It is always fascinating to see a group bound by a strong code of conduct operating in a way which appears to be invincible; reminiscent of The Godfather. While Italian and Russian mafias are well known and have blended into mainstream pop culture, the ancient Japanese mafia, Yakuza, still operates, away from the watchful eyes of the West.
Yakuza, in an old card game, Oicho-Kabu, means “the worst hand that can be drawn.” Many Japanese people and corporations will be willing to attest the claim. Through their nefarious acts, these gangs have meant nothing but trouble for a considerable number from the populace. Their borderline insanity but elaborate style of work has earned them the title of one of “the most sophisticated and wealthiest criminal organisations”  in the world.
The origins of the Yakuza date back to the mid-Edo period, the early 1600s. The Yakuza rose out of two lowly social groups – the peddlers (tekiya) and the gamblers (bakuto). The tekiya formed organisations and used power in numbers to undertake commercial and administrative roles. For protection of their interests, a group arose among the peddlers to act as security for their stalls. As for the bakuto, they ran gambling houses and loan sharking businesses on the outskirts of towns and villages. This, for obvious reasons, made them even more looked down upon by the masses than the tekiya. The Yakuza emerged from the misfits amongst these peddlers and gamblers. Since its inception, the Yakuza have followed the hierarchy of oyabun-kobun, where the members of the gang (kobun) owe unconditional fidelity to their leader (oyabun), who they treat as their foster father. Eventually, the Yakuza were formally recognised by and were seated on high ranks within the government.
The modern structure of the Yakuza came after the Second World War. As the government cracked down on gangs within Japan, the Yakuza were forced into dormancy for the period of the war. Soon enough, they adapted to their situation and were on the rise again. They refined their hierarchy into a more intricate and complex mechanism – the members of the gang had to cut ties with their families and treated each other as their immediate family. The traditions of fully tattooing of the body to show resilience to pain, and cutting off a finger to apologize continued while the newly evolved code of jingi was adopted, where loyalty and respect are a way of life. Numbers indicate there’s 34,500 members under the Yakuza umbrella, as of 2017.
How does the public and the Government view these tattooed gangsters with severed pinky fingers roaming on their streets? Nothing on the lines of convention for sure, as the Government recognises membership of a Yakuza gang to be legal. The Yakuza are an integral part of the Japanese community and culture as a whole, even celebrating festivals with the general public. Yakuza offices have their logos proudly embossed on their office gates, politicians and executives regularly attend Yakuza celebrations, and co-exist with the community for large parts.
In the past, the National Police Agency, Japan’s police force, believed they helped maintain law and order to a large extent by keeping out other major crime syndicates out of Japan and by doing so, kept Japanese public away from other instances of heinous crimes. But the tides are changing; the public has started looking down upon politicians and companies with Yakuza ties. To put it simply – the most influential gangs overplayed their hand and brought the wrath of the public upon themselves. This backfired powerplay can be broken down into two aspects: the political and economic.
The Yakuza have been entangled in Japanese politics in what seems like forever. It had come to light two decades back that a Yakuza gang had practically got Noboru Takeshita elected to the post of the Prime Minister in 1987. Robert Whiting, in his book Tokyo Underworld, elucidates how Yoshio Kodama, a Yakuza right-hand, was important to the formation of the Liberal Democratic Party in the 90s by helping quell socialist activities by other Communist parties.
More recently, in 2012, Prime Minister Yoshihiko Noda had to dissolve the Diet, the Japanese parliament. The breaking point was appointment of Keishu Tanaka, a Yakuza linked minister, as the Minister of Justice. The irony of the Justice Minister having ties to a crime syndicate was not lost on the Japanese populace; he stepped down twenty-three days into his new office due to internal pressure, citing to the world it was for “health related reasons”. It is interesting to note that the distinctive point for the Democratic Party of Japan (DPJ) was that it would bring a “clean government,” a breath of fresh air for the people who lived under the scandal-riddled LDP for more than a decade. Two years before it came to power, the DPJ received the blessings of Yamaguchi-gumi and Inagawa-kai, the two biggest Yakuza gangs in Japan. To add fuel to the already raging fire, Noda fully backed Tanaka after links to the Yakuza surfaced. Further, Noda had to return USD 20,000 which he received from people linked to the Yakuza. LDP Senator Shoji Nishida said that DPJ puts the underworld and overworld together and that they have been a channel for the underworld to take over the politics of Japan.
What does the Yakuza want from this? Consider this – the leader of Inagawa-kai, Uchibori, had been trying to evade money laundering charges which were made easier because of Tanaka. Even after Tanaka stepped down, Uchibori emerged untouched – such is the invincibility commanded by the Yakuza.
What does DPJ want from this? Money is definitely the forerunner. According to Morgan Stanley, Yamaguchi-gumi is the second largest private equity group in Japan. Jeff Kingston, from Temple University, Philadelphia claims if the gang was listed on the exchange, it would rival Toyota. It’s not just money. The Yakuza specialize in extortion and blackmail. It is not difficult for them to blackmail a politician to support their cause if riches don’t satiate one’s appetite. For one, after Uchibori came out clean after the money laundering incident, Inagawa-kai sent out dirt on many politicians connected to the gang to local media houses, severing all ties with them, publicly. The message was crystal-clear: if they can’t bring anything of use to the table, they’re not required.
The Yakuza are funded well enough to buy offices across the Ritz, and priceless artifacts by Picasso and Van Gogh (along a handful of politicians). The question is, how did they get this money? Since the Yakuza are, on paper, legal, they have a legal front to earn their finances – dispatching day labourers. However, if day labour allowed one to have Picassos, I’d fancy one myself.
The Yakuza’s hand in the Japanese economy historically stayed small, but a jump came during the years of Japan’s bubble economy in the 80s – the value of stocks on the exchange grew by 435,000 billion Yen; four times more than Britain’s GNP in 1989. The Yakuza made deals which would have made Don Corleone proud. The deals include, but are not limited to buying Vegas casinos, manipulating the stock market, and getting the brother of George Bush to act as a guarantor for a shell company they created. The age of Keizai Yakuza, the Yakuza of economics, was well and truly here – they were no more a neighbourhood gang.
Take into account the Itoman scandal of 1990, which shook the foundations of the Japanese markets and businesses. The story in brief was that Itoman, a textile company, when faced with hard times, was bailed out by Sumitomo Bank, a leading Japanese bank. Once re-established, Sumitomo asked a favour from Itoman – helping an ailing property development company. The company was led by a man with extensive Yakuza connections and he acquired 19% of Itoman’s shares as well as forced Itoman to buy the properties of the company at highly inflated rates. To buy these properties, Itoman had to run into large debts which it ultimately could not pay back. These debts had to absorbed by the Sumitomo Bank.This led to the fall of two major, well-to-do companies of Japan, with ramifications resounding throughout the globe.
Even today the breaking point for many companies comes when the Yakuza syndicates, with their ample treasury, use their shell companies and start buying significant shares in companies on the exchange to either attempt a takeover, or to earn a profit when the company usually has to buy back its shares at a loss to avoid getting shred to the last penny by the Yakuza.
Their gargantuan rise has been limited to a large extent by the generally bearish Japanese market. However, the big guns have already made enough to last them a lifetime. To add on, police in the States and Australia already have their doubts as to the Yakuza’s plan to enter their economy and the business world. The Yakuzas bought a lot of land in the US during the 80s bubble. This gave the money from expanding into the States and making their plots useful as casinos and residentials. Not only this, the Yakuza is becoming an international liability for Japan. In 2011, Obama called the Yakuza a threat to US and imposed economic sanctions on Yamiguchi-gumi.
The more the Yakuza has been let loose the more they have tried to grab. According to a survey by the Tokyo Metropolitan Police Department, out of 2106 companies surveyed, 41% had been threatened by the Yakuza. Moreover, the bigger the company the more Yakuza felt like preying on it as 70% of companies on the list are ones which have sales above JPY 1000 billion. 30% of the companies even admitted to caving in and giving some money to them.
The Yakuza are not entirely bad guys. After the 2011 earthquakes, Yakuza provided adequate aid faster than Japanese authorities. They hold their code of conduct strong and continuously provide aid to the ones in need.
A Boryokudan (Yakuza) Countermeasures Law was passed in 1991 by the Japanese Government, giving police forces more authority to fight against the Yakuza. The two main criticisms it faces is that it will drive the criminal activity underground, where it might compound exponentially and make it difficult to be traced. Second, this law has come too late. The Yakuza have already diversified into a lot of businesses overseas including gambling, prostituition centres, security firms et cetera and have a good amount of funds from the long list of scandals they have already done and a steady stream from the scandals they still very possibly participate in. According to senior officials at the Tokyo Metropolitan Police, unless the police have powers to confiscate the assets of the gangs, they can make no real progress against the Keizai Yakuza.
The Yakuza have managed to chip away at banking and real estate sectors and influence the stock market – to the extent the government had to spend billions on these industries to keep them alive. I particularly like Dr. Messersmith’s analogy comparing Japan’s economy to a car’s gears. He says if one gear doesn’t work, the entire car stops functioning, and that non-functional gear can make the other gears around it non-functional too. For Japan, that gear has been the Yakuza. Dr. Messersmith also suggests that trying to fully eradicate organised crime is a utopian dream. What the government should focus on is to oust Yakuza from high echelons in the banking sector by breaking the close relationship between the bankers, politicians and the mafioso. It is also important to introduce laws in businesses which require to get paperwork done. This way the Yakuza won’t be able to be as influential as it is at the moment. The judicial system in Japan could use a bit more transparency too.
All hope doesn’t seem lost. A 2015 split in the Yamaguchi-gumi created the Ninkyo Yamaguchi-gumi, headed by Yoshinori Oda, who is a strong proponent of his gang leaving past illegal activities aside and move into perfectly legitimate business. He plans on operating a private security firm with the fabled toughness and fearlessness of the Yakuza soldiers as his selling point. A lot of new recruits are buying into this idea too. Maybe we’ll see the Yakuza members writing anime and selling ramen one day. Afterall, who knows?
By Aaradhya Daga
1st year Undergraduate student, Shri Ram College of Commerce
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