JPRI Working Paper No. 76, April 2001
Bureaucratic Corruption in Japan
by David T. Johnson


There is a persistent myth in Japanese studies that politicians are dirty but bureaucrats are clean. Though bureaucrats have been involved in all of the major post-war scandals and have been the primary culprits in many, the myth persists.
-- Steven R. Reed1

Nonsense is hard to stomach, no matter who dishes it out, but it is especially distasteful when disingenuously offered up by a government in the guise of an official report. Japan's Foreign Ministry (Gaimusho) recently issued such a report, on a senior official's embezzlement of huge sums from a secret fund ostensibly designed to help diplomats build relations with foreign countries. The official, Katsutoshi Matsuo, headed the Gaimusho's Overseas Visit Support Division between October 1993 and August 1999, where he helped organize trips by prime-ministers, diplomats, and other high-ranking governmental officials. But Matsuo routinely deposited secret Gaimusho funds in his personal bank accounts, from which he then paid for his own trips and trysts with various mistresses. He also purchased eight golf club memberships, five of which together cost 43 million yen, fifteen racehorses for some 140 million yen, and a luxury condominium in Tokyo's Bunkyo ward for a mere 80 million yen. Until his arrest in late January, 2001, Matsuo had obviously been living beyond his salaried means.

The Foreign Ministry's report maintains that Matsuo is a single bad apple in the Gaimusho barrel.2 But the notion that Matsuo could conduct this massive embezzlement-- measured in millions of dollars-- while other Ministry officials remained unaware and uninvolved is implausible in the extreme. Money is mother's milk for the Ministry, and it stretches credulity beyond the snapping point to suppose that Matsuo is the only official who illicitly stole from the $47 million (5.6 billion yen) in classified annual funds.

There are three plausible possibilities: Ministry managers either knew about and condoned the crimes, or they were grossly negligent in managing their budget, or both. The Ministry's report is couched in convenient euphemisms that obscure the secret nature of the funds. Its "bad apple" theory is not only incredible; it is also inconsistent with what anonymous Ministry officials have revealed to reporters-- namely, that Japanese diplomats think nothing of using official funds for purposes that have little to do with their work. Indeed, several Gaimusho officials have acknowledged that proficiency in embezzlement is one fast track to success. "The more a non-career official can squeeze cash through unofficial channels for high-ranking officials to spend freely," one bureaucrat reports, "the more likely it is for that person to be promoted. There are many government officials both inside and outside Japan who could easily become another Matsuo."3

Readers of the Japanese press may recall similar revelations about fiscal misconduct in other parts of Japan's bureaucracy. To take only the most troubling example, the creation of slush funds-- uragane-- by cooking the books through illicit accounting -- fusei keiri -- has been practiced for decades by Japan's most powerful administrative agency: the police.4 Notwithstanding the prevailing view that police in Japan are as pure as the driven snow, the evidence that they misuse tax money is abundant. In 1984, for example, Tadamitsu Matsuhashi, a former supervisor of superintendents in the National Police Agency, wrote a book revealing that "police organizations all over Japan are manufacturing slush funds."5 In subsequent years reporters have documented police slush-fund crimes in Tokyo, Nagoya, Nagasaki, and elsewhere.6 In just the last two years, emboldened by revelations in several police scandals, ex-cops have authored books documenting how police organizations systematically divert money from their budgets to cover under-the-table transfers to senior police officials and to pay for gifts, entertainment, and other illicit purposes.7

Then there were the Ministry of Finance (MOF) wining-and-dining scandals that were uncovered in 1997-98. Although the subsequent investigations revealed that hundreds of MOF officials engaged in illegal and unseemly acts, precisely one official on the elite career track was charged with a crime. Internally, MOF itself disciplined at least 112 officials, but the punishments were light and were directed only against personnel who accepted entertainment from financial institutions and insurance companies. Budget Bureau officials who were wined and dined by bureaucrats from other agencies (kankan settai) got off scot-free.8

Police Corruption

Police corruption is a double problem: it reinforces a culture of secrecy and deceit that is itself a breeding ground for police abuses ranging from perjury to brutality, and it prevents police from properly enforcing criminal laws against other bureaucratic wrongdoers. Police responses to allegations of misconduct take two main forms. Usually they attempt to "kill complaints with silence" (mokusatsu suru), in large part because police managers strictly enforce a code of silence against their subordinates. As former Tokyo Metropolitan Police officer Akio Kuroki has written, cops who tell tales out of class, no matter how truthful, are certain to suffer severe career consequences.9

When silence fails to quell the criticism the police resort to their second strategy: they issue nonsensical "reports" of the kind the Foreign Ministry recently produced. These reports pin police problems on one or a few individuals, thereby denying the need for change in the police's organizational culture and the need for creating external organs that would hold police more accountable for how they spend their huge budget and exercise their formidable powers.

In December 2000, Japan's Management and Coordination Agency finally said enough is enough. For the first time in the postwar period it conducted an administrative inspection of the police and issued a report and advisory of its own. The latter mandates that police redo their inquiry into police misconduct and produce another report, minus the nonsense.10 Time will tell whether the police comply. I am hopeful but not optimistic. There is plenty of reason for pessimism. At the end of the year 2000, for example, during which Japan had experienced an unprecedented number of police scandals, the Asahi Shimbun surveyed thirteen prefectural police departments in order to ask what they considered the year's top ten news stories from their respective beats. Almost all the departments responded with resounding success stories, from big cases cracked to well-run security at official events. As one cop critic succinctly summarizes the situation, everyone fears the police but the police fear no one.11

Lessons

There are at least two lessons to be learned from these tales of bureaucratic corruption. First, it appears that students of Japan-- and academics especially-- have been mistaken about one big fact concerning that country's leaders. We knew that politicians were dirty, but we also believed that bureaucrats were unsullied by the grime of crime and corruption. We were wrong.

Second, the opaqueness of decision-making in Japan's bureaucracy is a recipe for robbery of the taxpayers' money. This, more than anything, is the thread that connects abuses in the Foreign and Finance Ministries and in various police departments. The treatment for this disease arises directly from the diagnosis. Transparency must be the first and biggest plank in any platform proposing to solve government graft.

There is good news and bad news about the prospects for reform. The good news is that in April 2001, when Japan's new freedom of information act goes into effect, disclosure of how taxpayers' money is spent will become, in principle, the rule. This law is long overdue. The bad news comes in two installments. First, the police remain, in crucial respects, "beyond the scope" of the new law's purview. Even in Miyagi prefecture, where the citizens' ombudsman has fought valiantly for greater police openness, the government eventually capitulated to almost all police demands for sustained secrecy. The closure of police and diplomatic budgets to outside scrutiny is a problem to which the answer is known. Unfortunately, the political will to implement the answer is absent.12

There is more bad news. The new freedom of information law, like the many laws already on the books that could be used to target financial improprieties, will be only as strong as its enforcers are skillful and vigorous. Judging from recent history, there is more than ample reason to believe that the big gap between "the law on the books" and "the law in action" will continue to yawn wide even after the new law goes into effect. For example, the Board of Audit (Kaikei Kensain), which is constitutionally charged with overseeing how tax money is spent, has been singularly unwilling to follow any of the many leads it has had into police slush funds and illegal accounting. Indeed, every year for the last half-century the Board has exposed not a single case of improper police accounting.13

The Prosecutors' Office has done no better. Between 1980 and early 1999, prosecutors had received eleven complaints about illegal accounting in various administrative agencies (these are just the complaints they accepted; prosecutors refused to hear many more). Of the nine cases prosecutors have decided so far, all ended in "no indictment."14 It appears that leniency in the procuracy arises in part because prosecutors create and misuse slush funds as much as other bureaucrats do. For instance, investigative reporters for a Japanese monthly magazine recently revealed that the procuracy receives about two million dollars each year for special "information gathering" and "investigative activities." These funds are known as chosa katsudohi, or chokatsu for short, and neither prosecutors nor their bosses in the Ministry of Justice are obligated to divulge how the money is spent.

Reporters found that Shunsuke Kano, the current chief prosecutor (kenjisei) of the Osaka District Prosecutors Office, embezzled thirty to fifty thousand dollars from this account when he was chief prosecutor of the Kochi District Prosecutors Office between July 1995 and July 1996. Kano is said to have spent the money on meals at high-class restaurants, entertainment at bars and nightclubs, and golf. As in the police department, this misspent money was mobilized by subordinates who concealed it in a second set of account books. And as in the police department, embezzlement resulted in excessive leniency toward other white-collar offenders.

In May 2000, after a three-year investigation into alleged embezzlement by twenty-five officials in the Osaka prefectural government, prosecutors in Osaka found "insufficient evidence" to indict three of the twenty-five officials but adequate proof to charge the other twenty-two with crimes. However, none was indicted. "In consideration of extenuating circumstances" (the embezzlers returned the stolen loot during the course of the investigation) prosecutors suspended charges (kiso yuyo) against all the wrongdoers. Front-line prosecutors wanted to proceed to trial but their boss -- the same Kano -- killed the cases. In the procuracy, as in the police department, corruption debases justice.15

Conclusion

Students of Japanese government disagree over the prospects for purifying a system that has been characterized as "rotten to the core."16 Some contend that "there is far less corruption now than there was in the past" and predict that corruption is "almost certain to continue to decline in importance" in years to come.17 Others argue that corruption "will continue to flourish in Japan" because its cultural roots are deeply imbedded in government and society.18 I doubt that corruption in the bureaucracy has declined. If anything, the number and seriousness of bureaucratic scandals have increased during the last decade (although the relationship between "corruption revealed" and "real corruption" is famously difficult to discern). Whatever the long-range realities, one may still ask who, ultimately, is responsible for the dirty messes Japan's government so frequently finds itself in. For me at least, this question admits no easy answer.

According to one popular view, if the Board of Audit, prosecutors, police, and various ministries are misusing or tolerating the misuse of taxpayers' money, they are able to do so because of a permissive public, apathetic voters, and timorous media. It follows that if Japan is a democracy that affords its citizens ample means of expressing their preferences, then voters have only themselves to blame for the present state of their government. But this analysis begs the question: Is Japan that kind of democracy and are voters to blame?

Consider that at the beginning of 2001, only 9 percent of Japanese adults had confidence in their Diet and only 8 percent had confidence in their national bureaucracy. The comparable figures for the United States, where trust in government is hardly a venerated tradition, were 63 and 51 percent. Moreover, according to a survey jointly conducted late last year by the Yomiuri Shimbun and the Gallup Organization, 75 percent of U.S. voters said they have been able to get their opinions heard in their nation's politics. In contrast, a scant 10 percent of Japanese voters thought likewise. It appears that many Japanese citizens feel utterly alienated from government, particularly citizens living in urban areas, where representation in the Diet does not reflect population strength. Japan's electoral system remains badly malapportioned, as it has throughout the postwar period. In single-seat constituencies in the most recent Lower House election (June 25, 2000), the Liberal Democratic Party won 60 percent of the seats with only 40 percent of the vote.

However, there is compelling evidence that the public's crisis of confidence in government is best explained not by malapportionment, nor by Japan's moribund economy, but by perceptions of misconduct in government. In short, the more people learn about their leaders' misconduct in office, the lower their faith and trust in government.19 Despite this it remains to be seen whether the public's deep discontent with government will usher in a period of real reform of Japan's corrupt bureaucracy.

NOTES

1. Steven R. Reed, Book Review of Richard H. Mitchell's Political Bribery in Japan (Honolulu: University of Hawai'i Press, 1996), in Social Science Japan Journal, Vol. 2, No. 1 (1999), p. 126.

2. "Ministry Report Omits Secret Fund Reference," The Daily Yomiuri, January 26, 2001.

3. "Japanese Diplomats Having a Ball at Taxpayers' Expense," Asahi Evening News, January 31, 2001. See also "Diplomatic Secrecy Cloaks Woeful Practice," Asahi Evening News, January 31, 2001; and "New Komeito to Call for Cut in Secret Funds," The Daily Yomiuri, February 3, 2001.

4. Yu Terasawa, ed. Omawari san wa Zeikin Dorobo [Your Friendly Policeman is a Tax Thief] (Tokyo: Media Works, 1998).

5. Tadamitsu Matsuhashi , Wagatsumi wa Waga mae ni Ari: Kitai Sareru Shinkeisatsu Chokan e no Tegami [My Sin is Always Before Me: A Letter to the Next Director of the National Police Agency] (Tokyo: Shakai Shisosha, 1994, expanded ed.).

6. Hiromitsu Ochiai, "Hirogaru Keisatsu no Fusei Keiri Giwaku" [Growing Suspicions of Illegal Accounting by the Police], Asahi Shimbun, June 6, 1997. See also Michio Kobayashi , Nihon Keisatsu no Genzai [Police in Contemporary Japan] (Tokyo: Iwanami Shoten, 1998).

7. Bunro Akagi , Akagi Keibuho, Hiroshima Kenkei o Kiru [Sergeant Akagi Exposes the Hiroshima Prefectural Police Department] (Tokyo: Daisan Shokan, 2000). See also Saburo Kurusu, Fushoku Seru Keisatsu: Keishicho Moto Keishisei no Kokuhaku [Corrupt Police: Confessions of a Former Superintendent of the Tokyo Metropolitan Police Department] (Tokyo: Shakai Hihyosha, 2000).

8. "Corruption Flourishes in Nation's Decaying Financial System," Asahi Evening News, May 27, 1998; "Probe Reveals Corruption at the Center of Financial Industry," Asahi Evening News, May 29, 1998; Sheryl WuDunn, "Japan's Corruption Fighter is Shunted Aside," New York Times, August 14, 1998.

9. Akio Kuroki, Keisatsu Fuhai: Keishicho Keisatsukan no Kokuhatsu [Police Corruption: A Tokyo Police Officer Blows the Whistle] (Tokyo: Kodansha, 2000). See also Akio Kuroki, Keisatsu wa Naze Daraku Shita no ka [Why Have the Police Become Corrupt?] (Tokyo: Kusashisha, 2000).

10. Somucho Gyosei Kansatsukyoku, Keisatsucho ni Okeru Fushojian Taisaku ni kan suru Gyosei Kansatsu Kekka Hokokusho [Report on the Results of the Administrative Inspection of the National Police Agency's Countermeasures to Corruption], December 2000; and Somucho, Keisatsucho ni Okeru Fushojian Taisaku ni kan suru Gyosei Kansatsu Kekka ni motozuku Kankoku [An Advisory Based on the Results of the Administrative Inspection of the National Police Agency's Countermeasures to Corruption], December 2000.

11. Hiromitsu Ochiai, "Who Polices the Police?" Japan Quarterly, April-June 2000, pp. 50-57.

12. Tsunesuke Kurayama, Secretary General of the Sendai Citizen Ombudsman Group, "Keisatsu no Joho Kokai o Meguru Miyagi no Ugoki" [Developments in Miyagi Relating to Disclosure of Information by the Police], paper presented at the Symposium on Police in Japan, Japan Federation of Bar Associations (Tokyo, December 7, 2000). See also "Miyagi Debate Advances Cause for Broader Police Openness," Asahi Evening News, October 17, 2000; "Miyagi Police Face Info Rights Curb," The Daily Yomiuri, November 29, 2000; and "New Guidelines Squeeze Errant Police," Asahi Evening News, January 13, 2001.

13. Hiromitsu Ochiai, op. cit.

14. Hiromitsu Ochiai, "Keiji Sekinin Towanu Kensatsu: Kankocho no Fusei Keiri Fukiso Aitsugu" [Prosecutors are Not Pursuing Criminal Responsibility: Illegal Accounting in Government Agencies-- The Non-Indictments Continue], Asahi Shimbun, January 24, 1999.

15. "Kensatsucho no Daibutsu Kanbu ga Shuhan to Natta: Soshiki-teki na Kokin Oryo Hanzai o Tettei Kokuhatsu" [The Principal Offender in theProsecutors Office is an Important Executive: A Thoroughgoing Indictment of the Organizational Embezzlement of Public Money], Uwasa no Shinso, February 2001, pp. 24-30. See also Hiromitsu Ochiai, Asahi Shimbun, January 24, 1999.

16. Jacob M. Schlesinger, Shadow Shoguns: The Rise and Fall of Japan's Postwar Political Machine (New York: Simon & Schuster, 1997), p. 88.

17. Gerald L. Curtis, The Logic of Japanese Politics: Leaders, Institutions, and the Limits of Change (New York: Columbia University Press, 1999), pp. 165, 170.

18. Richard H. Mitchell, Political Bribery in Japan (Honolulu: University of Hawai'i Press, 1996), p. 157.

19. Susan J. Pharr, "Officials' Misconduct and Public Distrust: Japan and the Trilateral Democracies," in Susan J. Pharr and Robert D. Putnam, eds., Disaffected Democracies: What's Troubling the Trilateral Countries? (Princeton: Princeton University Press, 2000).

DAVID T. JOHNSON is Assistant Professor of Sociology and Adjunct Professor of Law at the University of Hawai'i at Manoa. He is also the author of "Why the Wicked Sleep: The Prosecution of Political Corruption in Postwar Japan," JPRI Working Paper 34, reprinted in Asian Perspective, Vol. 24, No. 4 (2000).

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