To cite one notorious example, as reported in 1966 by the Shukan Gendai, a Copa showgirl known as ‘Dewi’ (whose real name was Naoko Nemoto), was hired by the Japanese Tonichi Trading Company, under the baton of Yoshio Kodama, which had developed several interests in Indonesia, to serve as a ‘secretary’ for Sukarno. She did her job so well, she became the president’s fourth wife and mother of Sukarno’s youngest child. Tonichi coincidentally or otherwise continued to reap financial benefits in Jakarta until Sukarno’s ouster from power in the middle of the decade.
It was, however, the budding military and commercial aircraft manufacturing industry that generated most of the action. The Copa was where the big trading houses took the unsuspecting executives from Grumman, Lockheed, McDonnell-Douglas and Northrop, the major players in the aircraft sales business, where billions of dollars in contracts were up for grabs. And, as it turned out, the agents for the Japanese trading houses, the middlemen in the aircraft buying business, were paying the hostess girlfriends of the American aircraft executives to listen in on any business talk that took place in their presence. The agents had recruited and trained them to ferret out anything that would help in negotiations and the effort to obtain contracts. What they valued, in particular, was information that involved fuel consumption and maintenance or that involved rival government ministries and defense agency personnel (e.g., ‘Was it true that the Grumman airplane was having problems with its SFC [specific fuel consumption]?’ ‘Was the finance minister in favor of x or y?’ ‘What was MITI’s unofficial position?’ ‘Had Colonel So-and-So at the JASDF approved a certain plan or supported a certain strategy?’). Some of the girls, in fact, had developed considerable knowledge about aircraft and had grown into fairly skilled industrial spies. The Americans, not surprisingly, had little idea what was going on – at least not until a magazine article about the Copa entitled ‘The Nighttime Stage for the Aircraft Wars’ appeared on the stands in the mid-1970s.
The intelligence gathered was valuable in determining strategy and decision making in regard to contracts. But there were other deciding factors, too. Like bribery. Which was the case during heated competition between Lockheed and Grumman Aircraft Corporation in 1959 to sell planes to the Japan Defense Agency, which had just begun to negotiate the purchase of jet fighters. The Defense Agency had initially decided to buy the Grumman F-11 (F-11F1F), then suddenly and mysteriously reversed its decision and chose the Lockheed F-104 Starfighter instead. Said Jim Phillips, an ex-fighter pilot who joined Grumman in 1958, ‘It didn’t make any sense. Grumman’s craft was stable and Lockheed’s was marginal in terms of safety. I thought I was a smart man but I didn’t find out what was going on until much later.’
What was going on was a lot. It was later documented that a secret donation in the neighborhood of $1.5 million had been made by Lockheed representatives to certain members of the Japanese government; the contribution had been engineered by – who else? – Yoshio Kodama, who received a fee of $750,000 from Lockheed for his efforts. The payments, it was reported by the New York Times, were made with the knowledge of the CIA, which kept that information secret from Grumman and the rest of the aircraft industry. (Lockheed was the firm that had built the U-2 reconnaissance plane for the Agency, and Yoshio Kodama, lest we forget, was an employee of the CIA at the time.)
A subsequent Diet inquiry into the affair had gone nowhere, thanks to Kodama’s considerable powers of persuasion. After the Socialist in charge of the probe refused to accept a briefcase full of Patek Phillipe watches and, after that, refused to be intimidated by a sword-wielding Kodama associate, Kodama resorted to blackmail. He produced an embarrassing series of photos of the Socialist in secret trysts with his mistress, and that proved to be enough to do the trick. Kodama did his job so well Lockheed would turn to him again some years later – this time with somewhat different results.
If the business world was expanding its horizons in the new post-Olympic era, so was organized crime. An Olympic year crackdown weeded out the more youthful offenders, cutting the number of badge-carrying yakuza in half, but its primary accomplishment was to further strengthen the ties between the authorities and the underworld, already close, thanks to the ‘I Like Ike’ army. Many gangsters had volunteered to help police clean up Tokyo and reduce crime during the Games so as to protect Japan’s image before the foreign visitors. Ginza Machii, for example, had ordered all his followers who had no regular jobs and whose appearance was ‘not pleasant’ to leave Tokyo during the two months around the Olympic Games and go to the seashore to undergo bodily and spiritual training. The result was that during the Olympics it was almost impossible to find anyone who looked like a yakuza in Tokyo, offering yet another lesson in gang psychology, Japanese style. Afterward, the gangs that remained consolidated their strength and increased their participation in the operation of legal businesses like taxi fleets, trucking companies, construction firms, and entertainment agencies, using front companies to disguise their ownership. (90 percent of all the booking agents in Japan were run by underworld gangs; in fact, Japan’s number one earning singer throughout the decade called the boss of the Kobe-based Yamaguchi-gumi ‘Uncle’. Many of the Akasaka-Roppongi – area deluxe hostess clubs were backed by mob money, among them, according to more than one report, the Copacabana.)
Tosei-kai boss Machii had reorganized his men into a ‘credit union’ formally known as the Toa Yuai Jigyo Kumiai (or East Asia Friendship Enterprises Association). And had further established a corporation that now owned nineteen clubs in the Ginza, including the Silk Road, where the cost of one drink in the company of a hostess was equivalent to a month’s salary for ordinary Japanese men. He had also gone into the restaurant business at Zappetti’s urging, despite his protestations that he didn’t even know how to boil water. (‘You got 1,500 little yakuzas running around the Ginza that can bring you customers,’ the Nicola’s boss had said. ‘Who’s going to say no to a gangster?’) The result was a small smoke-filled greasy chopstick Korean yakiniku-ya that was always full and, in a few short years, transmogrified to two haute cuisine Korean restaurants where the ingredients were imported directly from Seoul. Then, in 1966, in partnership with Kodama, Machii opened a restaurant in Roppongi called the Caravansary that had to be seen to be believed. It featured a Persian façade with Moorish furnishings and massive Arabic tents suspended over floors of polished Italian marble and had more than a million dollars of old Persian jewelry, tapestry and artifacts hanging on the walls. Tuxedoed Korean gangsters greeted the guests, and fez-capped Caucasian waitresses dressed in black tights did the serving. The menu offered French food prepared by a Japanese chef with six years’ experience in Germany (which as far as most Japanese of that era were concerned was close enough to France to count). Entertainment was provided by a belly dancer from Cairo and a Japanese quartet singing Spanish songs. If nothing else, it gave new meaning to the term ‘international dining’.
In a press interview, Kodama, the director general of the operation, announced grandly that the purpose of the restaurant was to ‘impress foreigners’ and erase the postwar image of Japan as a country of prostitutes and bar hostesses.
‘Foreigners believe that Japan is a paradise in which to obtain women,’ he said. ‘This I cannot tolerate. I wanted to help create this, the number one restaurant in the world, in order to show Japanese superiority to foreigners.’
As Kodama gave this speech, he was proving Japanese superiority in another field as well, the recondite world of corporate extortion. He was in the process of bringing under his wing the city’s 2,000 sokaiya. A concept invented in Japan, a sokaiya was a racketeer who specialized in corporate ‘security’. The idea was to obtain enough stock to give him the right to question company officials at general shareholders meetings (sokai means ‘general meeting’) and, for a price, agree not to. The sokaiya and his organization would bully malcontent stockholders, suppress unscripted comment, and otherwise control procedures to assure a brief, eventless meetin
g on behalf of management; or conversely, they might even stand up and question the performance of the board, depending on who was footing the bill. There were an estimated 5,000 sokaiya throughout Japan, and they also published scores of so-called black magazines, to which they persuaded reluctant corporate executives to subscribe – by fair means or foul (those who declined to purchase a subscription ran the danger of finding themselves the subject of a negative feature in the publication they had declined to buy). Another field Kodama was involved in was ‘solving’ internal business disputes or resolving intra-boardroom power struggles by the use of unfriendly persuasion for a ‘mediation fee’. He was being paid some 20 million yen a year as an ‘adviser’s fee’ from the giant brokerage house Nomura Securities, one of the many companies who paid him for his services and whose representatives claimed the investment was well worth the expense.
In the year after the underworld’s Olympic hiatus, the National Tax Office estimated that the total annual income from mob activities was more than the annual Tokyo metropolitan government budget of roughly 2 trillion yen (1.5–2 percent of the GNP) – only one-fifth of which was from legitimate enterprises. But no one was exactly sure just how much that was. ‘The tax bureau asks us to provide a figure,’ said one police representative, ‘and we do. But we’re really only guessing. The reality might be much higher.’ Indeed, some organized crime experts in Japan believed the total yakuza take to be about seven times higher. (For the sake of comparison, it is generally estimated that the Mafia accounts for some 2.5 percent of the US GNP.)
The final figure, whatever it was, added up to tremendous economic clout.
KING OF ROPPONGI: MAFIA BOSS OF TOKYO
In this atmosphere of wealth and duplicity, the American Zappetti was right at home. By all accounts the richest foreigner in all of Tokyo, having long since supplanted Attorney Blakemore (when one included unreported income), he had opened his new restaurant in October 1964, and soon after he purchased a palatial new three-story, four-bedroom, Western-style concrete house in the same high-rent neighborhood. It came complete with sunken fireplace, grand piano, swimming pool, maid, and butler and encompassed over 10,000 square feet, not counting the driveway, which itself could accommodate up to twenty automobiles. In a city as starved for elbow room as Tokyo, that was saying something. It took seven complete lounge sets and a small fortune in expensive paintings and art objects to furnish all the other individual rooms. In short order, he also acquired a second smaller house in Roppongi as a ‘backup’, a summer house in the historic templed suburban town of Kamakura, a seaside vacation home in nearby Zaimoku, a beachfront residence in Honolulu, a state-of-the-art yacht, and a fleet of cars that he replenished every year with the newest model Cadillac, imported at twice its Stateside list price because of import taxes and shipping charges. Not even the US ambassador lived as well as he did.
Zappetti had gained his riches, he didn’t mind boasting, through a combination of business skills and criminal cunning. An example of the latter came when officials from the Tokyo metropolitan government approached him about buying the land on which his first restaurant was situated in order to widen the street. They had offered to fully compensate him for all business losses he would suffer in the process of changing locations, so in the spirit of a born hustler, he hired nightclub hostesses from the area to come in and occupy all empty tables during the slack daytime hours to create the impression that his restaurant was always full. They sat there for several days in a row, doing their nails, waiting for the inspector from the highway commission to make his appearance. When he finally materialized, he was so impressed, he recommended a reimbursement of 97 million yen – more than twice what Zappetti had originally paid for the land and the building.
It may have been unethical and illegal, but, Zappetti argued, it was no worse than some of the other things that were going on around him – like the delegation of Tokyo snack bar operators who had come demanding he raise his prices. They complained that what Nicola’s was charging for a small pizza was about half of what they were getting for something they called ‘pizza toast’, which consisted of a slice of bread topped with tomato and locally made processed cheese, cooked in an oven – and was hurting their business (causing ‘confusion’ was the term they had used, one that would be heard in the years to come whenever the Japanese government was asked to further open its markets). They wanted him to adopt their standard of ten times cost for something that was essentially a grilled cheese sandwich, which, of course, amounted to price fixing, collusion, and possibly attempted extortion. But he refused. He had his contacts on the military bases who provided him his supplies from North America so cheaply (if illegally) that he could afford to charge reasonable prices.
Buying on the black market was, for him, more of a necessity than a luxury because the prices of imported products on the open market were prohibitively high. A can of tomato sauce bought in Japan cost five times what it did in the United States. So did a cut of pork and a kilo of cheese. He had tried, on occasion, to import those items directly from abroad, in bulk, but there had always been some esoteric rule or law blocking him from getting the required permission. Once, for example, he had actually been told by a government official that the sauce tomatoes he wanted to import were not allowed in Japan because they had been grown in the sunshine, in violation of government regulations that permitted only hothouse tomatoes in that category of import. The economy was clearly rigged to protect those few domestic producers who had the market locked up from foreign competition that might otherwise come in and blow them away, because of the inferior quality of the homegrown product – the Japanese had only been making cheese since the nineteenth century and could not yet meet standards set by the Europeans. The needs of the consumer – the hard-working salaryman, the cash-strapped housewife – who had to pay through the nose, did not seem to matter. The consumer, after all, unlike the producer, was not a heavy political contributor.
He had also tried parallel importing – a system whereby one could claim shipments as unaccompanied baggage upon arrival in Japan. To get around the high cost of foreign whiskey – a fifth of imported Scotch cost a small fortune – he and a partner had imported 800 cases of liquor through the process, flying back and forth and signing the declaration sheets each time. It was considerably cheaper than going to the liquor store. But then someone in the Japanese government complained and the North American supplier was ordered by Schenley, the company that controlled most of the liquor sold in the United States, not to sell in bulk to unauthorized agents anymore – meaning people like Zappetti and his partner – and that was the end of that. Thus did he return to the black market.
In time, he tried to produce his own materials, with varying degrees of success. He leased a huge plot of farmland in Hokkaido, that big, open, northernmost island, and started a dairy farm in order to make his own cheese, confident he could do a better job than any domestic producer. He purchased a herd of pedigreed cows and struck a deal with six local farmers to tend his farm while he was in Tokyo, the idea being they would clear the land, feed and milk the cows, and then make the cheese, which he would use in Nicola’s pizza.
Zappetti had constructed an authentic American-style ranch house with five bedrooms and a new state-of-the-art barn and purchased an array of modern equipment, which included five ten-ton Komatsu bulldozers, a tractor, a pickup, a jeep, a snowmobile and assorted other trucks. He even sent his farmers to bulldozer school.
Nobody had bothered to tell him that there was clay under the topsoil, which meant that it would be impossible to grow anything for the cows to eat, and that consequently Zappetti would have to buy all his feed. Or that sinkholes would appear as the hired hands began clearing the land – one of them swallowing up an entire bulldozer. And when his crew of farmers finally got around to making the cheese, it was all but inedible, which may or may not have had something to do with the fact that Zappetti’s cows were beginning to keel over and die. A veterinar
ian from the local Farmers Association identified the malady by pointing to the word ‘neglect’ in his Sanseido Japanese-English dictionary, hinting that the local farmers spent more time in the master’s whiskey cabinet than they did tending to his livestock.
In the end, Zappetti was forced to shut down that operation. But a sausage factory he put up outside the city in the town of Atsugi proved less disastrous, and with the economy in overdrive, he continued to prosper. To keep up with demand, he added 3,500 square feet at his main restaurant, then 3,500 more, then put in a parking lot and a mini-sausage factory on the roof of the building in violation of a city ordinance. He hired new chefs, expanded his staff, opened more branches around the city, and built a frozen pizza plant in Yokota, with a fleet of four-ton trucks to deliver the wares.
Money was coming in faster than he could think of ways to dispose of it. He spent as much of every evening as he possibly could in the fleshpots of Akasaka and Roppongi. He boasted that he never went to sleep without a beautiful girl in his arms, sometimes two. The nightclub bartenders grew so accustomed to the concupiscent gaijin tycoon and his conquests that they would automatically point out the newest hostesses whenever he walked through the door.
‘They called me the King of Roppongi,’ he would boast years later. ‘And that’s what I was. I was the richest American in the country. I always had a knockout doll on my arm. And when I walked down the street, everyone turned to look.’
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