Rembrandt, Goya and Michelangelo, although leading experts have cast doubt on the authenticity of the old master works in the Marcos’s possession’.

The Marcoses are not alone in their doing. They’re joined by the likes of Donald Trump (who wasn’t allowed to borrow a van Gogh painting but was offered a golden toilet seat instead, which he said no to), Congolese dictator Mobuto and Diba/Pahlavi, the former Shah of Iran couple, who all squandered billions of American dollars in the shape of art from their population to benefit only themselves.

Of course, that’s not where this stops.

Democratic governments squander money. As both the Panama Papers and the Pandora Papers show, country leaders like Tony Blair like to say one thing and covertly do the opposite. Tax havens are enriched by people at the top of kleptocratic governments. Malaysia’s national funds were basically stolen by their prime minister, Najib Razak, and other people, who transferred art into money by going to Luxembourgish and Swiss banks via the Cayman Islands:

The Wall Street Journal reported that the U.S. investment bank Goldman Sachs made an offer to the U.S. Department of Justice to pay a financial penalty of $2 billion for its involvement in Najib Razak’s offenses.

In other words, it’s more common for rich institutions such as banks and kleptocracies to use art for money-laundering than they don’t.

In his treatise Money Laundering through Art, the Brazilian judge, criminologist, and money-laundering expert Fausto Martin de Sanctis explains why transactions in art have come to play an increasingly important role in money laundering in the past few years: “Art is an attractive sector for the practice of money laundering because of the large monetary transactions involved, the general unfamiliarity and confidentiality surrounding the art world, and the unlawful illegal activity endemic to it (theft, robbery and forgery).”

There are ways of preventing all of this from happening.

The terrorist attacks in Paris in November 2015 and in Brussels in March 2016 and the question of how the responsible terrorist groups had financed themselves led to the European Union adopting a new directive on money laundering. The scandal surrounding the Panama Papers also propelled this development. The member governments throughout Europe were obliged to enact the directive into national law. When the German treasury published its “Draft Legislation to Enact the Change of Directive for Four Money Laundering Directives” in late summer 2019, the arguments put forth by art dealers resembled those they had used against the law for the protection of cultural goods. With the new directive, the former scope of the law on money laundering expanded to include additional professional groups, which were also required to establish risk management and fulfill duties of due diligence and identification and, in appropriate cases, report suspicious activity to the criminal authorities. Outside of the finance sector, this change from that point on applied to art dealers, who already felt themselves under the gun: “also art dealers and art storage businesses (these last only in duty-free zones) for transactions of €10,000 or more.” In the future, the planned security measures apply not just to cash deals but also to transactions by credit card, through payment systems like PayPal or through bank accounts. According to the legislature, today it is no longer quite so easy in a suspicious case to trace the flow of money because of the increasing digitalization of the payment business: “In particular the pseudonyms or anonymity employed in the trade of crypto currencies enables their misuse for criminal and terrorist purposes. Thus, the G20 spoke in favor of “regulating ‘virtual assets’ in order to fight money laundering and the financing of terror.”

However, there are so-called freeports, places where art is stored and sold tax-free:

In freeports in Switzerland, Luxembourg, and Singapore, works of art worth billions of dollars are warehoused not just for days or weeks but for years and even decades—for example, to artificially constrict the market for Picasso or Warhol, or to wait out the statute of limitations on legal action. And that’s not all: the art can be sold tax-free.

At the end of the book, Kolfehoff states ten simple questions that should be asked to prevent illegalities and morally bankrupt choices from being made. It really is quite simple, and involves honesty, transparency, and crime-prevention.

Kolfehoff’s book is a myriad of insanities committed, perpetrated, and furthered not only by the criminals behind all of these choices, but also by governments, inadequate and aged laws, and legal loopholes that are taken advantage of by legal eagles. It’s all a matter of stopping these things as often as is possible, to, ultimately, prevent people from suffering while a handful of people live extraordinarily wealthy lives.

This is a wild ride, and it’s worth taking. Of course, this book can be seen as an allegory of capitalism in its current and most popular state: a few people collect almost all of the benefits while the rest suffer. On the other hand, in the art market, the ones who suffer the most are not the workers nor part of the art-dealing chain, but populations of nations whose rulers betray them.