Tokyo Underworld

by Robert Whiting

  Soon, the Iraqi found himself in need of 30 million yen to pay his staff, make bank payments, and meet other obligations. Confident that a payment would soon be coming from an associate in the Middle East, he went, through an intermediary, to a Tokyo loan shark, a young Korean man who drove a fancy sports car and who offered to loan the Iraqi the 30 million yen for thirty days if the restaurant was put up as security.

  The Iraqi agreed and signed the necessary documents, and the loan shark brought out a suitcase of money, putting 30 stacks of 100 crisp new 10,000-yen notes on the table, neatly lined up. He promptly took out 13 million yen as his ‘commission’. Then handed over another 3 million yen to the intermediary as his commission. That left the Iraqi with 24 million, and the ink on the loan document hadn’t even dried yet.

  The Iraqi restaurateur paid his bills, and at the end of the thirty days, the 30 million being late arriving from the Middle East, found himself physically barred from his restaurant by several yakuza, under the direction of the moneylender, who became the new owner.

  There is a veritable mountain of published data in Japanese and English on Kanemaru and the illegal contributions he received. The March 9, 1995, edition of the Asahi Shimbun contains an excellent full-page graph of how the illicit funds were distributed.

  The Political Spectrum column of the Asahi Evening News, August 15, 1991, and the Kyodo News Report ‘Black Current’ contain good summaries of the activities of gang boss Susumu Ishii, the brokerage houses and the LDP.

  The open court testimony by the Inagawa-kai associate in regard to the relationship between the Liberal Democratic Party and the yakuza was reported in ‘Black Current’.

  The Far Eastern Economic Review cover story of November 21, 1991, quoted Jiro Ode, president of a finance company in Osaka with extensive contacts in the underworld, who said, ‘the Yakuza are part of the LDP. It is a relationship of mutual help, friendship, cooperation, and support. There are no straight lines, nothing dividing them. Everyone is gray.’

  Shin Kanemaru, in announcing his resignation as vice-premier on August 27, 1992, admitted that he received 500 million yen in illicit contributions from Sagawa Kyubin. This stunning admission was reported on page 1 of the Asahi Shimbun, morning edition, August 28, 1992, and in every other Japanese daily.

  On November 27, 1992, Kanemaru testified under oath to legislators from a hospital bed that Susumu Ishii, the head of the Inagawa-kai gang syndicate, had indeed helped stop a rightist group from harassing former Prime Minister Noboru Takeshita in 1987, when Takeshita was running for the LDP presidency. This admission was also splashed across the front pages of all of the Japanese dailies the next morning.

  The head of Tokyo Sagawa Kyubin, Hiroyasu Watanabe, had earlier testified in a pretrial deposition that Kanemaru had sought his help to stop the rightist group from harassing Takeshita, fearing the smear campaign would hurt Takeshita’s bid for the LDP presidency, and that he in turn had sought the help of Inagawa-chief Ishii. See ‘Kanemaru’s Reliance on Gangs Comes Out’, Asahi Evening News, September 24, 1992, p. 4.

  Kanemaru was arrested on March 6, 1996, and made a full confession in regard to illegal donations he had accepted, mostly from construction-related firms. His lengthy confession was excerpted in English in the July 28, 1993, edition of the Mainichi Shimbun, for those who may be interested.

  ‘Obituary, Shin Kanemaru’, Economist, April 6, 1996, p. 108, offered a concise but detailed history of his colorful career.

  A good overview of the machinations of Susumu Ishii, Sagawa Kyubin and the brokerage houses appeared in the October, November and December 1992 issues of Tokyo Insideline, an informed if somewhat irreverent monthly newsletter on Japanese politics, published and edited by Takao Toshikawa, which became part of The Oriental Economist in 1997. A summary of the ramping of the Tokyu stock appeared in the Asahi Evening News, August 24, 1991.

  For material on the Tokyu stock crash, the Nomura scandal, and the Sagawa–Kyubin scandal, the author relied on the very heavy reportage in the Japanese media of the scandal in the early 1990s, among them: ‘Beikoku nara, Okurasho Kambu Mo Kemusho Iki’ [‘If This Were America, the Head of the Finance Ministry Would Go to Prison Too’], Shukan Asahi, July 26, 1991; ‘Tabuchi Kaicho No Jinin de Sumu no Ka?’ [‘You Think This Will End with the Resignation of Chairman Tabuchi?’] and ‘Yakuza to Sejika Ni Kuwareta Ni-sen Oku Yen’ [‘2 Trillion Yen Eaten by the Politicians and the Yakuza’], both in Shukan Asahi, August 2, 1991. Also useful was an exclusive interview with Susumu Ishii, which appeared in an article entitled ‘Yakuza No Kigyo Ka Wa Koko Made Susundeiru’ [‘Gangster Business Has Come This Far’], in the Shukan Posuto, August 2, 1991, pp. 36–40, and ‘Nomura Shoken Kambu wa “Soba Soju” wo Mitomeita’ [‘The Management of Nomura Securities Admits Manipulating the Market’], Shukan Asahi, September 6, 1991.

  The aforementioned ‘Black Current’ article by Kyodo, April 2, 1992, was also informative, as was the article in the respected weekly Shukan Asahi, ‘Hachi Nin No Shisha Tachi No Sagawa Jiken’ [‘The 8 Deaths of the Sagawa Incident’], December 18, 1992, pp. 27–29, which describes, among other things, the suicide of Hiroshi Aoki, former chief secretary to former PM Noboru Takeshita, found hanging from a rope in his Tokyo apartment, with his wrists and ankles slashed for good measure, on April 26, 1989, the morning after Takeshita announced his resignation. (The resignation and the suicide followed the disclosure that Aoki had obtained 50 million yen from an employment firm called Recruit Cosmos in a shares-for-favors scandal in 1989. However, it was widely rumored that there were other factors that had driven Aoki to kill himself, and the authorities regarded his death as an impediment to the Sagawa investigation.) The article also discusses the demise of Yasutoshi Kuwabara, chief secretary to Takeshita in his home province of Shimane, who also hanged himself in June 1991. Kuwabara thus became the twenty-fifth political aide to have committed suicide to atone for or cover up scandal in the postwar era. In addition, there was the former Diet member connected to the case who died unexpectedly from ‘water on his lungs’ in 1991, while resting in a Tokyo hospital to ‘stay away from the media’.

  Takeshita was the fourth postwar prime minister to resign because of scandals. His successor lasted three months before being ousted in a sex scandal and was followed by two more prime ministers in the next four years.

  The sequence of events describing West Tsusho, its activities in the United States, its relationship with Prescott Bush, and the revelation the company was a gang front were made in documents obtained from the US Securities and Exchange Commission by the Japanese Kyodo News Service and published on June 8, 1991, in the Asahi Shimbun, Nikkan Sports, Nihon Keizai Shimbun, Asahi Evening News, and Japan Times of the same day.

  The author also relied on ‘Web of Intrigue’, Far Eastern Economic Review, March 19, 1992; Robert I. McCartney, ‘The President’s Brother Is Sued’, Washington Post Service, June 17, 1992; and the follow-up story, ‘Sagawa Tied to Yakuza over Golf Course in New York’, Mainichi Daily News, February 18, 1992.

  CRAZY WONG AND THE GOLD SCAM

  The gold scam story was related by Nick Zappetti, longtime Tokyo jeweler Ome Asakura, better known as ‘Crazy Wong’, and Yutaka Mogami, who translated some court documents in relation to Wong’s suit. Franco and Roberto have fled to parts unknown.

  The first quote by the Akasaka boss was confirmed by Nomura and Zappetti’s wife Yae.

  There are minor discrepancies in the respective accounts. Wong says he may have had a receipt for $40,000, as described by Zappetti, but that he can’t remember for sure. He did say that he had obtained a receipt for the entire amount, however, which he procured some days after his purchase of the fake gold, something which Zappetti did not mention. Zappetti said that he thought Crazy Wong, being the professional that he was, had been able to tell whether the rest of the gold was real or not. Wong said he only went along with the deal without unwrapping every piece because he had trusted Nick – his ‘friend’ of thirty year
s.

  Crazy Wong was convinced that Zappetti set him up because Zappetti’s business was starting to fail and he needed the money.

  ‘If Nick was really a victim,’ said Wong, ‘then he should have apologized to me. The incident was his responsibility. But he never did. When I went to talk to his wife, Yae, about the matter, she said it wasn’t any of her concern. She said, “Why don’t you sue my husband and send him to jail?”’

  Wong denied any ties to the Japanese underworld and said he was an honest jeweler. If gangsters sometimes came to his shop to buy and sell, he said he couldn’t help it. He also said he was not aware the gold Franco and Roberto had had been smuggled.

  After Zappetti died, in 1992, Wong tried unsuccessfully to pursue the suit with Zappetti’s widow. No one ever heard from Franco or Roberto again (or Zack). Zappetti put in a request to Interpol to track them down, but they were never found. Zappetti went to his grave trying to figure the scam out. Twice during the succeeding five years Wong was robbed by Chinese gangs infiltrating the city to the tune of several hundred thousand dollars’ worth of cash and merchandise.

  8. BLACK RIDER

  Material in this section came from interviews with Zappetti, Frank Nomura, Vince Iizumi, Yae Koizumi, Leron Lee, Barry Nemcoff, Yutaka Mogami, and Tokyo attorney Kozo Tanaka, who represented Zappetti in the Nihan Kotsu appeal, as chief counsel. It is Vince Iizumi’s conviction that his father would never have won the appeal, as was Tanaka’s. Said the lawyer, ‘Mr. Zappetti did not properly understand his situation. If I had not acted he would not have received any money. No other lawyer could have pulled that off. But still they criticized me. Neither he nor anyone in the family ever thanked me. It was only after he had recovered that he changed his mind and said he deserved more. Some of the things he says are bullshit.’

  Zappetti, of course, went to his grave believing just the opposite was true, that he had been denied his chance for legal victory and, like so many other gaijin, victimized by his adopted country.

  Zappetti complained about his sexual impotence to anyone who would listen. However, when a sympathetic listener, US Embassy official Barry Nemcoff, told him about a new prosthetic penile device on the market in the United States, Zappetti’s interest immediately turned to business. He wanted to find a way to import and market the devices in bulk in Japan for Japanese men, because, as he put it, they had such small genitalia they were bound to want to own the much larger US product.

  Zappetti showed the note from his attorney to the author. The nighttime visit to the lawyer’s office was related by Zappetti, with great relish.

  RIO BRAVO

  The ‘Lazy and illiterate’ remark was made by Yoshio Sakurauchi, the speaker of the Lower House of Parliament in Japan, in January 1992. His exact words were, ‘American workers want to get high salaries without working. They cannot take orders because 30 percent of them are illiterate.’

  Nakasone’s remark was, ‘The level of knowledge in the United States is lower than in Japan due to the considerable number of blacks, Puerto Ricans, and Mexicans.’ He made it in 1986. See Terry McCarthy, ‘Why Japanese Are Rude about Foreigners’, Independent, reprinted in Singapore Straits Times, January 31, 1992.

  A NOTE ABOUT JAPAN BASHING

  America’s neurosis in regard to Japan was tempered by a comparative lack of interest in its most important ally and a corresponding lack of knowledge that was at times stunning. In 1991, when asked by a touring Japanese news crew what ‘Japan bashing’ (perhaps the most widely understood English phrase in Japan after ‘okay’ and ‘sex’) meant, a Houston official replied, in all seriousness, that it was an activity whereby ‘Japanese walk down the street and hit other Japanese over the head with a pole’. Sometime earlier, a D.C. lawmaker quizzed a visitor from Tokyo University as to when North Japan and South Japan were going to reunite. A 1993 survey revealed that two out of every five Americans were unaware the United States even had a trade problem with Japan.

  A NOTE ABOUT FREE TRADE

  A clear-cut reflection of the differences between the concept of Japanese capitalism and American capitalism was the exercise in the early 1990s involving NTT, the giant semi-state-owned corporation, when it concluded the price of the pagers they were purchasing was out of line with the global norm and as a result they demanded the major pager manufacturers lower their prices by nearly 50 percent. Only Motorola, the lone foreign maker in the group, was able to comply with such a dramatic drop. Within a month, however, Motorola was asked to raise its unit price back up to correspond with what the Japanese makers could meet. In the United States, the business most likely would have all shifted to the cheapest supplier. (From an interview with Dr Robert M. Orr.)

  Another reason son Vince did not want to remain in his father’s business was a conflict over strategy. Vince’s main complaint was about his father’s and Yae’s insistence on keeping the Roppongi branch going, purely out of ‘pride’. ‘They should have sold the Roppongi place and gone with Yokota, which was raking in the money,’ he said, ‘but they didn’t want to give up the prestige of having a place in Roppongi.’

  The psychiatrist Shu Kishida was the author of Monogusa Seishin Bunseki (Tokyo Seishi, 1978). (His philosophy made an interesting contrast to that of another Japanese psychiatrist, Misao Miyamoto, trained and educated in the States, who said Japan was suffering from a neurosis he called ‘narcissistic infantilism’.)

  The comment in regard to Rising Sun, by Michael Crichton, was made by Bungei Shunju editor Hidesuke Matsuo. The Japan expert was Kent Calder.

  Zappetti related all the details of domestic strife with his wife Yae Koizumi in an interview with me – and indeed to anyone else who would listen. She, however, did not want to submit to a formal interview on the subject. Still, I, along with many others, witnessed them arguing many times in the restaurant. The headwaiter’s remark about their relationship was, ‘They love each other … but they also hate each other.’ The estimate of Yae’s wealth was made by Zappetti. I personally witnessed the battle of the lights and music.

  A New Jersey-based sister-in-law of Zappetti’s who saw the couple together said she was impressed at Yae’s devotion. ‘The beauty queen seemed to be more interested in Nick’s money,’ Mary Zappetti recalled in a 1998 interview, ‘but Yae, she really cared for Nick. I could tell.’

  The ‘transistor salesman’ remark was originally made by then French President Charles de Gaulle, when then Japanese Prime Minister Hayato Ikeda visited France. Said de Gaulle, ‘I expected a statesman and I got a transistor salesman.’ Others quickly picked up on it.

  President Reagan was invited to Japan by the Fuji-Sankei communications group. (Said Zappetti, ‘It was his reward for letting the Japanese win at trade.’)

  For material on Trump and Yokoi, see ‘Trump’s Tower’, Vanity Fair, May 1995.

  Zappetti also wrote a letter to American financial operator T. Boone Pickens, offering his help in ‘any way possible’. In the late 1980s, T. Boone Pickens had bought a ‘controlling interest’ of 26 percent in Koito Manufacturing Company, a parts supplier for the automotive giant Toyota Motors, and found he could not even get himself appointed to the board, so entrenched was the almost feudal system of subcontractors and suppliers. (Toyota, which owned 19 percent of Koito’s stock but was Koito’s largest customer, held three board seats.) Pickens complained loud and long about Japanese monopolistic practices, but government officials were totally indifferent. Toyota was a corporate community, they said, not a toy for leveraged buyout artists from abroad. Pickens did not respond to Zappetti’s missive. Eventually he gave up and sold his shares.

  THE FALL

  The stock compensation scandals were widely reported during the early 1990s. Interestingly enough, the minister of finance at the time was Ryutaro Hashimoto, who, having vowed to clean house, then proceeded to preside over a series of other financial scandals as prime minister throughout the rest of the decade, before being forced to resign in 1990.

  Th
e material about Susumu Ishii is from the interview in Shukan Posuto, August 2, 1991, pp. 36–40.

  For material on the Tokyo stock crash, the Nomura scandal, and the fallout from the Sagawa-Kyubin, the author relied on the newspaper accounts and other reports in the Japanese media during the scandals in the early 1990s, among them the interview with Shin Kanemaru, Shukan Asahi, May 31, 1991, pp. 20–24; ‘Beikoku nara, Okurasho Kambu Mo Kemusho Iki’ [‘If This Were America, the Head of the Finance Ministry Would Go to Prison Too’], Shukan Asahi, July 26, 1991; ‘Tabuchi Kaicho No Jinin de Sumu no Ka?’ [‘You Think This Will End with the Resignation of Chairman Tabuchi?’] and ‘Yakuza to Sejika Ni Kuwareta Nisen Oku Yen’ [‘2 Trillion Yen Eaten by the Politicians and the Yakuza’], both in Shukan Asahi, August 2, 1991. Also referenced were the interview with Susumu Ishii in Shukan Posuto, August 2, 1991; ‘Nomura Shoken Kambu was “Soba Soju” wo Mitomeita’ [‘The Management of Nomura Securities Admits Manipulating the Market’], Shukan Asahi, September 6, 1991; ‘Black Current’; and ‘8 Nin No Shisha Tachi No Sagawa Jiken’ [‘The 8 Deaths of the Sagawa Incident’], Shukan Asahi, December 18, 1992, pp. 27–29.

  The Inagawa family insolvency was reported in ‘Late Inagawa-kai Boss Left Billions in Debts: Family’, Asahi Evening News, June 5, 1992.

  Senator Hollings’s callous, xenophobic remarks were the subject of an acerbic editorial, in the ‘Hollings’ Stupid Remarks,’ Mainichi Daily News, March 7, 1992. The remarks were made by Ernest Hollings, a senator from South Carolina, on March 2, 1992, at a speech at a factory in his home state. Hollings later issued a statement denying he was engaging in Japan bashing, explaining that the mushroom reference was intended as a joke. Hollings exact quote was, ‘You could draw a mushroom cloud and put beneath it, “made in America by lazy and illiterate Americans and tested in Japan.”’ Hollings’s remarks were in response to the widely quoted remarks made earlier by House of Representatives Speaker Yoshio Sakurauchi, in January 1992, to the effect that American workers were lazy and illiterate.