Tokyu justified its actions by citing recent changes in the Hilton corporate structure, which included a planned merger of a subsidiary, Hilton International, with Trans-World Airlines. The move, in Tokyu’s eyes, invalidated its contract with Hilton; the conditions under which the original agreement had been made had changed; therefore, their contractual obligations no longer existed.
The dispute reflected a fundamental difference between Japanese and Americans in regard to the concept of written contracts. Whereas Americans adhere verbatim to the letter of an agreement and go to court if there is any deviation, Japanese believe it valid only so long as the conditions under which it was reached continue to hold true. If not, they will rewrite the contract to suit the changing circumstances. It was the difference between the American practice of trying to close every conceivable loophole versus the Japanese practice of viewing contracts in general with some suspicion, assuming from the beginning there will be flexibility on the part of both parties involved, should conditions change.
To foreigners in Tokyo, however, the Hilton affair also reflected something else – a familiar pattern of deception. As the complaint frequently went, the Japanese, in the beginning of a relationship, would welcome foreign partners, learn as much as they could, then, once they thought they had acquired enough expertise and needed no further instruction, start looking for a way out of the deal. (It did not escape Nick’s attention that Nihon Kotsu was still running the small chain of medium-sized Nicola restaurants set up under the original joint venture deal.)
The Hilton corporation had immediately hired Thomas Blake-more, who, the next morning, filed a request for an injunction in the Tokyo District Court, claiming that Tokyu lacked just cause for its actions. Although most observers expected the court to procrastinate and then, after a long delay, rule in Tokyu’s favor, the district court judge surprised everyone by granting the injunction – one of the few times the Tokyo District Court had ever done so.
After the Hilton staff moved back into their offices, Tokyu took a page from the Hilton book and filed a suit of its own. But in the end, in still another surprise, the court ruled Tokyu would have to abide by the contract. There was widespread speculation that pressure had been put on both Tokyu and the court by the Japanese government because of the implications that a ruling against Hilton would have (i.e., that it would be futile for a foreign company to enter into a business agreement with the Japanese because the latter might not stick to it).
In Nick Zappetti’s case, however, the Tokyo District Court reverted to form, ruling that too much time had passed between the actual land seizure and the filing of the injunction some days later.
And thus did he press on with his suit.
There was, of course, no evidence of any ulterior motive on the part of Nihon Kotsu when the company originally entered into the agreement with the big, rich white gaijin. Yet, the takeover kept Roppongi buzzing for months. It was viewed as more than just a business deal gone awry. It was a highly symbolic act. Many Japanese saw it as putting the arrogant American in his place – and as yet another step in taking back their country from the conquerors. The company could have had Zappetti continue to run his business and arranged to take a percentage of the profits, but chose not to. It seemed clear they wanted the business as much as the property.
Coincidentally, The Emerging Japanese Superstate, by Herman Kahn, had just been published, outlining how Japan would eventually be overtaking the US economically. It was a revolutionary idea to the ordinary Japanese man in the street, perhaps unimaginable to most, but to those familiar with the substantial trade surpluses Japan was beginning to build up with the United States and the rest of the world, and the growing realization that the yen was vastly undervalued against the dollar, Kahn was considered most prescient.
For an Occupation-era American to own such a valuable and visible plot of land as Nicola’s had, a slab of real estate that was destined to become one of the most expensive pieces of property in the world (worth nearly $150 million twenty years later, when Japan would be at the height of its economic power) was unseemly, especially when the owner was so ostentatious about his wealth and so arrogant. It was just one of the vagaries of postwar misfortune that had to be reversed, one of the many wrongs to be righted as Japan reasserted itself.
Proceedings began on March 13, 1973, in a sparse, utilitarian, oak-paneled room in the Tokyo District Court, closed, as was customary, to photographers or TV cameras. There was one black-robed judge to hear the arguments and render a decision. In their opening statement, lawyers for the plaintiff presented their argument that Nihon Kotsu had no right to take over Nicola’s restaurant because there had been no bill of sale, no bai-baikeiyaku, and that the loan agreement had been intended to refer only to the land and the building – not the actual business.
Lawyers for the defense retaliated that Nihon Kotsu did indeed have the right to take over the business, as well as the land, according to the way they interpreted the contract, because the business was so closely connected to the land and the building.
It would take two years for the first witness to get on the stand.
It would take fifteen more to adjudicate the dispute and reach a decision.
By the time a final settlement was reached, Nick Zappetti would be an old man.
6. Behind the Shoji
Over the years, Japan developed a reputation, internationally, as a place of high ethical standards. And justifiably so in many respects. It was a place where shopkeepers found it unnecessary to chain down their goods, where lost wallets inevitably made their way back to their original owners, the cash inside untouched, and where hardly anybody tried to run out on a bill. It was a model society, visiting foreign journalists and sociologists in the post-Olympic era gushed. It was peaceful and affluent and the people were moral and yasashii – a word meaning meek, gentle and kind, and one, incidentally, that Japanese especially liked to use to describe themselves.
The other side of the coin generally escaped notice – except in certain circles like Roppongi Nicola’s. The proprietor, to be sure, had seen his share of astonishing displays of integrity: Once, when a Tokyo post office mistakenly sent an express mail package of Zappetti’s out by regular mail, the regional postal director paid a personal visit to Nicola’s to refund the money, apologize and present ‘Meesuta Neecola-san’ with an elaborately wrapped package of soap to boot. However, the longer Zappetti stayed in the so-called straight world of business, the harder it became to square the reputation for Japanese honesty with what he witnessed going on around him – and that wasn’t even counting his experiences in litigation, in which he remained deeply enmeshed.
In his two decades as a restaurateur, he had had to fire cooks for taking kickbacks from the food suppliers, he had had to discipline waiters for hawking TV sets and stereos of dubious origin to his foreign clientele on the side, and he’d had to ferret out employees who robbed him of everything from cash to a brand-new copying machine he was renting. Among his competitors, price fixing and collusion were commonplace, and every independent businessman he knew cheated on his taxes. It was the national pastime. Near the end of every fiscal year, for example, there was a mad rush among Tokyo entrepreneurs to generate false ‘entertainment’ receipts in order to take advantage of the Tax Bureau’s liberal allowances for such deductions. He guessed there were more tax cheats per capita in Japan than in any other country of the world. And, he would readily admit, he was one of them.
There was more. Visiting boxing promoters from Manila routinely complained to him of having to intentionally drop matches if they wanted to get invited back – that Japanese still had to win. Racetrack aficionados who patronized his restaurant frequently spoke of rigged horse and bicycle races, and even the gaijin professional baseball players, who had made Nicola’s their hangout, had talked of being offered money by gamblers to participate in a fix (500,000 yen per player was the going rate). One of his regular customers, an up-and-coming young
sumoist, suddenly confessed to him one day he had been ordered to start losing more often by his stable master; his success was upsetting the senior wrestlers in the stable.
Then, too, the underground government was as entrenched as ever, and the United States continued to be involved in its tangled skein. It was an open secret among a certain segment of Nicola’s clientele that the CIA was continuing to funnel US aid to the ruling LDP to the tune, it was said, of about $1 million a month (a practice that continued until Japan’s growing trade surplus with the United States became a serious issue). It was another open secret that LDP politicians were taking the money and using it to buy votes, the going rate being 10,000 yen a head in a national election. And it was also common knowledge that the mob was supporting the LDP right along with the party’s friends in the CIA and big business – especially the gang-controlled industries that were dependent on government contracts in public works and construction. It was quite a coalition.
A walking symbol of this shadowy web of connections was a curmudgeonly LDP Dietman named Koichi Hamada, who could frequently be seen cavorting in Akasaka-Roppongi area nightspots. Hamada was a former member of an affiliate of the Inagawa-kai, the nation’s third largest gang, and a man who had done time in prison for assault and embezzlement before turning to the more lucrative field of politics. He was a protégé of one-time CIA employee and political fixer Yoshio Kodama, an avowed disciple of then Inagawa-kai boss Kakuji Inagawa – a person whom Hamada openly said he respected more than anyone else. Hamada reportedly received assistance from his former colleagues during election campaigns. During one awe-inspiring trip to Las Vegas in October of 1972, Hamada lost $1.5 million playing baccarat at the Sands Hotels Casino. However, his debts were conveniently paid by his traveling companion, a hotel and transportation tycoon named Kenji Osano, yet another Kodama business associate, who had links to the highest levels of government on both sides of the Pacific (during the September 1972 summit in Hawaii between the new prime minister of Japan, Kakuei Tanaka and US President Richard Nixon, Tanaka stayed at a hotel owned by Osano), not to mention a wide assortment of underworld characters of both Japanese and American pedigree.
Osano and an Inagawa gang underboss named Susumu Ishii had been running gambling tours to Las Vegas for well-to-do Japanese – an activity which, in turn, prompted Caesar’s Palace of Las Vegas to open an office on the Roppongi strip to collect unpaid gambling debts. By 1975, the total Caesar’s tab in Tokyo surpassed 150 million dollars, which caused three Japanese employees of the Caesar’s Palace East operation to begin threatening overdue clients with death at the hands of the American mob – a collection tactic for which they were eventually arrested by Tokyo police.
There was wide, if unproven, speculation that Hamada’s baccarat losses represented a secret way of circulating funds back to the United States, funds that had originally been supplied by the CIA for use in Japanese political campaigns. Such speculation was perhaps natural given the colorful backgrounds of the personalities involved and further fueled, possibly, by the fact that the casino in question was owned by Howard Hughes, whose right-hand man was Bob Maheu, an ex-CIA employee. (Interestingly enough, some $200,000 of the loot used to pay Hamada’s gambling debts was eventually traced back to the American aircraft manufacturer Lockheed, which made the U-2 spy plane for the Central Intelligence Agency – but that is a tale which comes later).
The quality of cross-cultural decadence in the Roppongi-Akasaka area was further enhanced by the entirely new phenomenon of high-priced Caucasian prostitutes who exclusively solicited monied Japanese. They charged outlandish fees – 50,000 yen for thirty minutes in a backstreet ‘love hotel’ called the Chanté – and had more business than they could possibly handle. Their leader was a busty, blue-eyed German blonde in her thirties named Maria Sojka Hannelore, who came to Tokyo by way of Hamburg, London, and New York. She was featured in a Japanese magazine article, which introduced her as the ‘Queen of the Tokyo Night World’ and the richest, most successful gaijin hooker in the history of Japan.
‘Japanese men are not used to a woman like me,’ she was quoted as saying. ‘Sometimes all I have to do is undress and kaput. I’m in and out of the room in ten minutes.’
She became famous in Roppongi for the time when, needing a new permanent base of operations, she paid for a half interest in a local bar called Danny’s Inn, by dumping a paper bag filled with a quarter of a million dollars in cash on a table where the owner was sitting.
Prostitution was illegal in Japan, but the law against it was hardly ever enforced. The Akasaka police had thick files on Maria and all of her friends but left them alone as long as they did not solicit on the street – perhaps because so many LDP politicians could be seen at Danny’s Inn, stopping off to get serviced on their way to the Copa.
Maria earned enough to buy a town house in New York and her own real estate firm, in preparation for retirement. But she never got a chance to enjoy the fruits of her labor. In November 1978 she was discovered strangled to death in a room at the Chanté, her assailant, a dissatisfied customer and fringe underworld figure.
Perhaps no area of international commerce matched the aircraft industry for corruption, and it seemed to get worse by the year. The major US aircraft manufacturers, along with the trading companies that represented them, and the Japanese officials and industrial leaders they solicited, were all up to their necks in bribes, payoffs and whatnot because of the lucrative contracts available.
It is worth noting that while there was a growing trade imbalance between Japan and the United States and complaints about Japan’s closed markets were beginning to be more loudly voiced, there was hardly any grumbling at all from the civil or military aircraft interests in America. In fact, the United States had a virtual monopoly on the sale of military aircraft and equipment to Japan. Japan Self-Defense Force organizations were constructed and patterned after their US counterparts. JSDF officers were bred in a near carbon copy of the US system, and they were sent to the United States for training. Thus, it was only natural to buy American.
Moreover, the system was set up to the benefit of Americans in a number of other ways as well. The US Defense Department decided which configurations it would give Japan and which it would hold back. It arbitrarily decided what price Japan would be charged without giving any advance notice. It also had free access to any advances in technology that the Japanese might happen to make in the course of using the equipment, under a Flow Back Technology clause. Along with American-imposed restrictions prohibiting Japanese from developing their own aircraft, it was the price Japan had to pay for being ‘protected’ by the United States under the Security Treaty – although no one seriously believed that the United States could possibly prevent a massive nuclear first strike on Japan.
The Copacabana remained the favorite hangout of the American executives from Grumman, Lockheed, McDonnell-Douglas, and Northrop, and because Zappetti remained a Copa regular and over the years had developed special relationships with some of the Copa hostesses, he kept up to date on the goings-on in the air industry. He had made an arrangement with them to bring their well-heeled patrons to his restaurant on their after-hours dates, and he padded the bill with a ‘service charge’ that he made certain found its way into the hostess’s purse. Many a grateful hostess bedded him free of charge by way of thanks for the extra income, filling his ear with the latest Copa gossip in the process.
There was an old saying in Japan to the effect that the ideal woman is one who is dumb on the outside and clever underneath. And that description certainly fit the Copa girls, especially those in the secret employ of the trading houses. There were girls who could charm a man with mindless flattery in one moment, providing the sort of ‘adult nursery service’ that such places demanded, and in the next launch into a discussion about turbine surges, maintenance hours per flight hours, and the three axes of stabilization required in the F-104 – pitch axis, roll axis and directional axis. Talking to them, Z
appetti thought, was sometimes like talking to an aircraft sales rep; half the time he couldn’t figure out what they were saying.
Zappetti toyed with the idea of setting himself up as an aircraft consultant, in partnership with one of the Copa girls, selling what she learned to the highest bidder. He gave the idea up when he realized how much trouble it would be to learn all the jargon.
As it turned out, there were some Americans who played the aircraft sales game better than anyone ever suspected. One was Copa regular Harry Kern, a former Newsweek foreign affairs editor and lobbyist with the postwar ACJ. The Washington-based Kern was a close associate (and English tutor) of ex-Prime Minister Nobusuke Kishi, whose career Kern had helped resuscitate while with the ACJ and whose blood brother Eisaku Sato was prime minister of Japan from 1964 to 1972. The Sato faction of the LDP also supplied most of the subsequent PMs. Kern became a highly paid consultant to Grumman – which hoped to take advantage of his connections in high places in the LDP – while simultaneously working for the Nissho Iwai trading company in a second secret deal. It was in this capacity that Kern arranged for the Japanese government to purchase Grumman’s E-2C early warning patrol plane through Nissho Iwai in exchange for a substantial secret kickback – 40 percent of Nissho Iwai’s commission from Grumman (a portion of which was paid to former defense chief Raizo Matsuno and other Japanese officials as a ‘reward’). Kern eventually lost his job with Grumman when executives there discovered what he was doing and reported him to the SEC. However, an astonished Japanese press memorialized Kern in a series of feature magazine articles, nicknaming him ‘The Blue Eyed Fixer’ and ‘The White Wirepuller’. After all, it wasn’t often that a Japanese firm hired an American to gain access to the halls of power in Tokyo.
Tokyo Underworld Page 17