Could the artist also be prosecuted?
The artist can be sued for defamation and lose in court.
I am addressing this question because the currently accepted answer is wrong and would expose the OP (or the artist) to liability if he were to rely on it. Likewise, a meritorious plaintiff would end up with the false and misleading notion that he or she has no remedies in court for a such defamatory drawing.
Note to the general public and pro se litigants: We non-attorneys withstand so much prejudice, arrogance, attempts of intimidation, and ridicule from attorneys (admittedly with some exceptions) both in court and in online platforms. But here is a clear, verifiable instance where the non-attorney's self-education in law allows him to reach the right answer, opposite to a lawyer's conclusion (and please note I have no problem acknowledging that the author of that wrong answer is knowledgeable about the law in general).
First, under U.S. defamation law, publication also encompasses drawings. Courts do not "summarily dismiss" a defamation claim for the sole fact that the publication at issue is a drawing.
In Linebaugh v. Sheraton, 198 Mich.App. 335, 338, 340; 497 N.W.2d 585 (1993), the court determined that "[a] drawing that imputes a lack of chastity [...] is actionable per se, irrespective of special harm. MCL 600.2911(1)". There,
the male figure depicted in the drawing resembled Schaefer with sufficient detail to lead her to believe that it was Schaefer. Also,
the buttocks depicted in the cartoon are wearing Lee brand jeans, and
plaintiff testified that she customarily wore jeans to work.
Likewise, in Daniel v. Wayans, 8 Cal.App.5th 367, 398 (2017), the court did not stop its review for the publication being a drawing. The court went further and assessed whether the cartoon at issue was defamatory. The court answered in the negative, pointing out that the drawing "did not insinuate or imply that Daniel shared any personality characteristics [of Cleveland Brown cartoon character]" nor did it "suggest[] that Daniel is a real-life incarnation of the cartoon figure".
The reason why the dismissal in Daniel was affirmed was not that the publication was a drawing, but because "it was a combination of an expression of an opinion by Wayans that Daniel looked like Cleveland Brown and an accurate photographic comparison". As such, it was not a viable claim of defamation or false light (A "false light" cause of action is a variety of defamation and is subject to the same requirements. Aisenson v. American Broadcasting Co. (1990) 220 Cal.App.3d 146, 161 [269 Cal.Rptr. 379]).
If I want to hire an artist, and (s)he says, "Sorry, but I can't draw
what you want because I'll get sued," can I tell him "NO. No matter
what you draw, you cannot possibly be held liable if it's a work for
hire. If I pay you for all the rights, then the burden is entirely on
my shoulders"?
Even if putting artist's ethical considerations aside, the arrangement you outline is unlikely to suffice. Paying for the rights [to the publication, as I understand it,] will not necessarily supersede the legal fees, attorney fees, and judgment that the artist might have to pay if the plaintiff prevails. Defamation statutes in one or more jurisdictions include attorney fees in their definition of economic damages that may be recovered in a defamation lawsuit. See MCL 600.2911(7).
Even if you and the artist signed a clause whereby you commit to cover any and all court-related disbursements the artist would incur as defendant, your payment to the artist might not compensate for other losses (of business, of reputation, of consortium etc.) the artist might experience if (s)he accepts your request.