Japan

The Lockheed bribery scandal in Japan has been compared to Watergate during the past year; and for political scientists with an interest in measuring the fever charts of democracies, the parallels are close and instructive. The damage done so far to Japan’s existing establishment is of Nixonian proportions. Ex-Prime Minister Kakuei Tanaka, who had already resigned in disgrace, went on trial early this year for accepting $1.7 million from various Lockheed intermediaries in return for favorable action on aircraft sales to Japan. Four other Diet (parliament) members have been publicly named as the “gray-area officials” who received at least one million yen ($3400) apiece but cannot be prosecuted yet because of legal technicalities, and there is clear evidence against nine more.

Thanks to Lockheed, the Liberal Democratic Party—the broadly based center-conservative party which has run Japan with a commanding margin for the last twenty-two years—was almost unseated in December by a sullen electorate, its once formidable majorities cut down to 42 percent of the popular vote. A coalition government is on the way; the current prime minister, Takeo Fukuda, seventy-one, may be the last of the LDP gerontocracy that has ruled since 1955.

The business elite that presided over Japan’s high-growth era during the 1960s is equally in trouble. Leading executives of Marubeni-Iida, one of Japan’s big conglomerate trading firms, and All-Japan Airways, the country’s biggest privately run airline, are also on trial. Their public disgrace has climaxed a series of disclosures over profiteering, price-fixing, and the like throughout Japanese industry. The day when the shacho (company president) received the kind of automatic deference once accorded to admirals and generals is going; tainted with the same charges of corruption as their politician friends, the revered managers of Japan, Inc. have lost their halos.

A disgraced chief executive, a sorely chastened establishment, a disillusioned public which reads almost daily disclosures of undercover deals between government officials and their bigbusiness friends: Japan’s parallels to the Watergate period in the United States can be cited indefinitely. In these two mass-communication societies, the patterns of exposure and investigation were strikingly similar—first the journalist pointing the finger, then the storm in press and community, prosecutors harried into action, and, finally, due process of law (but only after the now familiar ritual of television hearings played to a national audience).

Yet it is wrong to confuse these similarities with a cause-and-effect sequence and conclude that Japan’s current political ailments are just one more modern disease the Japanese have caught from us. The very label “Lockheed scandal” is deceptive. For the king-sized payoffs of an American airframe manufacturer are but one symptom of an endemic Japanese political problem, and they bear only slightly more significance to the whole than the Plumbers’ activities bore to the fabric of political and business corruption which Nixon’s hubris constructed in America.

The Tanaka connection

The story behind Lockheed is more properly called the Tanaka money connection— Tanaka kinmyaku in Japanese. Although it surfaced in 1974 and centered on one man’s casual contempt for political morality, its roots go back more than two decades. The business and political collusion behind the Lockheed story represents the dark underside of Japan’s miraculous rise during the sixties to economic superpower status, just as the crooked activities in the Nixon White House were by-products of the growing centralization of power in Washington. In both countries the exposure of wrongdoing can be credited to the integrity of a few interested people, the backing of an aroused democratic electorate, and the beneficent workings of happenstance.

When the U.S. occupation purged Japan of most of its older politicians and business leaders in the late 1940s, a generation of forty-year-olds faute de mieux took charge of the country. They found themselves in jobs which young men in Japan’s age-conscious society normally had no chance of reaching. Stimulated by their war experiences, the new leaders threw themselves first into reconstruction, then into the great Japanese business surge of the fifties and sixties. They became aggressive and pragmatic by necessity, taking leadership into their hands as quickly as their forebears, the young samurai of the nineteenth-century Meiji Restoration, had reacted to a similar emergency. They made things work, from supertankers and bullet trains to new networks of financial and trading companies, and they grew confident with practice.

Their schoolmates and associates from the pre-war bureaucracy, also unexpectedly promoted by the purge, took over the administration of government. Both businessmen and politicians pledged support to Japan’s widened post-Occupation democracy. Yet a good many pre-war practices and semifeudal loyalty codes persisted behind the facade of political egalitarianism and new business efficiency. Shadowy bosses, power fixers with large sums of money at their disposal, continued to operate in the background of the new politics. As often as not, these kuromaku (behind-the-scenes manipulators) held the power balance among the factions of the Liberal Democratic Party, each of which was grouped around an individual leader whose constant need to take care of his followers invited the worst sort of money politics.

Among the more sinister and competent kuromaku was a pre-war nationalist bully named Yoshio Kodama. Kodama had used some of a small fortune made from wartime navy procurement trading to help bankroll conservative politicians in the early fifties. Thereafter, whenever LDP money politics broke into scandal, Kodama seemed to be involved. And there was plenty of scandal, from the Showa Denko bribery case in 1948 through the shipbuilding procurement case in 1954 down to the Japan Line stock manipulations of the sixties. Indeed, the number of scandals, and the increasing amounts of money involved, were in their own way an index of Japan’s march toward affluence.

On occasion, as in the first two cases cited above, the scandals brought down cabinets. But although they impelled many resignations over the years, they resulted in relatively few arrests and only intermittent public outcry. A major reason for this was the lack of an effective opposition. With an apparent death wish that only a trained ideologue could understand, the Japanese Socialists have continually preached “revolutionary Marxist struggle” in a country where living standards have risen dramatically under the local brand of capitalism. The voters are well aware of the incongruity of this message and they have repeatedly demonstrated their distrust of Marxist socialism at the polls. Then, too, ideology has not kept Socialist politicians from being implicated in most of the major postwar scandals (Lockheed included) along with their conservative colleagues in the Diet.

Another reason for lack of voter concern about corruption was prosperity itself. So successful were the businessmen in promoting Japan’s high-growth policy that their allied political party stayed in power from the fifties until now, comfortably and with increasing arrogance doing business at the same old stand. In the process Japan became a marvelously affluent society. The voters, as little worried by behind-the-scenes corruption as they were by ideology, kept the business bureaucrats in.

When Kakuei Tanaka was elected prime minister by the LDP in 1972, the Liberal Democrats, along with the rest of the country, were enjoying the last flood tide of high-growth euphoria. “The computerized bulldozer,” as the fifty-two-year-old Tanaka was called by his admirers, was the youngest prime minister in Japan’s postwar history, and the first to get to the top without a college degree in this country of establishment education. His widely publicized plan for shifting Japan’s industry to less populated areas in the west— The Reconstruction of the Japanese Archipelago—became a best seller. His popularity figures in the polls were unprecedentedly high.

Actually, Tanaka’s comparative youth was deceptive. He was no Jimmy Carter, suddenly appearing from the outside. He had been elected to the Diet in his twenties and had served as chief party secretary for the Liberal Democrats, finance minister, and, most recently, minister of international trade and industry. Partly because of his efficiency, and partly because of his strong power base in the north, he had been accepted by the political establishment. He was also, not incidentally, a successful contractor whose companies had landed many government jobs. There were whispers about Tanaka’s “votebuying” and loose ways with money. But Japan’s conflict of interest laws are loose, too, and nobody paid much attention to this factor. Tanaka was clearly a man with a mission: to keep up the good times and the growth rate.

He was too late. Less than a year after Tanaka took office, the energy crisis hit Tokyo. The loss of cheap oil put an end, probably forever, to the ambitious growth projections of the bureaucrats of Japan, Inc. Similarly, the reconstruction of the Japanese Archipelago turned into a premature realestate boom as speculators, innocently or not, started buying up property in the very areas where cheap land for development was supposed to abound. Inflation reached over 20 percent and Tanaka’s popularity percentages in the polls started to drop proportionately.

An uncritical disciple of the highgrowth policy, Tanaka had neither the wit nor the knowledge to start cutting back. Instead he rounded up all the big business money he could find to put the LDP across in the 1974 elections—some companies, Mitsubishi included, literally fielded their own candidates—while trying to hold his popular support, like Nixon, by opening diplomatic relations with China. (Earlier, in 1972, he had held a widely publicized summit meeting with Nixon during which there was portentous conversation about Japan’s purchase of American aircraft.)

Neither expedient worked. Land speculation grew into a national scandal, and the large trading companies were the principal offenders. By 1974 the consumer price index had soared. Wholesale prices also jumped. The unions, conspicuous champions of high growth, pushed their wage increase demands to the 39 percent mark. Big business came under attack everywhere, for price-fixing, for pollution, for insufficient planning. Although Tanaka and the LDP managed to squeak through the 1974 elections with reduced majorities, criticism continued to grow, and by late 1974 Japan was experiencing its worst crisis of confidence in decades.

“Back money”

At this delicate moment in the political maneuvering of Kakuei Tanaka and his party, the November 1974 issue of Bungei Shunju, a widely read and respected general magazine, appeared with two heavily researched articles on the Tanaka money connection. The first, modestly titled “Research on Kakuei Tanaka,” summarized six months’ work by a team of reporters headed by Takashi Tachibana. Complete with graphs and statistics, it documented the extraordinary accumulation of behind-the-scenes money that had in effect put Tanaka into office.

Starting more than a decade before, when he was finance minister, Tanaka had constructed a network of dummy corporations—so-called “ghost companies”—in addition to his regular businesses. Through these he had channeled contributions from business supporters, handing them on to members of his faction and other useful politicians.

Tanaka’s leading business crony, Kenji Osano, was his partner in many of these corporate activities, which involved real estate, construction, and transportation as well as political payoffs. The amount of government land sold off to private interests during Tanaka’s term as finance minister, for one thing, was almost triple that sold by his successors or predecessors. Tanaka himself was revealed to be the owner of Tokyo property worth $8 million and resort property worth $2 million, as well as other land that would be worth more than $50 million if released from government restrictions on its sale. (Although most of Tanaka’s companies originated in his home prefecture in Niigata, the network was run from Tokyo by a faithful former secretary named “Mama” Aki Sato.)

“Front money” and “back money,” wrote Takashi Tachibana, the author of the lead exposé, are in every politician’s life. “Front money” consists of political contributions permitted by law and reported to the government. “Back money” is illegal money, but so carefully disguised that it not only escapes detection but flouts few laws, thanks to Japan’s loose regulations about conflicts of interest. In Tanaka’s case, by Tachibana’s reckoning, the “back money” channeled through the network could easily run to $250 million. Of this, $15 million had been used for intraparty payoffs to secure Tanaka the LDP presidency, and the premiership that went with it, in 1972.

For a week after Tachibana’s article appeared there was little comment from the rest of the Japanese press, although Bungei Shunju, with a circulation of about 600,000, sold out on the stands. While the Japanese daily press takes a leftist political stance and habitually snipes at the government, the papers shun exposé journalism. The kisha kurabu (reporters’ clubs), made up of those who cover the prime minister’s office and other ministries, display the kind of consensus loyalty to their news sources which would arouse the envy of any White House press secretary. Tanaka exploited this situation with skill. He had always been good for quotable news; there was even talk of his largesse having found its way into reporters’ hands. (Several prime pieces of government real estate, at that, had recently been sold at an attractive price to one big newspaper.)

With Japan’s huge dailies strangely silent, it was left for the foreign press to pursue the story. Newsweek’s Bernard Krisher had it first, followed by other American and European journals. This forced the kisha kurabu reporters and their editors back to the path of duty. The newspapers printed more revelations and more denials. Opposition Diet members started asking questions; Tanaka’s intra-party opponents raised a commotion. Tanaka promised a full explanation, but he never gave one. Instead, barely two weeks after the Bungei Shunju story appeared, he resigned. Both the LDP and the press expressed general satisfaction when he promised to adjust his income tax returns to account for some of the additional “back money” that had been exposed.

At this time the LDP faction leaders asked Takeo Miki, an old-time legislator who called himself “a child of the Diet,” to take over the party presidency and with it the premiership. The circumstances strikingly recalled Gerald Ford’s succession to the presidency. Miki was the only LDP leader sufficiently independent and incorruptible to qualify as a “Mr. Clean.” After his investiture as prime minister on December 6, 1974, Miki set out on his own to clean up the “money connection” mess. He received little help from his peers in the party; on the contrary, now that Tanaka had done the honorable thing by resigning, the veteran practitioners of money politics set out to do business again.

National shame

Then came disaster from an unexpected quarter. In the United States, witnesses before the Church subcommittee on multinational corporations testified that Lockheed had spent more than $10 million over the past twenty years in payoffs to Japanese politicians and businessmen. The revelations came as part of a general confessional session which included disclosures of bribes given to similarly highly placed people in Europe, and in the American press, the peculations of Prince Bernhard of the Netherlands grabbed the headlines. In Japan, however, where the public was still angry over the Tanaka scandal, Lockheed went on page one and stayed there. When exposure of Japanese on the take became international it not only made headlines but produced a real sense of national shame.

The bare facts of the Lockheed scandal were simple enough: payoffs and kickbacks to influential Japanese for the sale of the TriStar airbus to All Japan Airways and the new Lockheed patrol plane to the Self Defense Forces. But the sophisticated “back money” experts in Tokyo must have been depressed by the ham-handed way in which Lockheed passed out its money. The threads of intrigue were easily traced to Tanaka and his friends. Nor had Lockheed’s informal spending been much of a secret. An American in the military hardware business recalls being summoned to the Sanno Hotel in Tokyo (the last such establishment still run by the U.S. military) to hear a Lockheed vice president inform him, between swipes at a slot machine in the bar, that a deal had been made with the Japanese government about a particular aircraft, so his company’s add-ons were no longer needed.

The problem for the Japanese prosecutors, and for Prime Minister Miki, was how to get from Washington the relevant names and numbers for investigation. In Japan, the press, public, and opposition were clamoring for facts. But because disclosure would embarrass a friendly government, the U.S. State Department stepped in to support Lockheed’s recourse to the courts to prevent disclosure, thereby delaying for months the transmittal of actionable information to Japan. (Echoes of the “Nixon shock” and Henry Kissinger’s unilateral approach to China: once more the Japanese—in this case Miki — learned that with Henry Kissinger as a friend, they needed no enemies.)

After a succession of demands from Tokyo, Diet resolutions, visits of Japanese prosecutors to the United States, and an ill-planned public Diet investigation that only faintly echoed the Watergate hearings, some information was finally spooned out to the Japanese. American witnesses were guaranteed immunity, but the prosecutors in Tokyo acted quickly against the Japanese Lockheed participants. Tanaka was indicted, arrested, and put in a jail cell for days of questioning—rougher treatment by far than the Americans had given Richard Nixon.

There were several channels through which Lockheed paid out its bribes: Yoshio Kodama, the old-time kuromaku; Tanaka’s friend Kenji Osano; Marubeni-Iida, the large and respected trading company which was Lockheed’s agent in Japan; and various executives of All Japan Airways. Even after a year of investigations, arrests, and indictments, much remains to be uncovered. But the international character of the scandal, the crude and easily traceable way in which Lockheed threw its money around, and the public exposure in the United States finally lifted the lid on the “back money” politics that had almost become a Japanese way of life.

Writing recently in Bungei Shunju, Tachibana, who qualifies as Japan’s Woodward-Bernstein, clarified the problem: “The Lockheed incident is not just another ‘made-in-America’ development. It has shown itself to be merely the extension of a problem peculiar to Japan. . . . What distinguished Lockheed from other incidents and scandals of the postwar period is the fact that it was exposed and played out in full public view.” Like bumbling foreigners barging into a teahouse with their shoes on, the Lockheed people scattered their million-yen bribes with little regard for the niceties usually observed in such circumstances, and this time there was no friendly kisha kurabu to modulate the effect of the Church subcommittee’s disclosures.

Japanese prosecutors are extraordinarily cautious. They indict only after they are convinced that the chances for conviction are something like 75 to 1, and in the past they have been particularly chary of cases involving highranking politicians. The last time a prosecutor tried to bring top party bosses to trial was in the shipbuilding subsidies case of 1954, and he failed. Since then there have been corruption scandals and there have been prosecutions, but in general only a few smallfry Diet members have been brought to justice; neither the major offenders nor the system was called into question. Now, armed with the irrefutable evidence of Lockheed and encouraged by a public in full cry, the prosecutors can at least contemplate some political housecleaning. Tanaka’s trial will not be the last.

Imbalance

Tanaka himself is not the real issue, any more than Lockheed is. As Tachibana and other thoughtful Japanese have commented, the TanakaLockheed affair has revealed an imbalance in the governing mechanism of Japan. In the United States, Watergate showed the danger of an executive branch grown disproportionately powerful, under the control of people who had no scruples about the use of power. The problem in Japan’s parliamentary system has been not the executive, but the ruling party. The Liberal Democrats, untroubled by a healthy opposition, developed a dangerous symbiosis with an overconfident business elite. Party bosses, rather than prime ministers, ran the country. For two decades backroom power-brokering has been a formal way of government and ethics at the top have grown lax.

Legal restraints have been lax, too. Although strict laws condemn votebuying and similar corruption in the Diet itself, there is nothing illegal about buying votes in intra-party elections, as Tanaka did. The fact that the majority party’s elected president automatically becomes prime minister is the central defect in this system—at least as long as party matters remain completely unpoliced.

The December 1976 elections reflected a long-gathering public discontent. The public’s verdict against the LDP was not ideological, by any means. The Socialists gained only slightly; the Communists’ strength was cut almost in half (thanks partially to an expose by the ever-vigilant Tachibana of some extralegal activities of Party Secretary Kenji Miyamoto many years ago). Gains were made by an anti-establishment offshoot of the Liberal Democratic Party (led, ironically, by Yohei Kono, whose father was once one of Kodama’s principal associates) and the Buddhist-oriented Komeito (“Clean Government Party”). The Japanese voter is not against either the parliamentary system or the democratic process, but he does want both cleaned up.

Former Premier Miki, who supported the prosecutors of Tanaka, was at first the beneficiary of the scandal, but soon became its second major political victim, when he resigned under fire in December 1976. The party’s faction leaders had wanted him out almost as soon as they grudgingly let him take over the premiership. He managed to stay in for two years by going over the heads of the party, appealing to the people through TV and the press—a novel practice in Japanese politics. Takeo Fukuda and the other faction leaders finally forced him out, in the process publicly splitting the Liberal Democrats on the eve of the December 1976 election.

Fukuda, who is at last premier after a lifetime of ambition, has his work cut out for him as an economics specialist. The secondary result of Japan’s Watergate is an economy that has never quite recovered, despite a recent successful export drive (which raises more questions, especially in Europe, about Japan’s sense of international responsibility). Although it shows signs of slipping into prosperity again, Japan continues to limp along, not quite reaching that point where both economists and housewives at the local market can breathe more easily.

Justice has not been completely carried out, either. Osano is standing trial now; but it has been difficult to prosecute Kodama, who came under a doctor’s care shortly after the Lockheed investigation began. In the December election the Liberal Democrats lost only sixteen seats, although their percentage of the total vote dropped to a record low of 42. Tanaka’s own constituents in Niigata, still feeling well cared for after years of new highways, fancy development projects, and other attentions from the central government, voted him back into the Diet with one of the largest single-district majorities in the country. This makes Tanaka, as a prominent Japan-watcher recently commented, something like the James Michael Curley of Japanese politics.

Superficially, Tanaka seems as buoyant as ever. The contagious grin, the candid-sounding speech and informal manner, still appeal. He still protests his innocence. Talking with him in a friendly group it is easy to forget for a moment the miasma of dirty deals, influence peddling, and “back money” that surrounds him. But the Japanese people will not forget it for a long time. His trial and the trials of the others will take many months; in the process the circle of those connected with the scandal can only widen.

-FRANK GIBNEY