The report that as many as 59 leading Japanese companies were victims of extortion by “sokaiya” corporate racketeers, so-called rightist groups, organized gang members and other criminals in 1998 was treated as a major revelation by the mass media. The news came as the result of a survey conducted early this year by an organization affiliated with the National Police Agency, which sent a 53-page questionnaire to 3,191 large firms nationwide. That means more than 44 percent of the companies responding indicated they still find it difficult, if not impossible, to break their long-standing habit of paying off these criminal elements.

NPA officials were quick to express “shock” and dismay at the survey results, but their reaction strikes some observers as disingenuous. The real surprise may be that as many as 2,326 companies, or nearly 73 percent of those to which the detailed survey was sent, responded with answers the NPA considers valid. Eyebrows were raised in many quarters, for example, by the indications that fully 85 percent of the companies that reported being victimized by professional extortionists claim to have paid them less than 1 million yen. Indeed, 77 of the companies that said they had been approached for such payments did not think any crime was involved.

The two firms that paid out more than 100 million yen and the one victimized to the tune of 1 billion yen are not likely to have been so sanguine. Some company executives are asking if the police are still not going too easy on the extortionists. Others complain that the current Antiorganized Gang Law is not up to the job. A small number of companies said they actually fear for the safety of their employees. Yet 296 of the companies that reported being approached for money failed to report the incidents to the police.

If NPA officials were so startled by the outcome of the survey, it may be partly because they were lulled into a false sense of optimism by the amendments to the Commercial Code in the early 1980s that were intended to control the extortionists. At that time, an estimated 1,700 sokaiya racketeers (sometimes known as “professional shareholders”) preyed on first-rank companies by promising “protection” from disruptions at annual shareholder meetings. They could do by this by owning a small number of company shares and holding the threat of their own disturbances over corporate executives’ heads if their financial demands were not met.

Their number is now said to have fallen by nearly two-thirds to an estimated 600. That is an ample number for the NPA to be aware of the danger they continue to pose. In recent years, many large companies adopted the strategy of holding their shareholders’ meetings on the same day, so that the racketeers could not possibly attend a single meeting in large numbers. The move has had only limited success, however, as proved by revelations early this year that part of the revenues Japan Airlines failed to declare in the five-year period ending in March 1998 went to pay sokaiya racketeers.

The NPA surely was fully aware of the involvement of the nation’s four leading securities firms, Nomura, Daiwa, Nikko and the defunct Yamaichi, in large payoffs to convicted corporate racketeer Ryuichi Koike in 1994-95 and of the exorbitant loans arranged for him by Dai-Ichi Kangyo Bank around the same time. Last year also saw reports of racketeer payments by Mitsubishi Motors Corp. and Toshiba Corp. If such top-drawer companies still find it impossible to resist the blatant extortion, sometimes in the form of “subscriptions” to unneeded and unwanted publications, it is less surprising that smaller firms fall victims to the plague.

Police officials responded to the latest revelations — “if the findings are true” one official put it — with promises to strengthen their crackdown on the corporate racketeers. It seems likely that the survey results are not only “true” but the tip of the intimidation iceberg. Indeed, 87 percent of the responding companies asked for increased police control efforts and 69 percent sought guidance on how best to deal with the situation.

A strengthened police crackdown on the extortionists certainly is called for, including surveillance of known suspects before money actually changes hands. While half of the companies responding to the survey said they had taken special steps to deal with the rampant intimidation, 18 percent have no countermeasures whatever in place. Until that situation improves and corporate executives find the will to say no, the extortionists will continue to win the battle.

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