The Shadowy Fourth Pyramid: Organized Crime and Corruption

1
The Shadowy Fourth Pyramid Organized Crime and
Corruption
Organized Crime
Big Business
Govt Bureaucracy
Elected Politicians
2
Internal Organization of Yakuza

• Vertical organization
• strong ties between Oyabun and Kobun
• links between different groups and sub-groups
• Persons join in ritual creating a family-like
  bond
• Great emphasis on loyalty
• Punishment for violations or poor performance
• Yakuza relatively open to minority groups

3
Yakuza As Procurers of Labor, Goods, and Services

• Traditional role as labor bosses recruit and
  provide labor services for state and companies
• Currently involved in providing foreign women for
  entertainment businesses
• Involved in black marketeering, vice industries,
  and drug trafficking
• Run legitimate businesses as well as scams

4
Yakuza Links to Politics
Organized Crime
Big Business
Govt Bureaucracy
Elected Politicians
5
Yakuza Ties to Politics

• Hold conservative, Emperor-centered nationalist
  political views
• Have ties to conservative political parties,
  particularly the LDP
• Often called upon to be secret liaisons and carry
  out dirty business for politicians
• Yakuza and Sokaiya create false right-wing
  political organizations for extortion,
  intimidation

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Yakuza Links to Government
Organized Crime
Big Business
Govt Bureaucracy
Elected Politicians
7
Yakuza as Private Police

• Law, police, and courts oriented to state
  control, not to private dispute settlement
• Yakuza and other private fixers settle claims,
  collect debts, negotiate damage settlements by
  persuasion and force
• Yakuza called upon to maintain social order
  beyond the normal reach of law and police
• Toleration and tacit acceptance of these roles
  makes it difficult for state to control excesses

8
Yakuza and Sokaiya Business Links
Organized Crime
Big Business
Govt Bureaucracy
Elected Politicians
9
Yakuza Provide Business Services

• Yakuza are hired by banks and companies to
  protect assets in emergencies, special situations
• Yakuza extort regular protection payments from
  small firms to prevent property damage
• Yakuza control and expedite essential transport
  services, extracting fees and commissions

10
Sokaiya or Meeting-men

• Sokaiya use stockholder status to extort money
  from corporations by threatening disruptions
• They blackmail companies by threatening to expose
  corporate wrongdoing
• But they also work FOR companies to prevent other
  sokaiya from disrupting meetings
• Companies have been paying enormous sums
• Police, prosecutors now prosecute executives

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Scandals and Corruption Spread

• Corruption scandals traditionally involved
  business payoffs to politicians
• 1995-96, reformist Minister of Health exposed
  corruption over tainted blood products involving
  pharmaceutical companies with insider ties
• In 1996-97 prosecutors exposed illegal loans by
  financial institutions to yakuza and sokaiya
• In 2001-2002 corruption exposed in Foreign
  Ministry involving slush funds, improper
  influence by a powerful Diet member

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Corruption in All Four Pyramids
Organized Crime
Big Business
Govt Bureaucracy
Elected Politicians
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How Can Corruption Be Reduced?

• Limiting Amakudari by bureacrats
• reduces opportunities for corruption with tax
  money
• Stronger controls on campaign finances
• reduces flow of funds for election corruption
• Stronger prosecution of sokaiya payments
• reduces illegal diversion of corporate funds
• Change in party controlling government
• breaks longstanding ties, shakes up bureaucracy
• allows different kinds of legislation to pass