Crime Doesn't Pay (As Much) in Japan

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suya Shiroo woke up that morning and got himself a gun. The same evening, Shiroo — a local gangster, or yakuza, with ties to Yamaguchi-gumi, Japan's largest criminal syndicate — shot and fatally wounded Iccho Ito, the mayor of Nagasaki. While the shooting first appeared to be a hit, reports soon suggested that Shiroo was motivated by petty personal grievances: He reportedly blamed a minor car accident on city construction work, and wanted $17,000 in damages from the Nagasaki government. There was something almost absurd in the spectacle of an aging gangster murdering a high-profile politician over a point of pride and a virtual pittance, like some Japanese version of Paulie Walnuts in the Sopranos.

Japan's top yakuzasyndicates appeared to think so, too, because they quickly distanced themselves from Shiroo, putting out word that he had acted alone. Still, some yakuza experts are skeptical. The Japanese media reported that Shiroo had tried and failed to help a yakuza-linked company win government construction contracts. Nagasaki had excluded the company as part of a nationwide push to reduce yakuza influence in the construction sector, and Ito's murder may have been intended to intimidate local officials. Whatever his motivation, Shiroo's brazen act highlights the crisis facing the yakuza as such traditional revenue sources as construction and extortion dry up thanks to vastly reduced public spending, greater transparency in business, and growing regional income disparity.

"The Nagasaki shooting is a harbinger of what's to come," says Mitsuhiro Suganuma, a former high-ranking agent with Japan's Public Security Intelligence Agency. "Their activities will become a lot more violent, and a lot more dangerous."

Construction has been the lifeblood of the yakuza — the word gumi from Yamaguchi-gumi is also used as a synonym for construction companies, reflecting the fact that as Japan built itself up in the postwar era, so did the mafia. In the bubble economy of the 1980s, the yakuza feasted on the lucrative real estate sector. When the bubble finally popped and the government tried to spend the country back to fiscal health through massive public works projects, the gangs siphoned off those funds as well, often by bribing politicians to secure contracts for mob-linked construction companies.

But in recent years, Tokyo has both trimmed public spending and cracked down on bid-rigging for construction projects. Now, "the construction industry is tight even for legitimate companies," says Takashi Kadokura, a researcher who specializes in the underground economy. "There's less money, and the pie is getting smaller — especially outside of major urban areas, where the yakuza still largely depend on traditional businesses."

The economic squeeze has created an underworld version of the growing income disparity in Japan's legitimate economy. While the top echelons of major organizations like Yamaguchi-gumi gain from the booming economies in Tokyo or Osaka and use that income to diversify into quasi-legitimate business, smaller gangs in sluggish regional cities such as Nagasaki are struggling. And, just as it might in the corporate world, that's led to yakuza consolidation — Yamaguchi controls roughly half the 80,000 or so gangsters in Japan through a network of hundreds of affiliates. But small gangs such as Shiroo's are growing increasingly desperate, which leads to violent extortion on the local level, often largely unnoticed. "There are a lot more hidden tragedies involving yakuza-related organizations and bid-rigging that never come out in the press," says Suganuma.

The top syndicates have wide-ranging interests to protect, and therefore have no desire to see local violence get out of hand — they're under enough pressure from the police as it is. The yakuza once operated in broad daylight, with a level of public influence in business and government that was simply unimaginable for the Mafia in the U.S. But increased police powers and growing transparency in the opaque Japanese corporate sector have considerably reduced the reach of the yakuza. To lower their profile, more than half of yakuza are now classified as "associates," up from 33% in 1991. There's little actual difference between associate and official members, but some experts wonder if the new realities are loosening the notoriously tight bonds of obedience within yakuza gangs.

"If the lower-level yakuza aren't getting any money or any work, they won't listen as well to their bosses," says Benjamin Fulford, a journalist who writes on the gangs.

They may exist in the shadows, but the yakuza are a mirror of the changes in Japanese society: a weakening bond of loyalty between corporate employer and employee, the growing economic power of Tokyo at the expense of the outlying regions. But just as the salaryman is far from an endangered species, the gangs aren't going anywhere.

"The yakuza profession is a service business," says Yukio Yamanouchi, an Osaka-based lawyer who represents Yamaguchi-gumi. "They provide the services that Japanese society requires." And they'll continue to exist as long as there's a market for the services they provide.

— With reporting by Toko Sekiguchi/Tokyo