Yakuza clean up to do dirty work

Many ditching the tough guy persona in favor of tailored suits

by Hiroshi Hiyama

AFP-JIJI

Mobsters driving flashy cars purchased with bank loans. Executives bowing in apology for loaning millions to those underworld figures. And high-level officials vowing to squash the yakuza.

Japan Inc. is engulfed in its worst mob scandal in years and it’s shining a rare light on the links between big business and shadowy organized crime groups usually known for low-brow ventures like extortion and loan-sharking.

But with membership falling as police ratchet up a crackdown, experts say the yakuza are branching far outside their traditional business into everything from insider trading to funding business startups.

“Insider trading has become huge — you can make much more money manipulating stocks” than extorting businesses, says Jake Adelstein, a crime writer whose best-selling memoir “Tokyo Vice” is set to become a Hollywood movie.

Adelstein, a former reporter for the Yomiuri Shimbun, likens the Yamaguchi-gumi, Japan’s biggest organized crime group, to “Goldman Sachs with guns.”

Many mobsters — forever associated with full-body tattoos and lopped-off pinky fingers — have ditched the tough guy persona in favor of tailored suits and a clean-cut look that could pass in any boardroom, Adelstein said.

“They’re savvy investors,” he said. “They like to gamble.”

The yakuza occupy a gray area in Japan’s usually law-abiding society.

They are both feared and loathed as social outcasts, while they’re revered in equal measure through film, fanzines and manga.

Like the Italian Mafia or Chinese triads, the yakuza engage in activities ranging from gambling, drugs and prostitution to loan-sharking, protection rackets and other illegal ventures often run through front companies.

But unlike their foreign counterparts, yakuza are legal groups with offices in major cities, and they have historically been tolerated by authorities, although there are periodic clampdowns on some of their less savory activities.

In fact, the Yamaguchi-gumi helped dole out food after the Kobe quake in 1995.

But Tokyo is now under intense pressure from abroad to clamp down on yakuza and their money-laundering, as the U.S. Treasury Department works to freeze the overseas assets of top Japanese crime groups that it says make “billions of dollars annually in illicit proceeds.”

The crackdown at home has intensified after Mizuho Bank said in September that it had loaned money to organized crime members, an admission subsequently repeated by at least four other major lenders, including the nation’s biggest bank, Mitsubishi UFJ Financial Group.

Sometimes loans were legitimately used by gangsters to buy foreign sports cars or other expensive items, while in other cases the vehicle was quickly sold on the black market with the loan never paid back.

The scandal at Mizuho worsened after it initially said top executives knew nothing about the loans, only to backtrack on that claim as a company-commissioned report blasted its laissez-faire compliance.

Mizuho later said more than 50 executives would be punished with its chief executive forgoing pay for six months.

But the latest admissions are not a first for the country’s banks, a big source of concern among police wary of sharing details of investigations with mob-linked firms, experts say.

“It is baffling that Mizuho board members failed to act,” said Toshihiko Kubo, a professor of financial law at Ritsumeikan University.

“Once they learned that loan recipients were related to the mob, they should have taken immediate action.”

Major lenders are routinely approached by those with links to organized crime looking to raise money, said an anti-yakuza campaigner in Tokyo, echoing calls from Finance Minister Taro Aso, among others, to tighten banking rules.

“Crime syndicates . . . are out to make money, and they’ll use whatever means available,” said the campaigner, who asked not to be identified.

“Many companies are trying not to deal with organized crime . . . but it’s difficult to filter everything because their methods are also becoming sophisticated.”

Earlier this year, the Japan Securities Dealers Association launched a database to help keep those with mob links out of the country’s now-sizzling stock market.

The pressure on Japan to clean up the problem is set to intensify as Tokyo gets ready to host the 2020 Olympics.

On paper, the police crackdown appears headed in the right direction with yakuza membership down by about 28 percent to 63,000 in 2012 from a decade ago, according to police data.

Still, yakuza links run deep and some credit their tough presence for keeping street crime low.

Their place is so deeply rooted that senior politicians are sometimes found to have ties with the yakuza, including former Justice Minister Keishu Tanaka, who resigned last year following reports of his association with mobsters.

“There are lots of politicians that, in some sense, owe their positions to yakuza support back in the old days, so clearly their influence is not nonexistent,” Adelstein said.

“It’s still a bizarre system because Japan’s organized crime groups are legal entities,” he added. “They are regulated, but not banned.”

  • Mike Wyckoff

    Organized crime groups are legal entities….that just speaks volumes as to how bad the loopholes are in Japan