Ben Hills

Right to the end the corrupt old curmudgeon was unrepentant. From the hospital bed where he was being interrogated, Shin Kanemaru fixed the members of the parliamentary committee with a baleful glare.

“Suppose your child is drowning, and is saved by someone who turns out to be a gangster,” he growled. “It is my philosophy to be grateful to him.”

Until his abrupt demise last September, Kanemaru was the most powerful man in Japanese politics, the 78-year-old godfather of the ruling Liberal Democratic Party, chief arm-twister for the hundreds of millions of dollars a year needed to maintain it in power.

No leader in any modern democracy wields raw authority like his. Kanemaru and his withered cronies created the last four Japanese prime ministers and destroyed three of them when they outlived their usefulness.

Now, for the first time, the Japanese are being given a tantalising glimpse of how they did it – a combination of the velvet glove of bribes beyond the dream of avarice, and the mailed fist of the Japanese Mafia, the Yakuza.

Fast reverse to 1987. Kanemaru is backing his buddy, Noboru Takeshita, for Prime Minister. He has the numbers, he has the money – but there is a fly in the ointment. An obscure far-Right group called Nippon Kominto has mounted a”sound attack” against Takeshita, filling the streets of the parliamentary precinct in Nagata-cho with mega-decibel sound-trucks broadcasting all kinds of calumnies against him. Kanemaru goes to see the Kominto boss and offers him(this is the sworn testimony) $A24 million to lay off his boy, Noboru. The offer is rejected. So Kanemaru turns to his friends for help, specifically the notorious Susumu Ishii, since deceased, who was head of Japan’s second largest criminal gang, the Inagawa-kai, an organisation of 10,000 mobsters involved in everything from extortion and prostitution to loan-sharking. Shortly afterwards, to no-one’s great surprise, the sound attack stops and Takeshita is elected Prime Minister.

“Mr Ishii did favours for me on several occasions,” the brazen Mr Kanemaru continued, after giving his colourful testimony about the drowning child. Asked to elaborate, he said, “Smear campaigns.”

Just how “grateful” Kanemaru was for the assistance of the gangsters has not yet been brought out. But it is clear that whatever Ishii wanted – a fat bank envelope full of 10,000 yen notes, or some political favour – was his for the asking. Of money, there was no shortage. It was pouring into Kanemaru’s office in a golden torrent, much of it from one particular company, the company that has given its name to the latest scandal racking the Japanese political system – Sagawa Kyubin. Incorporated in 1965, it began as a parcel-delivery business, the creation of a Kyoto businessman, Kiyoshi Sagawa, one of the new breed of post-war Japanese entrepreneurs with no links to the old zaibatsu like Mitsui and Mitsubishi, and no political connections in Tokyo.

By the early 1980s, when the “bubble economy” was about to take off, it found itself beset with a whole raft of problems in its drive for growth – it had been attacked in Parliament for its “bad labour practices” (driving its drivers too hard), its banks were tightening credit, and it needed government co-operation in everything from rezoning depot sites to opening the postal services to competition.

It appears that Sagawa had been seriously bent for a very long time. In 1978 (according to the National Tax Administration Agency) it avoided $A6 million in taxes; in 1986 it concealed $A70 million in taxable income; and in 1991 Sagawa was ordered to pay $A21 million in penalties for tax evasion.

But this was peanuts alongside the amount that Sagawa’s Tokyo branch, under the presidency of the gregarious Hiroyasu Watanabe, was about to pour into the back-pockets of Kanemaru and some of his fellow LDP legislators to grease the company’s extraordinarily ambitious expansion plans.

The charges (for the Japanese commercial crime of “aggravated breach of trust”) against Mr Watanabe, and public statements by tax investigators allege that Sagawa funnelled a scarcely-believable $A6 billion – about the size of the gross national product of Kenya – to politicians and gangsters over many years. The deals were done at late-night meetings at luxury Tokyo hotels, at the apartment of the mistress of a notorious Tokyo political go-between and at secluded ryotei in the Akasaka district, where dinner and geisha girls start at $1,000 a head.

Suddenly, Sagawa’s problems began to disappear and the company embarked on a phase of phenomenal growth. Between 1989 and 1991 turnover increased more than 500 per cent as Sagawa grew from a minnow among the 14,000 transport companies to the fourth biggest in Japan. Its logo of a stylised medieval messenger carrying a parcel on a bamboo pole sprouted from billboards from Hokkaido to Okinawa.

For all his forthrightness on oath, Kanemaru has been strangely forgetful about the meetings at which the details of his “gratitude” for the gifts from Sagawa were worked out. “I drank three glasses of mizuwari (whisky and water)at the party. Later I had a few more. Under these circumstances … I don’t remember the details very well,” he explained to sighs of incredulity from Opposition members of the parliamentary committee investigating Sagawa.

Other politicians – and the scandal has now embraced half of Prime Minister Kiichi Miyazawa’s Cabinet – were equally vague. The “dirty dozen”, a list provided (and later repudiated) by Watanabe included:

* The International Trade and Industry Minister, Yoshiro Mori, the third most important man in Cabinet, who has been alleged in court evidence to have received a gold coin worth $6,000 and some paintings in 1989 from Kiyoshi Sagawa. “The minister did not receive the coin around that time, but will check on it just in case,” Mori’s spokesman told Kyodo news service.

* Hiroshi Mitsuzuka, the powerful head of the LDP policy affairs research council, is claimed in other evidence to have sold Sagawa 1,000 $200 tickets to one fund-raising function. His spokesman says he “has never heard of this”

* The former Prime Minister, Mr Takeshita, in a separate scam, is alleged to have been an intended recipient of money in the famous “gold leaf screen”case, in which a piece of artwork was sold for $47 million, eight times its real market value, to launder money for a bank stock raid.

* Kiyoshi Kaneko, LDP candidate for governor in Japan’s most notoriously corrupt prefecture – mountainous Niiagata on the Japan Sea – had a stroke of good fortune when all three of his rival candidates suddenly withdrew from the election in 1989.

He has since resigned and is on trial for lubricating his victory with Sagawa money.

So far, Kanemaru is the only national political casualty, having admitted -when the evidence was incontrovertible – to taking $5 million from Sagawa, in breach of political donation laws. He resigned and was fined $2,000, considerably less than the penalty, for instance, for putting out cans and bottles with your garbage on burnables-only collection nights.

So what happened to the $5 million? Kanemaru told the investigating committee that it was distributed to “about 60 comrades”, members of the LDP faction which he ran. If this number of MPs receiving crooked money surprised even scandal-hardened Japanese voters, the amounts raised no eyebrows at all. In a rigged electoral system, members of rival LDP factions slug it out to get elected to seats which return as many as seven MPs. Unable to campaign on party policy differences, they resort to the most depraved pork-barrelling imaginable, promising councils engineering contracts, defending the price of rice to agricultural co-operatives, sending aides to hand out envelopes full of money at constituents’ weddings and funerals. A survey last year revealed that it cost a minimum of $1.5 million a year for a backbench MP to maintain a constituency presence, even in a non-election year – on a salary of about$200,000. To make up the difference, he is dependent on the ability of his party faction boss to put the hard word on businesses like Sagawa.

The biannual hand-out to factional foot-soldiers is known as mochi-dai -literally money to buy rice cakes, a traditional holiday treat in Japan. When Ichiro Ozawa – regarded as a relatively clean, reformist politician – split with the Kanemaru faction last month, he took with him about 40 LDP young turks, to whom he promptly distributed $50,000 a head in used notes. Two million dollars to form a new faction – vote-buying in Japan is that blatant.

At the roaring crossroads outside Shinjuku station, the busiest place in Asia’s busiest city, tatty flags fly from the top of a campervan as a young man in an anorak harangues the unheeding passing throng. “If we don’t find out the truth about Sagawa, then Japanese politics will never change,” he bellows at the shoppers and salarimen crushing past. Flapping against a trestle table in the icy winter wind is a “wanted” poster which carries three crude caricatures – Shin Kanemaru with a black cross through his face, Noboru Takeshita and Ichiro Ozawa.

The organisers of this protest, who call themselves the Students’ and Citizens’ Group for Getting to the Bottom of the Sagawa Affair, have been staking out the station since October 1. They are one of several ginger groups demanding more serious charges against Kanemaru, the resignation from Parliament of Takeshita, and the reform of Japan’s Constitution to do away with “money politics”.

Fortunately for the LDP – if unfortunately for the 124 million people it governs – the message has shown little sign of getting over to the man on the Shinjuku street. An Asahi TV poll a couple of weeks ago showed that 44 per cent of Japanese were concerned about the recession, 26 per cent about political reform, but only 20 per cent about Sagawa.

Next week will see another parade of stone-faced LDP politicians go up the steps to the Diet building to be cross-examined by a committee of MPs.

The Government has reluctantly agreed to produce them as witnesses – the alternative being the Opposition indefinitely blocking the Budget.

The usual suspects will be rounded up, Takeshita, Sagawa (if he should have a miraculous recovery from the illness which has kept him in hospital) and Ozawa among them.

The difference between Sagawa and the Watergate hearings in America, is that, in Japan, no-one seriously expects the politicians to get to the bottom of the affair.

Publishing Info

Pub: Sydney Morning Herald
Pub date: Saturday 13 February 1993
Edition: Late
Section: Spectrum
Sub section:
Page: 42
Word count: 2004
Drawing: By Edd Aragon
Three Portraits: Shin Kanemaru, Noboru Takeshita, Ichiro Ozawa