Authors: Robert Whiting
‘
Suimasen
/I’m sorry,’ he said, in a guttural, barely audible voice. Then he crawled back to Tanaka, bowed his head again, and waited.
‘Get out of here,’ Tanaka commanded.
The man crawled backward across the room to the door, reached behind him, and turned the doorknob. Then he backed himself out. From his seat at the mah-jongg table, Roa could see the man pull the door shut, still on his knees in the hallway.
‘Count the money,’ Tanaka said.
Roa opened the envelope to find six crisp new 10,000-yen bills.
‘That was the manager of the Cupid,’ said Tanaka, answering Roa’s unspoken question. ‘We own it.’
Roa was stupefied. He had never seen such a vivid exercise in raw power.
‘Now I know where I am,’ he thought to himself.
It also dawned on Roa that the TSK had made an unnecessary concession. Not wanting to become any more obligated than he already was, Roa treated Tanaka to a night on the town, blowing the entire 60,000 yen and more.
Tanaka never mentioned the incident again, and when the Nasu project manual was finished, Roa respectfully declined the offer of a permanent job with the TSK.CCC. He figured he was better off that way. And he was right. The company was about to implode in the biggest scandal ever in the history of US–Japan relations.
The director general of the TSK.CCC, Yoshio Kodama, was an elusive figure who kept a low public profile and did not eat a lot of pizza. He was involved in a number of shady lucrative deals with Machii – real estate and land development projects like the one in Nasu where mob muscle was needed to persuade recalcitrant farmers to sell their land, as well as assorted ventures on the Korean peninsula – casinos, hotels, cabarets – where his gangland associate was well connected. (Police noted a substantial increase in the use of metamphetamines when the Kampu Ferry, owned by the TSK group, began operations. The ROK was manufacturing about 70 percent of the
shabu
, as it was called, that was sold in Japan and consumed by an estimated million consumers – mostly overworked students, cab drivers, salary-men, and bored housewives.)
What only a handful of people knew, however, was that Kodama had once again become a secret sales agent for Lockheed. The aircraft maker was in trouble. It had lost a key sales race in 1968 when the Japan Self-Defense Force opted for the new McDonnell-Douglas F-4 Phantom and was facing a further decline in sales of military aircraft with the coming end of the Vietnam War. Lockheed needed the burgeoning civilian market in Asia to survive, and to get it the company needed Japan. With Japan Air Lines and All Nippon Airways preparing to buy a new generation of wider-bodied planes, Lockheed launched a massive three-year sales effort on behalf of its new Tri-Star passenger jet, signing up Kodama’s public relations firm, Japan Public Relations, to a consultancy contract … and thus tapping once more into the underground government.
Kodama started off by lobbying his old friend, Kenji Osano, the tycoon extraordinaire who happened to be the largest individual shareholder in JAL
and
ANA and who was also said to be the single most influential decision maker in the selection of civilian aircraft in Japan. Osano was a big, bald-headed man described by one journalist as a ‘restless gorilla’ who, like so many of his peers, had
risen from shady Occupation beginnings (Osano’s forte had been black market gasoline). He was also partners with Kodama and Machii in several ROK business ventures and was not averse to under-the-table payments and other forms of arm twisting. He set about engineering a scandal which would result in the ouster of a certain ANA executive who was steadfastly opposed to buying the Tri-Star.
Lockheed president Carl Kotchian made several trips to Tokyo to concentrate on the sale, staying at a luxurious suite in the Okura where, as one reporter wryly noted, his total bill must have exceeded the cost of one Tri-Star. He met secretly with Kodama several times at out-of-the-way spots – in parked cars and in darkened office building stairwells – to receive progress reports. At the same time, as added insurance, he plotted with top executives of Lockheed’s Japan representative, the Marubeni Corporation trading house, who had its own direct route to the office of the prime minister, then occupied by newly elected Kakuei Tanaka. Tanaka, an earthy, horse trader’s son who had just replaced Eisaku Sato in the top spot, would take the art of political corruption and king-making, already highly refined in Japan, to a new level.
Back in the United States, Lockheed representatives went a step further and lobbied the White House for help. In September 1972, US President Richard Nixon and Tanaka met in Hawaii. Nixon suggested Tanaka could help reduce the burgeoning US–Japan trade deficit, then about $1.3 billion, by buying US aircraft. Tanaka responded by pledging Japan to buy $320 million worth of large civilian aircraft from the United States.
According to some Japanese reports, Nixon then suggested the Japanese chief of state might also use his influence to get ANA to buy the Tri-Star, which Tanaka was in a position to do since Osano, the ANA’s leading shareholder, was a close friend as well as his biggest campaign contributor. The reports of the Nixon request were unconfirmed but not difficult for journalists to believe since Nixon came from California, where Lockheed was
based, and employed 60,000 people. In fact, he had already rescued Lockheed from bankruptcy a year earlier by pushing a $250 million loan guarantee through Congress.
Whatever the truth, in the fall of 1972, ANA, in a move that shocked everyone, suddenly dropped previously announced plans to replace the airline’s aging Boeing 727s with new McDonnell-Douglas DC-10s and formally decided to purchase a fleet of Lockheed Tri-Star 1011s instead. This was all the more surprising given the fact that the airline company had already made down payments on three DC-10s.
Evidence later came to light that Lockheed had employed middlemen to pay some $12.5 million, much of it in bribes, to various Japanese government officials and political leaders in order to ensure the sale of $700 million worth of aircraft in Japan. The money was funneled through Kodama and the trading house executives, who earned several million dollars in commissions and service fees. Some of the more questionable disbursements were delivered in secret nighttime transfers of wooden orange crates and suitcases full of cash, conducted in underground garage lots, deserted side streets, and even the parking lot of the Hotel Okura, directly across the street from the residence of the US ambassador. Half a billion yen worth of loot went directly to Tanaka, while other emoluments went to the secretary-general of the LDP, officials in MITI and the Ministry of Transportation, ANA executives, and Osano himself.
As we have seen, such payoffs were almost standard operating procedure in Japan. Most of the nation’s postwar prime ministers, in fact, despite their ceaseless talk of trust, integrity and the democratic process, had had run-ins with the law over corruption. Both Tanaka and Osano had done time in their younger days for bribery and embezzlement, respectively, and Tanaka himself had once said, ‘You can’t be called a man if you are afraid of going to jail once or twice.’
Tanaka, it was widely acknowledged, had essentially bought the
premiership by purchasing the support of the large Nakasone faction of the LDP in the 1972 LDP presidential election. (In practice, the president of the majority party becomes prime minister.) It was the most expensive intraparty election in history, and while Tanaka had extracted hefty donations from numerous wealthy industrialists in return for big development contracts, Osano’s money was the single biggest reason Tanaka was able to win. Witnesses saw Tanaka make an unscheduled visit to Osano’s private office near Tokyo Station on the day he was elected, and there, in an act unprecedented for a man of his position, he bowed deeply in gratitude. Later he awarded his benefactor a key spot on the management committee of Nippon Telephone and Telegraph, Japan’s national telephone monopoly. Other supporters got pork in the form of big development contracts, vast land reclamation projects, and construction projects for new railways, bridges and highways whose main utility, in some cases, was confined strictly to the area of political infrastructure.
The fact of the matter was that the cost of engaging in politics in postwar Japan had become progressively more prohibitive with the rapidly increasing population. Although TV advertising was limited and door-to-door canvassing restricted, the amount of cash a politician was required by tradition to dispense regularly in the form of wedding gifts and funeral solatiums for people in his ever-expanding constituency was now, by itself, enough to bankrupt most wealthy men. Also increasing was the amount of funds the several hundred members of Parliament were expected to contribute to the campaigns of politicians in their local districts, including the prefectural assemblymen, mayors, village and neighborhood heads, constituency support group leaders, and others on the food chain – in addition, of course, to paying for their own elections. So entrenched had this trickle-down system become that many elected officials at the lower levels actually borrowed money in advance of the expected political donations.
Some students of Japan viewed this all as a natural outgrowth of
the nation’s long feudal history, where what mattered most was personal allegiance on the home front rather than ethical principle, the strict letter of campaign donation law, or one’s duty to society at large. Others cited the gerrymandered electoral scheme, both pre- and postwar versions, where rural areas had several times the voting power of the large cities, in a multimember system of small constituencies that made it easy to dispense patronage and rely on personal appeal. Others even blamed American influence for coarsening the system by greatly increasing the number of local elective positions and opening up politics to any ambitious scoundrel who wanted to run for office. Whatever the reasons, politics had become first and foremost a sort of money game rather than a form of national service. It naturally followed that those with the most skill in raising money rose to the top. Hence the birth of the term ‘money politics’ to describe the system.
Tanaka himself broke new ground when he got major banks, automakers, steel producers and construction companies to sponsor select conservative politicians and ‘sell’ them to the voters. In one instance, the Mitsubishi Group rallied to raise funds and votes among its several hundred thousand employees to support one LDP candidate. Although Tanaka was forced to resign as prime minister in 1974 after a magazine article ran a lengthy exposé of his shady financial dealings, revealing that he had bought stock worth $425 million in 1973, even though his declared income had been only $260,000, he blithely continued to wield power behind the scenes because of an overflowing war chest.
Finding himself in such an environment, it was not difficult to understand why Kotchian, the man most responsible for authorizing Lockheed’s payoffs, had naturally come to consider bribery as a Japanese business cost – sort of like fire or life insurance – necessary if one wanted to succeed. Japan was run by a small, close-knit group of people in business and government, he said in Senate testimony, and if you wanted to enter that group, you needed help. He was also quoted as saying that he kept the CIA
informed of his movements and that ‘if they wanted to, they could have stopped it’. Agency spokesmen naturally denied any knowledge of involvement.
Lockheed’s extracurricular activities in Japan remained secret until February 1976, when a US Senate investigation committee chaired by Senator Frank Church exploring bribery by US firms overseas compelled Kotchian and two other Lockheed senior executives to give detailed testimony about their firm’s lobbying activities in Japan and reveal the role Kodama had played.
The bombshell revelations that
Americans
were casually bribing leading figures in Japan’s government and industry stunned the Japanese in much the same way as the Watergate scandal had shocked US citizens a couple of years earlier. Although certainly not unaccustomed to corruption in their system, the authorities in Japan were humiliated that a foreign country – and not just any foreign country but Japan’s closest ally – had been the one to uncover such massive wrongdoing. A widespread investigation was triggered, and in late July Tokyo prosecutors ordered the arrest of Kakuei Tanaka on charges of accepting the 500 million-yen bribe, then about $1,666,666 at the prevailing exchange rate. (Released on bail in mid-August, an indignant Tanaka was quoted as saying, ‘How dare they arrest me over such a trifling sum?’) Many others, including Kenji Osano, Marubeni trading house executives, and government bureaucrats, were also arrested and indicted on various charges, which, in addition to bribery, included perjury and violation of foreign exchange laws. The strict legal requirement in Japan that for a bribe to be proven, monies paid had to be specifically reciprocated by a favor and
clearly
understood by both parties as a bribe, not a gift (as compared to America where the mere act of a payment to an official is considered bribery), made it necessary for the prosecutors to go after the lesser offenses.
Kodama was indicted for the more easily proven charge of tax evasion. Prosecutors conducted an intensive search for hidden assets and found accounts in twenty-three different banks, along
with five different safety deposit boxes containing diamonds, emeralds, sapphires and other gems, and a safe containing a pile of stock certificates a foot high. The procurator’s office impounded all his assets, including substantial real estate holdings, and determined he owed $13 million in back taxes.
Police raided the ornate new offices of the TSK.CCC in search of evidence related to the case, and although none was found the fallout was considerable. The names ‘Kodama’ and ‘Machii’ were frequently linked in the media coverage of Lockheed, which, by midyear, had escalated into dramatic nationally televised hearings in the Diet. Since no one of any standing wanted to be seen as being remotely connected with the affair, the regular TSK.CCC crowd vanished almost overnight.