Taking Care Of Business
Japan's Organized Crime
By Velisarios Kattoulas
Tokyo, Osaka and Kobe
Far East Economic Review
Issue cover-dated November 30, 2000These have been tough years for the yakuza, but one gang has beaten off recession and tougher anticrime laws to strengthen its grip on both Japan's old and new economies
IN AN INCIDENT that is rapidly acquiring the status of legend in the Japanese underworld, a gangster walks into a porn shop in Tokyo in August 1999 and asks who gets paid for "protection." The manager places a business card emblazoned with the mark of another gang on the counter. The thug burns a hole through the card with his cigarette, and puts his own card on top of it. Your protection agency just changed, he tells the manager. I'll drop by to pick up your dues later, he adds.
The gangster came from the Kobe-based Yamaguchi Gumi, and slowly, but steadily, he and his comrades have been muscling in on rival territory, creating a force that now dominates organized crime in Japan. "The Yamaguchi Gumi talks about maintaining peace between gangs and abiding by the principles of kyozon kyoei," or coexistence and coprosperity, says a major Tokyo underworld figure. "But once you give it a small slice of the action suddenly it's taken it all."
To listen to Japanese police, the launch of an unprecedented crackdown on organized crime a decade ago sent the yakuza into retreat. Several rising stars have been jailed. Hundreds of two-bit gangs have disbanded. Mob killings have fallen by half (to 25 last year), and thousands of yakuza have sought police protection to become katagi no shu--in yakuza parlance, everyday people.
As far as it goes, the police's overview of the Japanese underworld is hard to fault. They might add that in the 1990s literally dozens of indebted small-time mob bosses committed suicide. Examined carefully, though, the police portrait misses as much as it reveals, because in the midst of the chaos and penury triggered by a slate of recent anti-yakuza laws--not to mention a 10-year recession--one gang has become a veritable colossus: the Yamaguchi Gumi.
To be sure, the gang has faced its share of setbacks, including the jailing of two top under-bosses, and the assassination of a third. All the same, under the leadership of Yoshinori Watanabe it has grown into one of the world's most powerful criminal enterprises.
According to police statistics, it boasted 16,500 full-time members in 1999, up a third since Watanabe took over 12 years ago, and more than five times the size of the entire American Mafia at its peak in the 1950s. All told, as many as 38,000 gangsters--or nearly one in two professional Japanese criminals--report to Watanabe. Little wonder they call him the Japanese Godfather.
Perhaps predictably, the Yamaguchi Gumi is a major player in the underworld's Big Two: sex and drugs. According to Atsushi Mizoguchi, an author and authority on the underworld, Japan's 80,000 yakuza together earn around ¥1 trillion ($9.3 billion) a year, half of it from drugs, and about a quarter of it from the sex trade. Arguably a bigger problem for Japan, though, is that the Yamaguchi Gumi has squirrelled its way into the New Economy, and has political connections reaching into the highest echelons of government.
First, its political ties. Despite the police crackdown, during July's Lower House election, the Yamaguchi Gumi discreetly helped raise money and get out the vote for scores of politicians. Says one beneficiary of mob largesse: "There isn't a single Japanese politician who doesn't know his local yakuza boss."
Exactly what such relationships yield is unclear. But they suggest that short of taking on Watanabe's political allies, the police stand little chance of bringing him to his knees. Equally unnerving, in a recent issue of Shukan Taishu, a magazine closely read by police and yakuza alike, an unnamed Yamaguchi Gumi under-boss warned that if the police ever threatened the gang in earnest it would not hesitate to retaliate.
What's more, in mob-riddled industries such as construction and finance, much-needed reform and restructuring has been sidetracked for decades. Even so, many Japanese were shocked when a government-funded study conducted last year found that of 116 uncollected, mainly construction-related loans examined in detail a chilling 42% involved organized crime.
As for Watanabe's role in the New Economy, with recent antigang laws and the recession denting income from "traditional" sources, police suspect he has channelled some of the fortune his gang amassed during Japan's "bubble economy" in the 1980s into hi-tech start-ups, hoping that--slumping share prices aside--they might one day become a lucrative source of wealth.
Hard evidence of mob involvement in such companies remains scarce. But last month the president of software developer Liquid Audio Japan, Masafumi Okanda, was arrested on suspicion of kidnapping a former colleague amid allegations he was tied to the yakuza. Although the 32-year-old Okanda denies the charges, police say they found the business cards of several senior yakuza bosses on his desk. Notes a veteran member of the Tokyo organized-crime squad: "Yakuza are bishoku, they like to eat well. Always, they go for the juiciest cut, the piece with the most fat on it, and right now that's hi-tech start-ups."
For Japan, the implications of this are not pretty. On top of delays in tackling the Old Economy's woes, doubts about the prospects for hi-tech start-ups could stall the creation of new jobs, and, by extension, the shift to a post-industrial economy.
"Ties between corporate Japan and the Japanese underworld are so extensive it's impossible to even get a grip on where and how they're joined together," explains Raisuke Miyawaki, a former head of the organized-crime division at the National Police Agency and now an adviser to company's seeking to cut ties to the yakuza. "For Japan to solve its long-term economic problems, the only option is to purge the men at the helm of companies sullied by ties to the yakuza, and start afresh."
NOT IN 25 YEARS has there been a yakuza boss as powerful as Watanabe. A bull of a man with a short crew cut and piercing eyes, he was born in 1941 into a large farming family in Tochigi prefecture, north of Tokyo. After finishing middle school, he made noodles in Tokyo for a couple of years before moving to Kobe to join the Yamaken Gumi, a gang that is part of the Yamaguchi Gumi.
It was around 1960, and the Yamaguchi Gumi was embroiled in a series of deadly turf wars. According to underworld folklore, Watanabe proved lethally efficient in resolving disputes, and in recognition of his talent and hard work he rose rapidly through the ranks.
By the time Watanabe became the Yamaguchi Gumi's fifth kumicho--the top boss--in 1988, Japan's biggest gang was in disarray. Between 1981 and 1983 it lost its third kumicho to a heart attack, his anointed successor to liver failure, and his eventual successor to assassins. It split into two rival factions and was dragged into a bloody war that sparked 200 gun battles and cost 26 lives. Many people wrote it off as a has-been.
At first, Watanabe did little to revive the Yamaguchi Gumi. But police officers, lawyers, gangsters and other underworld figures familiar with events say that starting in the early 1990s he radically overhauled the organization. He abandoned the centralized power structure, and split it into seven semi-autonomous regional groups, making it harder for police to keep tabs on, and easier to control internal and external friction. He forged new alliances and cemented existing ones with rival gangs nationwide, and he rekindled an earlier leader's dream of making the gang a nationwide power. When Watanabe swept to power, the gang had offices in 39 of Japan's 47 prefectures. Today, that's up to 43.
At the same time, Watanabe added 5,000 full-time men to the gang. "Joining it is like taking out insurance," says Yukio Yamanouchi, a former legal adviser to Watanabe. "It's like working for Sony. You're part of the leader in your field."
WHILE THE WORD "YAKUZA" is slang for "loser," and is thought to come from the worst score in a Japanese card game, many yakuza think of themselves as the descendants of chivalrous bands of townsmen who fought off gangs of murderous samurai during the Tokugawa Shogunate. In fact, their true ancestors are roaming peddlers and gamblers who appeared in Japan in the 18th century, and later banded together into "families," for protection, and to carve up the spoils.
Since the early 20th century, the yakuza have repeatedly colluded and collided with mainstream Japan. Before and during World War II they formed the core of the paramilitary armies maintained by most political parties. In the war's aftermath, they went to work for the U.S. Occupation, harassing suspected communists. Later, the yakuza re-established ties with their pre-war allies. In 1960, for instance, the Liberal Democratic Party enlisted some 28,000 yakuza to provide security for a planned visit by U.S. President Dwight Eisenhower that was eventually abandoned. And since the 1970s many yakuza have made fortunes alternately blackmailing companies over the sordid personal lives of their senior management, and working behind the scenes to "smooth" problematic negotiations.
Yet despite their ability to adapt to shifting circumstances, in three crucial ways yakuza gangs remain distinctly feudal: to join, new members must exchange sake cups with their oyabun, or boss-parent, and offer unquestioning allegiance; to illustrate their strength, they must sit for agonizing tattoos; and to illustrate remorse, they must perform yubitsume, slicing off a numbed fingertip.
The charms of such traditions notwithstanding, in 1991 parliament passed a hard-hitting antigang law designed to drive the yakuza into the ground. The immediate pretext was the bloody mob wars of the 1980s and pressure from the U.S., which saw heavy yakuza involvement in the construction industry, in particular, as effectively excluding American companies from lucrative public-works contracts. Sceptics also suggested that the police, faced by the the demise of leftist extremists and the end of the Cold War, needed to find a new foe, or take a budget haircut.
In any event, under a host of laws passed in the 1990s, the police can now shut suspected yakuza offices for up to six months, issue restraining orders almost at will, and, from this year, tap phones. The police are still getting to grips with their new powers. But last year for the first time they shut several yakuza offices, including one belonging to the Yamaguchi Gumi after the gang executed the top under-boss of a Tokyo rival and triggered a mob war. Police also issued more than 2,000 restraining orders, a record.
BY ALL ACCOUNTS, Watanabe is bewildered by the police's determination to crush the Yamaguchi Gumi and arrest him. Although he lives in a palatial home in one of Kobe's old-money neighbourhoods, he is a simple man, say people who know him. He avoids rich food. He lifts weights. He jogs. He hikes in the Kobe hills. He has a single-digit golf handicap. He skis in winter, and jet-skis in summer. He is an avid student of Chinese history and Japanese law. He enjoys karaoke. (His repertoire includes a Japanese ballad set to the music from The Godfather.)
Those who know him say he sees himself first and foremost as an unorthodox public servant. To his mind, there will always be losers, people incapable of holding down regular jobs. Since the yakuza provides work for such people, and helps keep their aggression and frustrations in check, or at least directed mainly at one another, he thinks of it as a pragmatic solution to an intractable problem. He admits it may not be ideal. But he believes the yakuza is far better than the alternative--disorganized crime characterized by random attacks such as those that plague other developed nations. He may have a point. Since Japan launched its yakuza crackdown a decade ago, serious crime has soared by 70%, the arrest rate for such crimes has fallen to 70% from 90%, and the police have been plagued by a snowballing series of cover-ups and scandals.
"If a gang of young thugs turns up and starts causing trouble, the yakuza go out and sort them out because it's bad for business," says Ichiro Senda, a former mid-ranking Yamaguchi Gumi boss who once worked under Watanabe. "But if the yakuza are gone who'll there be to make sure punks don't terrorize ordinary people. The police? I wouldn't count on it."