News & opinion on Greater China and the even Greater Beyond: by Biff Cappuccino.

Wednesday, April 27, 2005

This is the last installment on the yakuza. Putting up these quotes isn’t efficient use of my time. I’m going devote myself to cramming in some more reading instead and follow up with proper essays, instead of this rag-tag stuff.

From: Yakuza - Japan's Criminal Underworld by David Kaplan (2003)

Yakuza perform various tasks that are left to lawyers or agents of the court in other societies, particularly when dispute resolution is involved. It is not well known in the West, for example, that is much as one quarter of all bankruptcies in Japan are routinely handled by yakuza gangs.... most Japanese do their best to avoid contact with the gangs, but often there are no alternatives. This, say legal scholars, is due largely to glaring holes in Japanese law and its enforcement, and most of all, to the stays delivered on the number of attorneys. Japanese are famous for their lack of lawyers and supposed reluctance to litigate. Lawyers number about one per 8500 people in Japan, compared to about one per 900 in Britain and one per 400 in America. Civil suits per capita are fewer than 1/10th of those in the Western common-law countries. But this may be due less to long-standing cultural values and more institutional barriers - lack of legal support, high filing fees for civil suits, and poor enforcement of judgments.

Perhaps the most remarkable aspect of the yakuza’s public role is its function as a kind of alternative police force. Says criminologist Eric von Hurst, a fifteen year resident of Japan, "the one thing that terrifies Japanese police is unorganized crime. That's why there's so little street crime here. Gangsters control the turf, and they provide the security. (Sounds like New York in the 1950’s) If some hoods come around the neighborhood and start making trouble, chances are the yakuza will reach them first. Japanese police prefer the existence of organized crime to its absence." (Just as most pickpockets in the old US and in modern China pay off the cops) Among those who agree is former mob attorney Yukio Yamanouchi, who served for years as the Yamaguchi-gumi's counsel. "Japanese public security is very high," he told a reporter. "The crimes to be tolerated are a basic choice of the Japanese people."

Sakaiya Extortionists (page 159): why are these extortionists paid off? Largely to leave the companies alone, to stop disrupting the staid world of Japanese business. Traditional sokaiya gangs operate by buying shares of company stock, digging up scandalous information, and then demanding hush money. They ferret out embarrassing facts about the company's performance and top management: bookkeeping irregularities and payoffs, product liability claims and plant safety problems, officials who cheat on their income tax or keep mistresses. If the corporation refuses to pay up, at its next general meeting the sokaiya will appear armed with these unpleasant revelations and loudly berate the company management.

The practitioners of the sokaiya’s varied exploits fall into several classes. Those who run sophisticated organizations - working at times closely with company management - receive salaries comparable to the best paid corporate executives. They are chauffeured around town in limousines and maintain powerful particle connections. Most sokaiya, though, are petty thugs hoping for an easy payoff. The members come from varied walks of life: taxi drivers, tradesmen. Some are former student radicals who see little wrong preying on Japanese corporations. There are even the reputed "bartender sokaiya," former barman who switched to extortion after listening to conversations between top executives over drinks. Also in the lower ranks of the business is the so-called bonsai sokaiya, who walks around company offices shouting the exclamation "banzai!" When questioned he states that he has just become a shareholder and is merely expressing his joy and a desire to encourage greater worker productivity. Several thousand yen is usually enough to convince them that his joy is better expressed elsewhere.

So lucrative is the field that some corporate officials who once dealt regularly with the sokaiya have switched roles and turn up as sokaiya at company meetings... "The stockholders meeting is a solemn function," one sokaiya told the newspaper Yomiuri. "We help it proceed smoothly and protect the interests of the innocent shareholders. We are the prop men of modern capitalism."

As with there yakuza brethren, the openness of the sokaiya can sometimes be jarring. One Japanese publisher even sends out questioners to the extortionists and puts out an annual directory based on the results. While it's hard to imagine a New York publisher asking local mobsters which restaurants and contractors they extort, the sokaiya eagerly respond. The 1997 edition of the guide lists 650 sokaiya, complete with addresses, phone numbers, targeted firms, affiliated yakuza gangs, and helpful hints on their tactics. Retailing for some $250, the guide is purchased by corporate officials, investigators, and the sokaiya themselves. Among the characters profiled: Tatsuki Masaki, head of a Tokyo "debating club" who posts the latest corporate scandals on his web site; Makoto Kanehira, a rightist and from the Comrades of the Great Japanese Kamikaze; and Ichiro Yamate, described as a six-foot tall delivery van driver from Hiroshima with a "booming voice." There are even a few foreigners listed, who are reportedly sent to annual meetings to demand answers from embarrassed executives in English.

That both law enforcement and corporate officials allow such a corrupting criminal industry to flourish is difficult to fathom, particularly for Westerners. One reason... is the Japanese fondness for avoiding confrontation.... Still, the glaring success of an entire industry of corporate extortionists is due to more than simply a Japanese love of harmony. Western scholars who have studied the sokaiya believed these racketeers depend on a dismal pattern of poor disclosure by Japanese companies, lack of oversight by government officials, and a general lack of accountability.... the scores of prosecutions involving sokaiya payoffs between 1982 and 1999, only five sokaiya were sentenced to prison - and not a single executive.

I’ll leave it at this. In other words, the main problem is law and order, enforcement and ethics. Sounds primitive, feudal, retro-economics? Fascinating that a nation can operate in this manner.

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