Japan’s losing battle against yakuza

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Japan’s losing battle against yakuza

Hollywood has long fetishized Japanese gangsters, with their full-body tattoos, missing pinkies and harems of buxom groupies. Ever since Sydney Pollack’s “The Yakuza” in 1974, the colorful mafiosi have provided regular fodder for directors including Ridley Scott and Quentin Tarantino.

Curiously, studios are again abuzz with a flurry of Japanese mob projects. Warner Bros. is developing “The Outsider,” about an American prisoner of war who joins the yakuza after World War II. Robert Whiting’s 1999 book “Tokyo Underworld,” which has gotten nibbles from Martin Scorsese, is being made into a U.S. cable-television series. Perhaps most timely of all, Jake Adelstein’s 2010 memoir, “Tokyo Vice,” is coming to the big screen, starring Daniel Radcliffe of “Harry Potter” fame.

Adelstein’s life story as a crusading Tokyo reporter who exposed the yakuza’s infiltration of Japan’s economy has remarkable echoes in current events. Banking giants such as the Mizuho Financial Group are getting busted for making loans to yakuza-linked figures, amid a broadening investigation. It’s long past time Japan stamped out the well-connected gangs Adelstein likens to “Goldman Sachs with guns.” Their eradication, in fact, should be an important part of Prime Minister Shinzo Abe’s drive to increase competitiveness.

“There’s a lot in the book about organized crime’s ties into the political and financial sphere, and as the years have passed, much of it has proven to be prescient,” Adelstein says.

Unlike in the U.S., wise guys operate legally and in plain sight in Japan. The country’s roughly 63,000 organized-crime members hand out business cards, have office buildings and fanzines, control large chunks of the entertainment trade, and enjoy significant political influence. When they aren’t collecting protection money, extorting shop owners, running prostitution rings, trafficking humans or laundering money, the yakuza are dabbling more and more in mainstream finance. They’re buying and selling stocks, flipping real estate and even acquiring companies.

Oddly, much of the recent pressure to crack down on the gangsters originates with U.S. President Barack Obama. In a post-Sept. 11 world, the United States is concerned that Japan is too lax on cross-border organized crime and the huge, opaque sums of money the yakuza send zooming around the globe. The U.S. Treasury Department estimates that Japan’s biggest crime family, the Kobe-based Yamaguchi-gumi, alone generates “billions of dollars annually.”

Japan’s few enforcement efforts all too often lack teeth. In 2011, the Financial Services Agency enacted ordinances making it harder to do business with the yakuza, but didn’t outlaw such groups outright. Then something unexpected happened: Obama’s White House pounced with an executive order demanding that financial institutions freeze yakuza assets. In 2012, Washington blacklisted the Yamaguchi-gumi.

The Treasury started small, freezing about $55,000 of yakuza holdings, including two American Express cards, according to documents obtained by Bloomberg News under the Freedom of Information Act. The move was a clear slap in the face of Japan’s government, though, not to mention the yakuza.

The Yamaguchi-gumi is the reason Adelstein, 44, is a household name among the underworld. In 1993, the Missouri native became the first non-Japanese to work as a police reporter for Japan’s Yomiuri Shimbun, the world’s largest newspaper. His snooping landed him in serious trouble with Goto Tadamasa, the twisted, Yamaguchi-gumi-affiliated crime boss. Adelstein learned that in 2005 Tadamasa and three other yakuza had somehow received lifesaving liver transplants in California, abetted by U.S. authorities. Adelstein has been under police protection ever since.

If the Yamaguchi-gumi were listed on the stock exchange, Temple University’s Jeff Kingston wrote in his 2011 book “Contemporary Japan,” it “would be the Toyota in its sector.” Morgan Stanley economist Robert Feldman once called the gang Japan’s “largest private-equity group.”

In 2007, the last time Abe was prime minister, Feldman wrote a report detailing how the yakuza held Japan back: “The influence of organized crime in both political and corporate/financial circles remains a barrier to an efficient economy and efficient financial markets. The loser has been Japan’s competitiveness. It seems unreasonable to expect foreign companies and investors to expand activity in Japan while the issues with organized crime remain so troubling.” Six years on, the situation is only modestly improved.

Abe should use his second stint as leader to accelerate the crackdown on Japan’s crime syndicates. You can bet the yakuza’s vast and detrimental role in the economy will be a sticking point in Japan’s negotiations to join the U.S.-led Trans-Pacific Partnership. A burst of Olympics-related spending between now and 2020 will offer all too many opportunities for graft and extortion. Why not just go ahead and made the mobsters formally illegal now and round them up? Their ranks are thinning - there were 87,000 gangsters in 2004 - but not nearly fast enough.

I asked Adelstein a question he gets often these days: How does it feel being played by Harry Potter? The answer was a bit surprising. “I can’t think of anyone else I’d rather have be me,” Adelstein said. “If they reissue the book with his picture on the cover, I can fade into obscurity rather nicely, I imagine.” Even if that doesn’t work, Adelstein remains hopeful that his life can one day return to normal. “By 2020, I think their day will be done. That’s not so far away.”

It’s not so close, either. For Japan’s sake - not just Adelstein’s - Abe should start hastening the yakuza’s day of reckoning.

*The author is a Bloomberg View columnist.

by William Pesek

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