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Married to the Mob
But Japanese companies begin to file for divorce
By PETER McKILLOP
September 29, 1999
Web posted at 4 a.m. Hong Kong time, 4 p.m. EDT
Last week I had an opportunity to lunch with Norikazu Kohyama, a top anti-racketeering investigator for the National Police Agency, Japan's top law enforcement department. He was blunt about the need for Japanese corporations to end their long established relationships with sokaiya gangsters--that is, members of Japan's organized crime families. Each year, hundreds of Japanese corporations, including the bluest of the blue chips, spend millions to purchase the unseemly services of Japan's underworld. Japanese senior management in the past has used gangsters to do everything from intimidate troublesome shareholders into silence at annual meetings to spying on and blackmailing competitors.
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As long as Japan's corporate boardrooms remained isolated to outside pressure, their shady links with the Japanese mob served a useful purpose. However, as pressure builds on Japan to adopt a more open, transparent economy, the ties with the mob are no longer socially acceptable. That is why I was not surprised when Kohyama then urged me to see the hottest film now in Japan. Released two weeks ago, Jubaku: A Business Panic has grossed more than $10 million in two weekends, which by Japanese standards is a huge amount.
The film is a no-holds-barred attack on Japan's smarmy business culture. It's loosely based on the 1997 sokaiya scandals involving a major Japanese bank, Dai-Ichi Kangyo, once the world's largest. In the movie, four middle-manager Young Turks break ranks with their conformist colleagues and demand an end to an elaborate cover-up that was being plotted by the bank's elderly executive. When the Young Turks confront one and demand that he resign, the angry banker shouts, "Then you will have to arrest every banker in Japan!"
And that is the problem Japan faces and the reason why these anachronistic practices are proving difficult to shake. The corruption highlighted in Jubaku was the norm in Japan until just recently. Some would say it still is. Dealing with the mob was part of the job description for almost every ambitious executive fighting his way up the corporate ladder. These practices continue, though efforts have been made to be more subtle. According to a recent survey in Japan's leading business newspaper, Nihon Keizai, 50% of the companies polled said they are still approached by mobsters.
Kohyama is aware of the difficulties, but like the Young Turks in the movie, he is young and clean enough to take on the establishment to try to end this illegal practice. A new generation of police investigators is bluntly warning corporations that they will be subject to investigation and prosecution if they continue to have ties to the mob. "We must cut off these parasites. It should be common sense for companies to resort to law, not mobsters," Kohyama says.
The fact that the film Jubaku was even allowed to be made is a sign of progress, according to director Masato Harada who spoke at a special screening of the film this week. He suspects that the major studio that produced the film still has a relationship with the sokaiya gangsters. Perhaps that is the reason why, when his doorbell went off at 2 in the morning this past weekend, he greeted the caller with a baseball bat in hand. It turned out to be a drunk neighbor. "There is a lot of mess still to be cleaned up," Harada says. A little paranoia never hurts.
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