Tokyo Underworld

by Robert Whiting

  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.

  By June 1976, the handwriting was on the wall. The company owed billions of yen in unpaid loans; its credit, theretofore guaranteed by the Japan Real Estate Bank, one of the many institutions Kodama was affiliated with, was now suddenly cut off. Kodama embezzled millions of dollars from TSK coffers and the company was forced to file for bankruptcy – on the very same day, coincidentally, that Kodama, suffering from a sudden attack of deteriorating health, was wheeled into Tokyo District Court to start his long and lengthy trial.

  THE ENIGMA

  Just exactly why some people in Washington decided to open an investigation into bribery by US corporations overseas and publicly reveal the Lockheed payoffs was something many people in Japan wanted to know. It was certainly the subject of much debate around Nicola’s tables, especially among the foreign journalists who dined there. Some of them cited the new so-called post-Watergate morality as the main motivating factor, rectitude in politics having become the new fashion in Washington, while others claimed an internal CIA rift as a factor. Still others, however, believed the reason was simple revenge.

  The Watergate scandal that forced US President Richard Nixon out of office in 1974 had brought about a change in the US power structure. It had meant the end of what some writers called the ‘Southwestern Money Nexus’ (‘Southwestern’ being a referenc
e to Nixon’s California roots), which included the disgraced expresident, Lockheed, the Pentagon and the CIA. Taking its place was the ‘Eastern Establishment Nexus’, which included the Rockefeller Group, the Eastern seaboard multinationals and McDonnell-Douglas. Since Tanaka, Osano, Kodama and the others were known to be tied up with Southwestern Lockheed money, they had to go.

  A noted believer in this theory was Kodama himself. Up until the time of his death in 1984, he had been trying to find out why he and his cronies had been singled out for prosecution while others equally guilty – namely, those involved in bribery with Lockheed’s rivals – went scot-free. Mitsui author John Roberts, a Tokyo-based journalist and an acknowledged expert on the Lockheed scandal, helped prepare a written appeal by Kodama to a US court for an explanation and reported that Kodama seemed to think it had been a political move by the Rockefeller clique. ‘The best answer he could offer up’, Roberts said, ‘was that he had egregiously offended the omnipotent Rockefellers by successfully persuading the government to cancel the purchase of McDonnell jet fighters … and buy Lockheed instead.’

  It may be worth noting that the ranking Republican on the Church Committee was married to a Rockefeller and that the new vice president of the United States, after Nixon’s resignation and Gerald Ford’s assumption to the presidency, was Nelson Rockefeller.

  It may also be worth noting that Tanaka himself had suspected that the Rockefellers were out to get him. When subjected to hostile questioning about his political irregularities at a 1974 press conference at the Foreign Correspondents Press Club of Japan, Tanaka angrily stormed out of the room, remarking loud enough to be heard, ‘Kore wa Rokafera no shiwaza’ (This is Rockefeller’s doing).

  In any event, the complete truth of the Lockheed scandal was never revealed. Then US Secretary of State Henry Kissinger obtained a court order that prevented full disclosure of the affair on grounds that revealing certain US government documents would damage the country’s foreign policy interests. For years afterward, Lockheed attorneys would still be arguing that disclosing certain matters would adversely affect the reputations of foreign officials important to good relations with the United States.

  An enduring enigma was the fate of bearer checks issued by Lockheed totaling $1.6 million and intended for Yoshio Kodama and Kenji Osano. The checks had mysteriously disappeared and were cashed before Lockheed could cancel them – Kodama’s explanation being that they were stolen while in his possession. Although not obligated to do so, Lockheed then issued another set of checks which Kodama managed to hold on to.

  The question naturally, was, why?

  There are some people who suspect the original $1.6 million wound up in the re-election campaign coffers of President Richard Nixon. Their line of reasoning was that Lockheed felt obliged to help out at election time with a nicely laundered donation because Nixon had saved the company from bankruptcy. They found it a curious coincidence that the $1.6 million was approximately the same amount of money that mobster-turned-politician Koichi Hamada had lost at the Sands Hotel in Las Vegas at approximately the same time the checks had vanished.

  Interestingly, in April 1984, the Tokyo High Court determined that Kenji Osano had actually used Lockheed money to pay Hamada’s gambling debts. According to the verdict, Osano received the money in an attaché case from a Lockheed executive at 5 p.m. on November 3, 1973, at the Los Angeles airport and within an hour was on an airplane to Las Vegas, where he turned it over to Sands personnel on Hamada’s behalf, to cover the final installment of what Hamada owed.

  The money was believed to have been a final payment to Osano for his role in persuading ANA to buy Lockheed Tri-Star airliners as well as Orion P3C antisubmarine patrol planes (later). Journalist Takashi Tachibana, in his four-volume work on Lockheed, Rokkiido Saiban Bochoki (A Record of the Lockheed Trials), Asahi Shimbun 1994, the most thorough and reliable work on the subject, noted that the amount, $200,000, was significant. It reflected a difference caused by a fluctuating yen-dollar exchange rate to wit: 300 yen to the dollar when the first ‘stolen’ $1.6 million was paid as opposed to 260 yen to the dollar when the second $1.6 million was paid. Lockheed, claimed Tachibana, agreed to add on the extra yen and give it to Osano, because there was still work to be done involving the P3C.

  However, speculation that the Lockheed money was used for secret campaign contributions has remained, over the years, only that – despite the incongruity of the lost checks and their speedy replacement. Subsequent investigations by SEC and the Justice Department over the missing checks were inconclusive and no one has ever satisfactorily explained the Lockheed–Osano–Hamada–Sands Casino link and what, if any, the CIA’s and/or CREEP’s involvement was. In fact, US federal courts have blocked full disclosure of the details of the Lockheed case since Kissinger’s court order. Osano went to his grave steadfastly denying the charges against him. Hamada, who resigned from his Diet seat when his high-stakes gambling adventures became public (he was re-elected in 1980), has frequently been quoted as saying ‘Shinde mo ienai’, meaning, basically, ‘I’ll die before I tell what really went on.’

  No doubt the timely demise of several key people helped keep secrets safe. Tanaka’s chauffeur, eyewitness to some of the late-night payoffs, was found in his car, dead from carbon monoxide poisoning in what was adjudged to be a suicide, much to the surprise of everyone who knew him. However, a close relative was overheard saying that if she dared to pursue an inquiry into his demise that she would be ‘next’. The head of the Kodama-owned company Japan PR, which formally represented Lockheed, a Japanese-American named Taro Fukuda, who also knew where all the skeletons were kept, died of heart failure while in the hospital being treated for cirrhosis of the liver. During his hospital stay, he had expressed fear of being poisoned and even had mapped out an escape route from the building. Members of his family reportedly did not believe his death was due to natural causes, although they too shied away from speaking out on the matter.

  Still another mysterious death was that of a political reporter for the Nihon Kezai Shimbun, Japan’s leading financial paper, who had closely followed the Lockheed scandal and who had conducted an in-depth interview with Lockheed chief Kotchian during one of the latter’s final trips to Tokyo before the scandal broke. The reporter was only forty years old and in good health when he collapsed and died one evening – some ten days after the Church hearings had begun. He had left work, stopped at the Copacabana for a drink, then returned home, where he took a bath and ate dinner. Lighting up a post-meal cigarette, he suddenly complained of a severe headache. His wife called an ambulance, which rushed her husband to the nearest hospital, but he was pronounced dead on arrival. The attending physician listed the cause of death as heart failure but could not give a satisfactory response to the wife’s questions as to why heart trouble would cause headaches.

  It was still two months before Tanaka’s involvement would be revealed and some 2,000 pages of SEC material delivered to Tokyo. Yet when a close friend of the reporter heard the news of his death, his immediate response was, ‘They got him.’

  Who ‘they’ were never became clear.

  When all was said and done, not one person charged in connection with the scandal ever did prison time. Kodama escaped full prosecution under the law. He was too ill, his doctors conveniently concluded, to testify at his trial, and court findings on his involvement were accordingly kept under seal, as required by Japanese statute when the defendant cannot physically present himself before the judge. Kodama would spend the rest of his life at home ‘convalescing’ for another eight years before passing away at age seventy-two. Unlike his American counterpart Richard Nixon, who was disgraced and dispatched into political oblivion for some years by the Watergate scandal, Kakuei Tanaka remained a mightily influential figure. Out on bail and awaiting trial, he was not only overwhelmingly returned to his seat in the Diet but also maintained control over the largest single faction of the ruling LDP. This allowed him to allocate cabinet post
s, choose party leaders, dispense patronage, and otherwise run the show from behind the scenes. It was said that during the decade following his arrest, he handled 1,000 ‘cases’ a year. He was once quoted as saying, ‘A prime minister is like a hat. You can change it as you wish.’ His influence over his protégé Yasuhiro Nakasone, the former JPWA board member who was prime minister between 1982 and 1987, was so great that a cynical press corps devised the sobriquet ‘Tanakasone’ to refer to him.

  In 1983, Tanaka was convicted of bribery (specifically of taking money in exchange for influencing All Nippon Airways to buy Lockheed planes) and sentenced to four years in prison. He thus became the only postwar prime minister in Japan to be convicted of a crime. However, Tanaka appealed and during the lengthy appeals process was again re-elected to the Diet by his rural constituents, ever grateful for the new highways, high-speed trains, and other material benefits he brought them. He claimed that the overwhelming margin by which he had won constituted vindication.

  Of the other thirteen people indicted in the Lockheed scandal, all were found guilty. All appealed, were found guilty again, and appealed a second time, to the Supreme Court. It took nineteen years for the case to drag itself through the legal system before all the appeals had been rejected, during which time the accused successfully continued their careers. Final sentences were suspended for reasons of advanced age and ill health, thereby illustrating the difficulties of prosecuting political corruption in Japan. Tanaka remained in power until a stroke felled him in 1986; he died in 1993. Kenji Osano, convicted of four counts of perjury that included lying about receiving Lockheed money and denying he had conspired with Yoshio Kodama to help Lockheed vis-à-vis the P3C (there were no counts of bribery because the three-year statue of limitations in effect in Japan had expired), continued to accumulate wealth until his death in 1987, adding more hotels to his Waikiki collection (which already included the Surfrider and the Royal Hawaiian) and running his gambling tours to the States with Inagawa-kai sub-boss Susumu Ishii.