Working Paper No. 83, December 2001
Kishi and Corruption:  An Anatomy of the 1955 System
by Richard J. Samuels

The extended period in Japanese politics during which a single conservative party (i.e., the Liberal Democratic Party, or LDP) was dominant-- what has come to be known as the "1955 System"-- was virtually coterminous with the Cold War. Yoshida Shigeru (1878-1967) deserves credit for laying the foundation of this system, but his "mainstream" conservatism was just one of several streams flowing into the reservoir of postwar Japanese political power.* Yoshida's preeminence and his legacy is challenged by a very different kind of conservative, Kishi Nobusuke (1896-1987), who was also an architect of the "transwar" system of industrial and economic policy. Yoshida and his disciples represented the more decorous "mainstream" of LDP hegemony and worked comfortably with the "orthodox" business community (seitoha zaikai). Kishi, by contrast, managed to maintain contacts with the mainstream while also connecting the non-zaibatsu business community and selected parts of the discredited prewar world of ultra-nationalist politicians and control bureaucrats (tosei kanryo) to the postwar conservative hegemony.

The political choices of each contributed significantly and quite directly to the "structural corruption" (kozo oshoku) that came to be a central feature of Japanese politics and that sustained conservative power. Yoshida's contribution was made before the consolidation of the conservative camp, Kishi's came later. The system was not the result of their collusion, but of their vigorous political competition. Yoshida never belonged to the Liberal Democratic Party. The LDP was created by Kishi and his allies to take power away from Yoshida and to undo many of the reforms that they felt Yoshida had rashly acceded to under American pressure. Thus, it was Kishi who wove together the still disparate threads of conservatism in postwar Japan. He did not displace the Yoshida mainstream-- he widened conservative hegemony to accommodate the rest of its constituent parts. While LDP dominance would not be fully consolidated until Kishi's revisionist platform had been rejected and after the LDP had moved back to the center, Kishi made the "golden age" of the LDP possible-- above all for men like Tanaka Kakuei, who later elaborated and transformed his model of money politics, and for maverick successors like Nakasone Yasuhiro and Ozawa Ichiro, who took up his ideas for constitutional reform. Kishi Nobusuke did not dictate the final terms of the conservative project or of LDP dominance, but he contributed more than any other to its main characteristics-- both respectable and disreputable. Nakasone has identified Kishi Nobusuke as Japan's greatest postwar political leader.1

Reinvention and Rediscovery

Even in a Cold War world of cynical opportunism and rapidly shifting alliances, Kishi's postwar "resurrection" was remarkable. Kishi had been General Tojo's closest deputy for nearly a decade, until the fall of Saipan. Yet, in June 1957, in the same U.S. Senate chamber where a decade and a half earlier a declaration of war against Japan had been approved, Vice President Richard Nixon banged the gavel to introduce Prime Minister Kishi Nobusuke, proclaiming him an "honored guest" who was "not only a great leader of the free world, but also a loyal and great friend of the people of the United States."

Kishi responded grandiloquently, testifying to his "honor of speaking in this citadel of democracy" and his "belie(f) in the lofty principles of democracy-- in the liberty and dignity of the individual." Many friends in high places-- both Japanese and American-- had facilitated his postwar ascent to power but most important was his ability to reinvent himself. Upon his release from prison in December 1948, for example, Kishi drove directly to the Prime Minister's residence, where he met his brother, Sato Eisaku, the Chief Cabinet Secretary, literally to exchange his prison uniform for a business suit. He recalled to his biographer that more than the clothing felt odd. "Strange, isn't it?" he asked his brother, "We're all democrats now."2

Kishi began building his political career long before the end of the war. He first ran for elective office in 1942, while serving as Minister of Commerce and Industry. The election, under the auspices of the corporatist Imperial Rule Assistance Association (Yokusan Seiji Taisei Kyogikai-- IRAA), was minimally competitive, as two-thirds of the successful candidates had been "approved" and subsidized by the state. Future LDP leaders Hatoyama Ichiro, Kono Ichiro, and Miki Bukichi were among the eighty-five successful independent candidates, as was the future political "fixer," Sasakawa Ryoichi.

The wartime campaign gave him considerable insight into the darker side of campaign financing. There were rumors that Kishi had already enriched himself and his political allies while serving as a bureaucrat in Manchuria. Connections to the opium trade through radical nationalists and to industrialists, combined with his personal control of the movement of capital in and out of the puppet state, made Kishi singularly influential-- and likely very rich. Indeed, while still in China Kishi became known for his consummate skill in laundering money. It was said that he could move as much money around as he wished "with a single telephone call," and that he did so both legally and illegally and for public and private purposes. By the time Kishi returned to Tokyo in 1939, he had built up an impressive network of political allies inside and outside government. He was already the prototypical LDP political elder.

In 1944, even before the war's end, Kishi began mobilizing this network. Once it became clear to him that the IRAA program of "one party in onecountry" would not work in an environment of competing interests, he created the "Kishi New Party" (Kishi Shinto). Building upon his ties to industry-- virtually none of which were old zaibatsu affiliates-- Kishi recruited thirty-two Dietmen. It was an eclectic mixture. Some, like his future Foreign Minister Fujiyama Aiichiro, were independent businessmen with whom he had collaborated in China. Others were ultranationalists who had planned the ill-fated coups d'état in 1931. Standing ready to help were senior executives of the "public policy companies" that Kishi had helped to create, independent (non-zaibatsu) businesses that Kishi had helped to nurture, and a large number of small and medium-sized businesses that had profited from his wartime control program.

Sorting out the Parties

The decade following the end of the war was a period of intense upheaval for Japanese political parties. The Japan Socialist Party (JSP), as the main opposition to the conservative parties, led a coalition government under Prime Minister Katayama for ten months from April 1947 to February 1948. Although some small splinter groups broke off during 1948, the bulk of the JSP remained together until October 1951, when the party split into separate Left and Right factions over the question of ratification of the Peace Treaty and the Security Treaty with the United States. The Communist Party, which had done well in the 1949 elections, veered off into a strategy of violent revolution that cost it popular support.

The conservative parties were more divided and underwent even more transformations than the Socialists. When parties were reestablished in 1945, there were three major conservative parties: the Liberals (Nihon Jiyuto), the Progressives (Nihon Shinpoto), and the Cooperative Party (Nihon Kyodoto). But their ranks were soon decimated by the purge of politicians who had ties to wartime politics. Their greatest loss was the Liberal Party leader, Hatoyama Ichiro, who was purged in 1946 when the Liberals had become largest party in Diet. In his place, Yoshida Shigeru became party leader and prime minister. By the early 1950s the conservatives had settled into the mainstream conservative party of Prime Minister Yoshida (the Liberal Party) and the Japan Reform Party (Nihon Kaishinto), but the conservative political landscape was still far from settled. Efforts to reconcile Yoshida and Hatoyama, after the latter was de-purged in 1951, failed. Yoshida refused to relinquish control of the party to Hatoyama, who had been instrumental in creating it. Prewar associations, personal enmities, and numerous debts were all in play, and no unified conservative solution seemed possible.

Conservative disunity was not only personal. Much of it was substantive and policy-oriented-- and began with the Constitution itself. No politician was more outspoken and energetic on the need to revise the Constitution than Kishi. He worked relentlessly to gain political support for revision so that Japan could rearm, become an equal security partner of the United States, and enjoy an autonomous foreign policy. He captured the attention of most of Japan's postwar right when he wrote that in order for Japan to regain its status as a "respectable member (of) the community of nations it would first have to revise its constitution and rearm: If Japan is alone in renouncing war, . . . she will not be able to prevent others from invading her land. If, on the other hand, Japan could defend herself, there would be no further need of keeping United States garrison forces in Japan. . . .Japan should be strong enough to defend herself."3

Kishi was determined to lead the right-wing conservatives to power, and he considered a number of routes to that end. While still in prison he developed a plan for combining right-wing Socialists and conservatives into a "popular movement of national salvation" (kukoku kokumin undo) that would serve as a large umbrella for politicians and policymakers like himself who believed in the efficacy of an activist state that, working with a mobilized populace, could define and act in the national interest. Kishi had a well-developed vision of a stable Japanese polity ruled by a dominant party. Upon his release from prison, he revived the model of his late wartime "Kishi New Party" and his prewar "Association for Defense of the Fatherland" (Gokoku Doshikai) in the form of a "Japan Reconstruction Federation" (Nippon Saiken Renmei). He built his federation party around a number of former Minseito (one of the two main prewar conservative parties) politicians and control bureaucrats, and made Shigemitsu Mamoru, the former Foreign Minister, its nominal leader. The party goals were anti-communism, promotion of small and medium-sized businesses, deepening of U.S.-Japan economic relations, and revision of the Constitution.

Kishi also tried to reach out to the moderate left, but when Socialist leaders Asanuma Inejiro and Nishio Suehiro rejected him, he resigned himself to building his party from within the conservative camp alone. Despite having raised hundreds of millions of yen from industrialists-- many in the defense industry-- Kishi's federation failed in its first (and only) electoral test. When Yoshida Shigeru called for elections in the autumn of 1952, Kishi was not prepared and his young party was crushed at the polls. Kishi, who had not run on his own ticket, had to consider other options.

He flirted with joining the Socialist Party but, at the urging of his brother, Sato Eisaku, he turned reluctantly to Yoshida's Liberal Party. Kishi rationalized cooperation with Yoshida as a way of getting inside the main conservative tent so that he might transform it from within. At first, Yoshida-- whose battles with Kishi dated from their opposing positions during the wartime mobilization-- wanted no part of him, so much so that he had intervened with the Occupation authorities to keep Kishi from being de-purged. But this was a time of fluid ideological borders and great political desperation. Kishi brought to the table considerable political resources. He had money and (not unrelatedly) a battalion of politicians, both of which made his partnership palatable, if not appealing, to Yoshida. In the event, Yoshida took him in and Kishi won his first postwar Diet seat in 1953.

Now a Liberal Party Diet member with his own faction, Kishi lost no time in denouncing his party's defects from within. He painted a picture of the party's leader, Japan's prime minister, as a collaborator with the Americans who was unable to defend Japanese interests. Kishi argued vigorously for Japanese rearmament and economic planning, based upon a "democratic" anti-communism. Constitutional revision was tougher. Yoshida tried to co-opt the issue by setting Kishi up as chairman of a Diet committee to study constitutional reform. But Kishi used the committee as a bully pulpit to undercut Yoshida's leadership. He pulled to his side several of Yoshida's most senior colleagues, including Ishibashi Tanzan, the future Prime Minister, as well as the Japan Federation of Employers (Nikkeiren), which announced its support for a strong, new government. "We Liberals," Kishi argued with extraordinary chutzpah, "must be prepared to make concessions to our fellow conservatives. We must not insist that Yoshida be returned as Prime Minister if this issue is a stumbling block to unity. We must be realistic."4

Kishi Nobusuke was surely the equal of any realist politician in history. There was no stratagem too cynical and no ally too close to betray in his pursuit of power. Unwilling to wait for the outcome of negotiations between Yoshida and Hatoyama to resolve their differences, Kishi forced the issue. He joined Ishibashi and Ashida Hitoshi in April 1954 to create a "New Party Formation Promotion Council" (Shinto Kessei Sokushin Kyogikai). Flashing "show money" (misegane) that seemed evidence of his close ties to deep corporate pockets, Kishi and his colleagues convinced two hundred politicians to join their call for a new conservative alternative to Yoshida's Liberal Party. Not surprisingly, Yoshida expelled him from the party after this open revolt.

In November 1954, Kishi took his faction and joined Hatoyama and others to form the Democratic Party. Hatoyama, the once purged prewar Seiyukai politician, became the party head. In Japanese parlance, he was the "omikoshi," the portable Shinto shrine carried (and steered) by Kishi Nobusuke, who reserved for himself the post of party secretary-general. Together they called for a conservative camp united against communism, for rearmament, for a more independent foreign policy, and for regaining control of Japanese security. Promising to call an early election, the Democrats gained the support of the Left and Right Wing Socialist Parties for a no confidence vote that ended the political career of Yoshida Shigeru and that brought Hatoyama to power. In the subsequent election, the Democrats took 185 of 467 seats, while the decimated Liberals lost nearly half their Diet strength. Kishi, now widely recognized as the king maker, saw his own faction triple in size. Aware that the DP would not be a stable solution, he immediately reached out to the rump Liberal Party to complete the conservative consolidation.5

Just one day after the Hatoyama government was installed, Kishi began negotiations with Ishii Mitsujiro, the Secretary General of the Liberal Partyand other powerful conservatives, such as Miki Bukichi. Hatoyama was not enthusiastic. He might, after all, have to step aside in the event of a merger. Once again the indefatigably ambitious Kishi was subverting his party leader. This time he got even more than he had sought. What had begun as a campaign to create a stable two-party system as a way to prevent the left from gaining power became a hegemonic "one and a half party system" in which the consolidated conservative camp, under the expansive Liberal Democratic Party, governed Japan for more than four decades across a broad ideological divide rigidified by the cold war.

The New Political System

While it is now recognized that "Kishi was the father of LDP dominance," and that he was "the central figure" in building the 1955 system, the formation of the Liberal Democratic Party in November 1955 must be one of the most over-determined events in Japanese political history.6 Not only had Kishi been maneuvering to achieve it for half a decade, but the Japanese business community and U.S. Secretary of State John Foster Dulles each had openly demanded it. However, the clincher and proximate cause was the reunification of the Japan Socialist Party in October 1955.

Business leaders issued the first open call for consolidation of the conservative camp in late 1954 when they shifted support from Yoshida's Liberals to Hatoyama's Democrats. The business community had been vigorously criticized for their behavior in the corruption scandals of 1954 concerning subsidized shipbuilding, and Keidanren's Uemura Kogoro became convinced that unless order was restored to political finance, the conservatives would lose public trust and the left would be free to attack business from a position of great strength. Thus, in early 1955, in an effort to establish what he referred to as an "insurance policy for the maintenance of a free economy," Uemura inaugurated an "Economic Reconstruction Group" (Keizai Saiken Kondankai) "to clean up and consolidate" political funding.7 Keidanren would try to short circuit the direct links between firms and politicians that invited corruption by collecting and distributing funds centrally, through a single channel. Two contemporary journalists referred to Uemura's Keidanren fund as "Kishi's piggy bank."8 With the new, somewhat more transparent, distribution system in place, Keidanren reissued its appeal for consolidation of the conservative parties in May.

Nor was the government of the United States idle. In August 1955, with then Democratic Party Secretary-General Kishi Nobusuke present, Dulles told Foreign Minister Shigemitsu Mamoru that the U.S. had a strong interest in the consolidation of the conservative camp; he may even have made further U.S. support conditional on its coming to pass. Dulles reportedly told Shigemitsu that-- like the zaikai -- the U.S. government was constantly getting requests from Japanese politicians for financial assistance, and that it found it difficult to respond. "If, however," he reportedly said, "the Japanese government can unify, we will certainly be in a position to help even more than we have (to date)." Dulles explained that the United States wanted a strong Japan to help it contain communism and clearly thought that a strong Japan required a unified center-right political organization.

The mutually mistrustful conservative Japanese politicians were feeling the pressure from all sides, and it was Kishi who first moved to take it all in hand. He convened at least ten meetings, and the discussions frequently stalled over fundamentals: Were they aiming merely for cooperation? Or did they seek full consolidation? And on whose terms? Would the Liberals be humiliated and forced to join the Democratic Party, or would a new party be created? Kishi pressed for the latter. After a summer of protracted negotiations, the Socialists inadvertently broke the logjam. Their consolidation in October 1955 led to acceptance of Kishi's complicated "proxy system" (daiko iinsei) for selection of a new party president, and to the formation of the Liberal Democratic Party one month later, under the nominal leadership of Hatoyama Ichiro.

Kishi felt he could maximize his own chances at a future premiership by refusing a government post in the cabinet and instead reserving for himself the party position of secretary-general. He already had the knowledge, experience, and financial resources that a cabinet post would have bestowed, and now, as party secretary-general, he would be responsible for all decisions about formal party endorsements and campaign funding. He knew that he was distrusted by many former Liberals, and saw in this post the chance to circumvent their animosity by making each LDP candidate dependent on him. In its first test, the LDP won an absolute majority of seats in the Diet, a position it would maintain for two decades.

Revising the Security Treaty

The announcement in 1947 of the Truman Doctrine marked the turning point when the United States no longer cared as much about democratizing Japan as about anti-communism. Yoshida gave it his enthusiastic support, but Kishi would carry it even further, pressing for changes in education, police administration, and, above all, the Constitution. Once the LDP was returned to power in the June 1958 election, the Kishi government moved vigorously to amend laws related to national defense-- including the basic laws that established the Self-Defense Forces and the Defense Agency-- with the result that the number of Japanese uniformed soldiers increased by 10,000 men. Concerned that the teachers were too sympathetic to communism, the Kishi government also introduced legislation to force public schools to provide moral education and to implement a system to evaluate the teachers.

However, Kishi's efforts to revise the Police Law and amend the Constitution led to failure. The former-- submitted without prior notice-- was widely interpreted as giving the police prewar levels of power. The new legislation-- drafted after secret consultation with the Public Safety Commission-- would have enabled the police to conduct searches and seizures without warrants in order "to maintain public security and order" and to prevent crimes.9 Kishi's proposals had to be abandoned in face of protests by both the left (Sohyo called a general strike) and from within the LDP. Three members of Kishi's Cabinet resigned to protest his bill to increase and centralize police power. His effort to revise the Constitution, which he undertook even before the 1958 election, dragged on interminably, and was finally abandoned by Prime Minister Ikeda Hayato in favor of a "low posture" in the wake of the tumult over the Security Treaty revision in 1960.

The revision of the U.S.-Japan Security Treaty (known as the Ampo in its Japanese abbreviation) is widely understood as Kishi's greatest politicallegacy. For his supporters it stands as his "monument." For his detractors, it stands as evidence of his unreconstructed authoritarianism. Viewed either way, it clearly was a turning point in conservative hegemony, as the LDP rejected Kishi's leadership and turned away from a focus on foreign affairs toward high speed growth. Kishi's enemies on the left were no less determined than his enemies within the LDP itself, many of whom preferred to see the revision fail than to see him retain power.

To proud nationalists, Ampo was yet another "unequal treaty." While the United States expected Japan to increase its defense capabilities, it had also handcuffed it to an immensely popular Article Nine that renounced the use of force as a sovereign right of the state. U.S. troops were allowed to quell domestic disturbances even after the end of the Occupation, and could prevent the use of Japanese bases by any other power. The political right was encouraged by the establishment of the Self-Defense Forces in 1954, but it was not satisfied that this would suffice without Constitutional revision and a change in the terms of the treaty with the United States.

Once it was clear that the former was out of reach in the short term, revision of the treaty became the main item on Kishi's agenda. After securing agreement with the United States, Kishi battled forces within his own party, squared off against a popular left, and had to contend with the largest mass demonstrations in modern Japanese history. The Americans were easier to deal with. The United States was more than willing to change the terms of the treaty, and through secret side agreements was able to protect those privileges-- such as the transport and introduction of nuclear weapons-- that it most cared about. Nor did the United States even have to agree to return Okinawa to Japanese sovereignty for another decade. But the Japanese public was another matter. In June 1960, hundreds of thousands of demonstrators surrounded the national Diet building in central Tokyo. They forced Prime Minister Kishi to cancel a scheduled visit to Japan by President Eisenhower, for what he had hoped would be his crowning achievement as an international statesman. A week later, after forcing the treaty bill through the Diet without debate and without the opposition present, Kishi abruptly announced his resignation.

The Public Face of Political Finance

Business disillusionment with Kishi's leadership was already widespread by the time he was ramming the revised Security Treaty through Diet. Business leaders in Tokyo and in local LDP branches were calling for his resignation as a way to restore political stability. While Kishi claimed that "the business community was not divided" in its support for him, Keidanren (and Uemura) had abandoned him in favor of the less controversial Ikeda. Of the major business interest groups, only the Nikkeiren stood by him throughout the crisis.

Keidanren's political influence was threatened. By 1960 Uemura's "Economic Reconstruction Group" accounted for some sixty percent of all reported political contributions. He had assembled more than 120 firms and seventy industry groups to make contributions. While the Group gave funds to each of the other parties (except for the Communists), more than ninety percent went to the LDP.10 The problem from Uemura's perspective was that this was only a part of the total funds flowing from business to the LDP. He was clearly frustrated by how many uncoordinated requests came from politicians to businessmen. The bigger problem was that Keidanren's contributions were a declining part. Kishi had unleashed factional competition for funds and undermined Keidanren's efforts to consolidate the process by actively seeking to broaden the LDP's dependence beyond Keidanren.

Two tracks had developed for business support of conservative Japanese politicians. On the one hand, there was the formal track of Uemura's single channel and the "Hanamura List," i.e., the preferred recipients on the list maintained by Uemura's chief assistant. Uemura and the Keidanren wished to fund only the party, and insisted that their contributions be earmarked for election campaigns. These funds were fully legal and reported.This single channel also provided firms with an excuse to decline direct requests from the party and from politicians. They could claim they had given all they were capable of giving. On the other hand, internal campaigns among faction leaders to determine the party presidency were becoming even more critical to the politicians-- and ever more expensive. That the Keidanren did not want its funds to be used to support factional infighting was immaterial. Factional considerations came to dominate most LDP stratagems-- and the factions needed money. Kishi creatively turned to the non-Keidanren business class. Theoretically, Keidanren became the source of "clean" funds and other sources were found for factional support.

Kishi's strength was that he knew how to suck money from both pipes. He was undeterred by complaints from Keidanren about the escalating demands of LDP politicians. One of Kishi's political secretaries explains: "Individual politicians and individual faction leaders were all going to the same businessmen for money. The competition got so intense that some of them made direct promises to the businessmen. It wasn't `dirty' money exactly, but the business leaders did want to avoid giving `inconvenient' (guai ga warui) and `strange' (henna) money."11

Under Kishi's leadership, LDP factions were first institutionalized as separate entities to compete for seats in Diet, for party endorsements, for the presidency of the party, as well as for the business funds that would make each possible. They became the leading object of political fund-raising. Kishi resorted to the frequent reshuffling of his cabinet as a way to balance factions and to rotate needy politicians through the high rent district of ministerial real estate. Rather than replacing individual ministers, as Yoshida had done, Kishi changed entire cabinets in order to spread the wealth. His successors, starting with Ikeda Hayato, took the idea even further, and routinely changed cabinets on an annual basis. As a result, Keidanren was not the only organized business group being hit up by politicians in search of, in Hanamura Nihachiro's words, "the money from which sprout the wings that let us fly."

There was little Uemura and the Keidanren could do. Uemura explained that:

"It takes money to run a party-- staff, meetings, study. But parties do not have their own source of funds. Someone has to give it to them. The same is true at election time. There are fees for filing for candidacy, costs for speech meetings, publications, and so forth. . . . Instead of giving separately to each faction member, we think it better to give to the party headquarters. Then again, there are still a number of businessmen who give funds directly to individual politicians; we cannot control this."12

But Uemura certainly tried. Under pressure from the other business interest groups, especially the Keizai Doyukai, which protested the misuse of their funds for factional purposes, Uemura abolished the Economic Reconstruction Council and replaced it, in March 1961, with a higher sounding "Citizens' Association" (Kokumin Kyokai). The purpose of the reorganization was to broaden the sources of conservative party support to include money from small and middle size companies and individuals as well as large companies.

Kishi was not invited to speak at the inauguration of this group, while his successors-- and rivals-- displayed the LDP's "kinder, gentler" face to the Japanese public. Ikeda Hayato, the new prime minister delivered a speech at the inauguration of the new Citizens' Association in which his references to-- and disdain for-- Kishi's practices were barely veiled: "Ever since I became Prime Minister in the midst of the uproar surrounding the Security Treaty crisis, I have not been able to keep the issue of `correct political posture' out of my mind. . . . Our LDP, on its own, has reflected about political finance and factional problems, as well as about the way in which we connect to the people. We have come up with a major new program-- shedding our old practices in name and in fact, as a modern party." But skins are not so easily "shed," certainly not this one.

As Jacob Schlesinger puts it, "Two distinct classes of leadership evolved in the LDP in the 1950s and 1960s, the bagmen and the statesmen."13 Kishi wanted to be recognized as one of the latter, but was not averse to playing the former. Kishi himself offered the bluntest assessment of Japanese money politics. A half decade earlier, during the battle for control of the party in 1957, he had been attacked by Ishii Mitsujiro, formerly of the Liberal Party, for raising dirty money. Ishii remarked of Kishi that "no matter how tightly you seal a bucket of shit, you still can't put it in the tokonoma (place of honor in a Japanese home)." Years later Kishi commented on the charge that "there are plenty of buckets of shit to go around."14

There was a sharp increase in funds consumed by the LDP after Kishi became Prime Minister. Kishi recalls confidently (and with decided understatement) that he was not without resources and contacts upon which he could call during his rise to power: "Among business leaders at that time, I was closest to Fujiyama Aichiro, the Chairman of the Japan Chamber of Commerce and Industry, and to Uemura Kogoro at Keidanren. Because I was at the Ministry of Commerce and Industry for so long, I had connections with businessmen in Osaka, Nagoya, other local areas, and was relatively well known all around." Kishi's power to collect political money resulted from his experience in MCI, especially when he was in Manchuria. The staffs at Keidanren and at the Japan Chamber of Commerce and Industry (Nissho) were filled with retired officials of MCI and the wartime control companies that Kishi had organized and supervised. Collectively they were called "Kishi's savings banks" (Kishi no chokinbako).

Those who did not go to these business interest groups remained in industry where they were also in a position to help him. In particular, a great many former bureaucratic subordinates of his had "descended from heaven" (amakudari) into the steel industry, which was under strong governmental control both before and after war. Yawata and Fuji Steel donated much more political money to Kishi than did any other companies. It was only after Kishi formed his first cabinet that he began to attract funds from some of the more elite trading companies, such as Mitsubishi and Mitsui, and from manufacturing firms such as Sumitomo Chemicals. But even then, his relationships to them were dwarfed by his relationships to the non-zaibatsu companies such as Nissan, Marubeni, and Ito Chu, relationships that had been cemented in Manchuria two decades earlier.

The nature of these connections-- and others-- nurtured so long and so diligently, allowed Kishi to exploit a number of alternative sources of political funding. Realizing that official Keidanren money could not be used to support either his faction or other factions during party presidential elections, he devised different means of raising money. He moved closer to small and medium sized firms (SMEs) through his former Manchukuo ally, Ayukawa Gisuke, who had been made head of the leading SME association upon his release from jail.

While Tanaka Kakuei, Kishi's successor as the party's greatest "bagman," elaborated broadly on this basic model, it was Kishi who opened the door to alternative sources of political funds and who originated the most sophisticated money laundering operation in Japanese politics. His "filtering apparatus" (roka sochi) has attracted a great deal of attention, but it is more important to understand how Kishi built what one of his biographers, Hara Shinsuke, has called an "exquisitely institutionalized" system of money politics in Japan. This system took at least three forms, each of which is close to impossible to document adequately but each of which also had important institutional ramifications for Japanese politics. Each is associated with the less reputable aspects of LDP dominance, which were nonetheless as real and as important as any of those pioneered by Yoshida Shigeru. Some of them, of course, intersected repeatedly and deeply with Yoshida's mainstream. Together they constituted important and only dimly understood resources of the "1955 System."

Using American Money

Kishi brilliantly exploited American paranoia about communism during the Cold War. The historian Michael Schaller reports that Ambassador Douglas MacArthur II convinced Secretary of State John Foster Dulles that the United States had to support Kishi or risk losing the alliance. Kishi returned triumphant from his June 1957 visit to Washington with promises that the security treaty would be revised and, possibly, with promises of secret funding from the Central Intelligence Agency. There have been rumors for decades about a secret "M-Fund" that was constructed out of surplus military materiel that came under allied control at the war's end in 1945. These stockpiles allegedly included rare metals and diamonds, proceeds from the sale of which were used by General Marquat, chief of SCAP's Economic and Science Section (hence "M"-Fund) as a sort of Japan-specific secret Marshall Plan to stimulate the postwar Japanese economy. The Fund was probably also used to underwrite the sudden (and unbudgeted) formation of the National Police Reserve at the start of the Korean War and to buy conservative politicalsupport for the alliance with the United States.

According to journalists, M-Fund disbursements went to two channels. One was to mainstream conservatives led by Yoshida Shigeru. A separate channel was purportedly opened to Kishi Nobusuke to help sustain the anti-mainstream group. Both were allegedly managed jointly with U.S. officials. Former U.S. Assistant Attorney General Norbert Schlei alleges that Vice President Nixon turned over exclusive control of the M-Fund to Kishi (presumably during their 1957 Washington meeting) and that this was when things changed: "Beginning with Prime Minister Kishi, the Fund has been treated as a private preserve of the individuals into whose control it has fallen. Those individuals have felt able to appropriate huge sums from the Fund for their own personal and political purposes. . . . The litany of abuses begins with Kishi who, after obtaining control of the fund from (then Vice President Richard) Nixon, helped himself to a fortune of one trillion yen. . . . Kakuei Tanaka, who dominated the Fund for longer than any other individual, took from it personally some ten trillion yen. . . . Others who are said to have obtained personal fortunes from the Fund include Mrs. Eisaku Sato . . . and Masaharu Gotoda, a Nakasone ally and former chief cabinet secretary."15

All, some, or none of this may be true, but we know for certain that Kishi and his brother Sato Eisaku frequently approached Ambassador MacArthur to play the anti-communist card in the hope of securing financial support. According to Kishi's own account, he frequently used the good offices of his friend, Harry Kern, a former Newsweek Bureau Chief, to make arrangements for him at the U.S. embassy in Tokyo.16 Declassified U.S. State Department records note efforts by Sato, then Kishi's Finance Minister, to seek U.S. funds "to combat extremist forces." In July 1958, Sato met secretly with one S. S. Carpenter, the First Secretary of the U.S. Embassy. According to Carpenter's declassified memorandum of a conversation on July 25, 1958, Sato explained that a "secret organization (of) top business and financial leaders" had been established by the LDP and that this group had "contributed heavily" to the recent electoral campaign. Sato explained that they would shortly have to return to these business leaders for an expensive upper house campaign and felt that the LDP and the zaikai could not "combat communism" alone. If there was already an M-Fund to cover these requests, Carpenter did not let on. He told Sato that the Ambassador "had always tried to help Mr. Kishi and the Conservatives in every way possible,"but he declined to authorize the funds Sato was seeking. In short, it is plausible but not yet demonstrable that Kishi Nobusuke played a central role in establishing a financial relationship between conservative Japanese politicians and the government of the United States.

Public Resources

Now that the archives of the Ministry of Foreign Affairs have been opened for this period, we have a better understanding of how Kishi pioneered an equally intriguing-- and equally corrupt-- alternative source of political funds. He systematically employed government programs to generate business for political supporters and that, in turn, probably generated substantial kickbacks for himself and his faction. This "public resources" model opened a new and lucrative avenue for political finance. Tanaka Kakuei significantly expanded and deepened it to the point that it became the archetypal form of structural corruption in the 1955 system. Tanaka actually once bragged that he got his first cabinet post by giving Kishi a backpack stuffed with three million yen in cash.17

Kishi saw and seized a splendid opportunity that Yoshida had dismissed out of hand by addressing the demands of Japan's Southeast Asian neighbors for reparations after the Pacific War. At first acting on behalf of the Hatoyama government and then on his own account, Kishi negotiated reparations agreements with Burma, Thailand, the Philippines, Indonesia, and Cambodia. Yoshida had stalled all negotiations over reparations and criticized foreign aid, saying, "You have to trade with rich men; you can't trade with beggars."18 The Ministry of Foreign Affairs had followed Yoshida's lead, promising little and dragging out negotiations interminably.

Kishi was far more creative. He showed Japanese politicians that one could not only trade with beggars but also enrich oneself and one's allies at the same time. His innovation was deceptively simple. Kishi noted the language in the various peace treaties allowing reparations to be paid "in the form of capital and consumer goods produced by the Japanese industries and services of the Japanese people," and he made sure that his business supporters would be the companies that supplied the goods and services. Kishi also increased the amounts being offered in reparations to the southeast Asian countries as a way to direct even more public resources toward Japanese industry. Kishi's pioneering use of Indonesian and Korean aid seems to have inspired Tanaka Kakuei, who later took up the technique and applied it to China, as well as Nakasone Yasuhiro, who expanded the practice elsewhere in the region.

The most visible and controversial example of the early use of reparations for political finance was a contract let in February 1958 to the KinoshitaTrading Company for providing ships to the Sukarno government in Indonesia. Kinoshita Trading was run by Kinoshita Shigeru, who had been a metals broker in Manchuria before the war, where he had forged close ties to Kishi. When Kishi returned to Japan in the late 1930s, Kinoshita also did so and was placed in the Iron and Steel Control Company, where he established close relationships with Nagano Shigeo of Fuji Iron and Steel and Inayama Yoshihiro of Yawata Steel, both of whom became enormously influential business leaders in the postwar zaikai.

There was nothing subtle about these relationships. When Kishi was released from prison in December 1948, Kinoshita promptly made him president of his trading company, a nominal post Kishi held until he was de-purged and could return to politics. Much to the chagrin of the established firms in the industry, Kinoshita Trading won the first reparations-based contract for Indonesia even though it had never dealt in ships before. According to the declassified records, when Indonesian Foreign Minister Soebandrio visited Japan in April 1958, Kishi told him that he would appreciate the Indonesian government's awarding ship contracts to Kinoshita Trading. The deal was investigated and roundly criticized in the Diet and the press, but Kishi escaped unscathed. In addition, Kinoshita won overseas contracts for office buildings, machinery factories, and hotels, making it the largest recipient of reparations contracts among Japanese firms. By 1964, when it went bankrupt, Kinoshita Trading was Japan's seventh largest trading firm.

The large and prestigious trading houses were shut out of this early business in Southeast Asia using reparations funds. The winners were all non-zaibatsu independents like Kinoshita that had special Manchurian ties to Kishi and to other non-"mainstream" factions. The two other businessmen of the so-called "Indonesia trio"-- Ayukawa Gisuke and Matsunaga Yasuzaemon-- who went there in the mid-1950s to examine the prospects for resource development also were linked to Kishi's Manchurian program. No complete list of contracts for reparations has ever been published, but a 1968 MITI report showed that Kinoshita Trading had the largest share, followed by Nippon Koei, run by a former Manchurian economic planner under Kishi, and Ito Cho (C. Ito), in which a former Kwantung Army officer, Sejima Ryuzo, was a rising star (he later became chairman of Ito Chu).19 A fourth major winner was an unknown firm called Tonichi Trading, whose board members included Kishi's factional rival, Kono Ichiro, as well as their mutual ally, the mob-connected Kodama Yoshio.

The system worked in much the same way as it did with domestic contractors for local projects but involved many fewer competitors for use of the funds. Also, because there was no open bidding, it required less widespread domestic collusion and cartellization (dango) and fewer compensating transfer payments. In 1957, Kishi institutionalized the program by establishing an "Overseas Economic Cooperation Fund" to distribute reparations and, later, foreign aid (i.e., official development assistance or ODA) through contracts let to favored trading companies. The system involved collusion among LDP politicians, the aid recipients, and conservative business interests in Japan. Nishihara reports that the reparations payments involved "large sums of money," much of which ended in the pockets of high ranking Indonesian officials who "were given a cut from (inflated) profits." The Diet never enacted a basic law to establish guidelines and regulate either the reparations programs or the larger ODA program that derived from it. Each time legislation was proposed, the bureaucracy and segments of the LDP strongly opposed it.

Kishi's exploitation of public resources was a prototype for the even more aggressive Tanaka Kakuei. During the decade of Japan's phenomenal high-speed growth in the 1960s, Tanaka built what he called a "general hospital" to take care of his constituents, faction members, and himself. Resources were generated in a variety of ways. One he developed when he was the Minister of Finance in the Ikeda cabinet was to confiscate unclaimed property, which he would then arrange to sell to associates for a consideration. Another was so-called "land flipping" whereby a dummy corporation controlled by Tanaka or his family would buy under-priced stock to be resold at market prices for a large profit. The firms they bought and sold would incur large paper losses due to inflated expenses while they were stripped of cash. More important were those firms, much like those that cooperated with Kishi's reparations program, that benefited from Tanaka's inside knowledge of (and control over) the location of new public works projects.

Construction and real estate companies associated with Tanaka made vast fortunes from public spending on railroads, schools, and other infrastructure. They exchanged privileged access to government contracts in return for kickbacks based on the value of contracts received. Tanaka's famous "Plan for Remodeling the Japanese Archipelago," was essentially a blueprint for personal and factional enrichment once he took office and controlled the Construction and Transportation Ministries. Eventually, Masumi argues, in the process of amassing a personal and factional fortune, Tanaka even emptied the LDP's safe.20 This may help explain why he was the only senior postwar Japanese politician to be prosecuted without political intervention.

The man who could have intervened to block the Lockheed bribery case (in which Tanaka was indicted) but chose not to, was Miki Takeo. Miki had been anointed prime minister by Kishi's former disciple and comrade, Shiina Etsusaburo. It was widely expected that, like Yoshida before him, Miki would invoke Article 14 of the Public Prosecutor's law and put an end to Tanaka's prosecution. But the irascible Miki refused to accommodate the LDP elders. Instead, he proposed to abolish all corporate contributions to politicians. Although the leaders of the LDP were unable to force him to block Tanaka's prosecution (assuming that they wished to do so), they did succeed in eviscerating his reform proposals. The reform, which shifted from a system of "a few sources of large sums" to "lots of sources of small sums" had as many loopholes as it had teeth-- and even legalized some formerly illegal conduits of funds. So it remained business as usual under the "1955 System."

Keidanren was dismayed by the failure of its efforts to introduce reforms. At his first press conference in May 1974 as he took office as Keidanren Chairman, Doko Toshio made a startling announcement to an unsuspecting audience: "The LDP should be based on its party members and supporters, and it is strange for it to be based on commercial firms. If firm managers wish to support the LDP, they should join a citizens' association on an individual basis. In general, there is something wrong with Keidanren's having the role of collecting political funds. In the course of time, I want to go about correcting this somehow.21

Doko correctly anticipated what was ahead. In the July 1974 upper house elections, after Keidanren had provided Tanaka and the LDP with a 30-billion-yen war chest, an LDP majority was barely achieved. Doko was so annoyed by Tanaka's profligacy that he demanded political reform. The electric power and gas utilities refused further political donations as well. It looked as if the 1955 system of political finance-- or at least the visible Keidanren track-- had hit the wall. Doko announced that Keidanren was ceasing immediately to collect political funds for the Citizens' Association, and that it was firmly in support of political reform. He declared that the LDP's faction system was the source of much of the problem; firms would have to make contributions to political parties directly, and Keidanren would exclude from its ranks any firm that was found to have contributed to a faction.

It sounded good, and it played well in the press and the court of public opinion, but, "the system" still had legs. Doko ran into stiff opposition from within the business and political communities. Nagano Shigeo, head of the rival Japan Chamber of Commerce and Industry (and a former close associate of Kishi Nobusuke), called him a "damn fool" and refused to cooperate. Within the LDP, anger at Doko was so great that no one from the Miki cabinet (despite the "clean Miki" image) attended Keidanren's 1974 annual councilors' meeting-- an unprecedented snub.

Doko gamely pressed on. Keidanren formed a committee to study the "modernization" of political funding, but advocates of reform were worn down by demands from the politicians. After a year, the committee's two main recommendations were a gradual transition from Keidanren's collection of political contribution to firms' making their own contributions and an "increased transparency" by renaming the Citizens' Association the Citizens' Political Association (Kokumin Seiji Kyokai) and publishing the amounts of funds distributed to political organizations. The best they could do was to return to a Kishi-era common pool of funds. A year after his remarkable press conference, Doko was out making the rounds of companies and collecting political contributions. Despite severe cost-saving measures adopted after the drop off in contributions during 1974, the LDP had accumulated an operating debt of ´5 billion. Keidanren managing director Hanamura Nihachiro quietly collected contributions from members and paid off the debt.

Thus, after a short interlude of withheld contributions, Keidanren's support for the LDP was stronger than ever. Even the reported contributions tripled over the next decade, and the number of political organizations receiving donations increased from under 2,000 to nearly 5,000. There was no increased mobilization of the electorate, just a new set of rules that allowed politicians to establish as many as fifty separate paper organizations as recipients of funds.

Two important consequences of this failure were that factional competition grew more intense and the locus of competition for funds devolved to the level of individual politicians. By the late 1980s, every conservative politician with national aspirations was desperate to secure a corporate backer. As significant as they were, "public resources" alone were not sufficient. There was thus a return to the use of inside information, but at a much higher price than in the days of the shipbuilding scandal. Voracious parvenu businessmen embraced equally voracious politicians. Hanamura Nihachiro, who ought to know as well as any other principal, estimates that at a minimum it now took three times more money than Keidanren distributed to run a political campaign. Japan was in the midst of its "bubble economy," and money was demanded by and flowing to politicians from every direction.

This came to a head in the "Recruit Scandal" of 1989 in which more than forty politicians-- including virtually every ranking LDP official from Prime Minister Takeshita to former prime Minister Nakasone, Finance Minister Miyazawa, and Party Secretary-General Abe-- were named by prosecutors as having received and profited from "pre-floated" shares of stock in a new company, Recruit Cosmos. The president of the upstart firm, Ezoe Hiromasa, leaving no political stone unturned, also provided shares to the chairman of the Democratic Socialist Party, to several Socialist Party members, and to the president of the Nihon Keizai Shimbun newspaper, the chairman of NTT, and senior bureaucrats in the Education and Transport Ministries. Kishi's "filtering apparatus" had been supplanted by recklessness. There were twelve indictments, but only two were politicians. The others fell from power but climbed back up in short order. Miyazawa became prime minister, Takeshita became king-maker within the party's largest faction, and Nakasone resumed his role as respected party elder. Once again the political world was under pressure to reform politics, and once again, the institutions of the "1955 System" would prove resistant to change. Recruit ended with a whimper, the prosecutors backing away, indicating that they still feared political intervention more than public anger.22

Kuromaku and the Underworld

As poorly documented as the M-Fund and its transformation into "public resources" are, there is still an even more difficult (and likely more consequential) aspect of Kishi's political activities-- his relationships with ultra-nationalists and the underworld. His connection to them is through two of the most controversial figures in twentieth century Japanese politics-- the political "fixers" (kuromaku) Sasakawa Ryoichi and Kodama Yoshio. Kishi, Sasakawa, and Kodama are tied together by their prewar and wartime activities and, most directly, by the fact that they were cellmates for three years in Sugamo Prison, where they allegedly concocted a plan for mutual assistance.

Kodama Yoshio (1911-1984) cast a ubiquitous shadow over many of the less pleasant aspects of pre- and postwar Japanese politics. After serving time in jail for plotting the assassination of leading prewar business and party leaders, he spent the war years in China where he procured strategic materials for the military. The activities of his "Kodama Agency" reportedly included drug trafficking, smuggling, and black marketeering. War profits made Kodama a personal fortune, which he was quick to turn to political advantage. He was said to have been released from Sugamo prison after making a deal with the occupation authorities to work for U.S. intelligence. Upon his release he served on the board of the National Council of Patriotic Societies, an umbrella group for more than 400 rightwing and underworld groups, some of which he mobilized to assist the Occupation in combatting labor demonstrations. He is also credited with providing the funds to create Hatoyama's Liberal and Democratic Parties.

Kishi first called upon Kodama, whose modus operandi, according to Jacob Schlesinger, "was blackmail, intimidation, and violence," to provide protection for Indonesian president Sukarno during the latter's visit to Tokyo in early 1958. The Tokyo Metropolitan Police had refused to help on grounds that it was a personal, rather than an official visit. Kishi again called upon Kodama in 1960 to use his gangland connections to battle student demonstrators and to help the government protect President Eisenhower during his aborted Ampo visit. Kodama's connections with U.S. intelligence also may have provided his entrZ&Mac255;e to the Lockheed Aircraft Corporation, which used him twice as its "representative"-- once in the successful effort to convince Prime Minister Kishi to select the Lockheed F-104 over the Grumman F-11 fighter favored by the Air Staff of the Defense Agency and again in the successful effort to convince Prime Minister Tanaka to intervene with All Nippon Airways to buy the Lockheed 1011 jumbojet. In the first instance, the charge of bribery was never proven-- or even prosecuted-- while the second brought down the Tanaka government.

Sasakawa Ryoichi (1899-1995) was the more complex of the two Kishi-era kuromaku. Drafted into the Imperial Navy as a pilot in 1918, Sasakawa returned home after two years of service to expand the family fortune by speculating in rice futures. He later turned his energies to rightwing politics, possibly including membership in the violent Black Dragon Society. In 1931, Sasakawa used his own resources to establish the National Essence Mass Party (Kokusui Taishuto). His 15,000 party members, one of whom was Kodama Yoshio, wore black shirts and modeled themselves on the Italian fascists. Sasakawa was a maverick. He controlled a small independent air force of twenty-two airplanes, which he made available to the Navy for training, and took it upon himself to airlift supplies to the Japanese troops after the 1931 Manchurian incident. Later he was arrested for alleged plans for "patriotic violence," including plots against the prime minister and other government officials. After spending two and a half years in jail (1935-1938), he flew one of his planes to Rome to meet Mussolini. On the eve of the Pacific War, Sasakawa introduced Kodama to Imperial Navy officers seeking a private organ for materiel procurement in China. Sasakawa claimed credit for the creating the "Kodama Agency."23 During this period, he spent considerable time in Shanghai with Kodama where they bought mines and sold minerals to the military. They are alleged to have plundered millions of dollars worth of Chinese gold, diamonds, and other rare minerals. According to one account, Kodama shipped vast quantities of precious metals to Japan at the war's end, a portion of which was stored in warehouses rented by Sasakawa.

Sasakawa formally entered politics with a successful run for the Diet as an independent in the 1942 Yokusankai election. Although a vigorous critic of the Tojo Cabinet, in which his postwar ally, Kishi Nobusuke, served, Sasakawa was an ardent supporter of Kishi throughout his tenure in the wartime Diet. He joined the Gokoku Doshikai, the group of Diet members organized to try to make Kishi prime minister. After Japan's surrender, Sasakawa continued to be active in politics. Alarmed at the prospect of the collapse of the Emperor system and the advance of communism, Sasakawa entered into negotiations with a wide cross section of leading politicians in an attempt to create a new "Japan Mass Party." Various accounts trace the seed money for this effort to funds generated from the sale of Kodama Agency loot. When this effort failed, Sasakawa threw his support behind Hatoyama's Liberal Party, but his postwar political career was cut short by his arrest and imprisonment as a war criminal.

Sasakawa ultimately proved adept at building and wielding financial and political influence under the changed conditions of the postwar period. After his release from prison in 1948, he began to promote motorboat racing as a form of legal gambling in Japan. Working with cellmates Kishi and Kodama to cultivate political support-- some of which came from former Taishuto comrades now in the postwar Diet-- Sasakawa in 1951 won Diet approval of a Motorboat Racing Law. This law granted him monopoly control over this form of legalized gambling throughout Japan. Seventy-five percent of all the gambling revenue was to be returned as pari-mutuel winnings to gamblers, ten percent would go to the local governments where the race courses were located, 11.7 percent was earmarked for the Motorboat Racing Association, and 3.3 percent went to Sasakawa's Japan Shipbuilding Industry Foundation. By 1962, when Sasakawa effectively became the permanent chairman of the Foundation-- once again with Kishi's help-- he personally controlled both the Association and the Foundation. He installed Kodama as head of the Tokyo Motorboat Racing Association and used the revenues-- more than $8 billion annually by the early 1980s (as estimated by Forbes, June 20, 1983)-- to build a financial and philanthropic empire rivaling the greatest foundations in the world.

In addition to directing the flow of vast sums legally earmarked for philanthropic endeavors to organizations controlled by himself and his family, Sasakawa expanded his personal fortune by leveraging his gambling monopoly to gain control of virtually all businesses associated with the motorboat racing circuits. In later years, he also began to cultivate foreign charities, many associated with the United Nations, in order to bolster his openly aggressive bid to win a Nobel Peace Prize-- a pursuit that, in the end, eluded him. In 1990, the Japan Shipbuilding Industry Foundation changed its name to the Sasakawa Foundation, and after his death in 1995, to the Nippon Foundation. In 1978, the Emperor of Japan awarded Sasakawa the nation's highest honor, the "First Class Order of the Sacred Treasure."24

Needless to say, Sasakawa Ryoichi continued to use his financial weight to pursue a political agenda, much of it involving the nurture of conservative politicians. By the late 1980s, his foundation listed some fifty-five Diet representatives who had received "support for their districts," most notably including the once and future prime ministers Nakasone Yasuhiro, Hashimoto Ryutaro, and LDP faction head, Kato Koichi.

Sasakawa built "sports clubs" and other facilities in the districts of friendly politicians. He gave "gift vouchers" to Transport Ministry bureaucrats for golf outings, and it is widely assumed that Sasakawa's influence was routinely used to shield favored public officials and politicians from the law. Sasakawa never again ran for public office himself but pursued his political ambitions vicariously, promoting the political careers of Sasakawa Takashi, his second son, and Itoyama Eitaro, his business associate and a former secretary to Nakasone Yasuhiro. Although the junior Sasakawa originally ran unsuccessfully as an independent, backed by Sasakawa's immense financial resources, both Takashi and Itoyama went on to serve in the Diet as members of the LDP. In 1993, financial disclosure documents revealed that Sasakawa Takashi was the wealthiest member of the Japanese Diet (Mainichi Shimbun, June 14, 1993). Thus equipped with several levers of political influence, Sasakawa publicly boasted of his role as a powerful political insider and key figure in the succession struggles that led to the governments of Kishi Nobusuke, Sato Eisaku, and Tanaka Kakuei.

Another aspect of Sasakawa's postwar political agenda, anti-communism, dovetailed neatly with his efforts in conservative politics. Working closely with Kishi, he cultivated relationships with other anti-communists throughout Asia. In the mid-1960s, this brought him into contact with the Reverend Sun Myung Moon, founder of the Unification Church.25 In 1967, Sasakawa invited the Unification Church to use his motorboat racing center in Yamanashi prefecture for its first rally in Japan. The following year, three months after the Reverend Moon established his "Federation for Victory over Communism" (Shokyo Rengo) in Korea, Sasakawa agreed to become its honorary chairman in Japan. Kishi was impressed by the Federation, suggesting that "If all younger people were like Shokyo Rengo members, Japan would have a bright future." In this way, Sasakawa and Kishi shielded what would become one of the most widely distrusted groups in contemporary Japan.

Although loathed and feared for its alleged kidnappings and mind control of young Japanese, the Unification Church proved (and may still prove) to be of incalculable benefit to many Japanese politicians. It built its Japan headquarters on land in Tokyo once owned by Kishi. By the early 1970s, a number of LDP politicians were using Unification Church members as campaign workers. While the politicians were required to pledge to visit the Church's headquarters in Korea and receive Reverend Moon's lectures on theology, it did not matter whether they were members of the Church. Actual Church members -- so-called "Moonies" -- were sent by the Federation to serve without compensation as industrious and highly valued campaign workers. In return, for many years the Church enjoyed protection from prosecution by Japanese authorities for their often fraudulent and aggressive sales and conversion tactics. Not incidentally, by the 1980s, Japan reportedly provided some four-fifths of Unification Church revenues worldwide.26

Over time, the Kishi and allied factions transferred the Kishi-Sasakawa-Moon link to other party leaders. In 1974, Fukuda Takeo, the direct inheritor of the Kishi faction, praised Reverend Moon as "one of Asia's great leaders," while Nakasone Yasuhiro, the youngest member of the Kishi Cabinet and scion of the allied Kono faction, similarly honored Moon. Abe Shintaro, Kishi's son-in law and inheritor of the faction from Fukuda, also depended upon "Moonies" in his election campaigns. A list prepared by the Japan Communist Party of 126 LDP and DSP politicians who used "volunteers" from the Federation for Victory over Communism to staff their campaigns includes Ozawa Ichiro, Hashimoto Ryutaro, and other senior party leaders. In the 1990 general election, the Unification Church announced that it had provided financial and campaign support to more than one hundred Japanese Diet members. As a measure of the influence Moon enjoyed in Japan, in 1992 the government gave him special permission to enter the country even though Japanese law forbids entry to a foreign national who has served more than year in jail. Moon had served eighteen months in U.S. jail for tax evasion and had been barred from entering Japan on these grounds for nearly a decade. In March 1992, Kanemaru Shin, vice president of the LDP and the head of the largest faction within the party, intervened on Moon's behalf with the Minister of Justice.

Since the management of all other forms of legal gambling in Japan had been entrusted to public organizations, Sasakawa's private control of the gambling receipts from motor boat racing was difficult to justify and vulnerable to reform efforts. In addition, the "Sasakawa Empire" was a tempting target for political opportunists hoping to seize control of its abundant financial flows. To defend his gambling concession, Sasakawa mobilized his financial and political resources in a variety of ways. First, he cultivated strong personal and financial ties with conservative politicians in the ruling LDP and helped place his son and other political allies in the Diet. Second, to counter bureaucratic assertiveness, his Shipbuilding Industry Foundation provided trillions of yen to research institutes, training centers, community associations, sports clubs, and other non-profit organizations associated with government ministries. Recipient organizations also served as retirement havens (amakudarisaki) for more than one hundred former bureaucrats from the Ministry of Transportation, the government organ with jurisdiction over motor boat racing. Finally, Sasakawa defeated political challenges to his control of the state-granted gambling monopoly with ruthless efficiency.

The best example was his rebuff of then Prime Minister Tanaka Kakuei's attempt to gain control over the Shipbuilding Industry Foundation. After rejecting the prime minister's request to install a Tanaka ally within the Foundation's leadership, Sasakawa became the subject of a police investigation that many thought was Tanaka's attempt to unseat him. Although the investigation, which focused on campaign finance irregularities in Itoyama's 1974 Diet election, ended with the arrest of Sasakawa's brother, he himself emerged unscathed. Now a vocal critic of Tanaka, Sasakawa contributed mightily to the storm of condemnation that followed revelations of Tanaka's own questionable financial practices and that led to his resignation as prime minister in late 1974. Sasakawa's counterattack against Tanaka is alleged to have included his being a key informer in the Lockheed bribery scandal that resulted in Tanaka's arrest and conviction.27 Although most of these allegations remain unconfirmed, Sasakawa's media campaign against Tanaka during the scandal is a matter of public record. While vociferously denying any personal involvement in the scandal, Sasakawa made public statements that both suggested an intimate knowledge of the details of the affair and pointed specifically to the culpability of Tanaka and his cohorts. Although Sasakawa was also investigated by the Lockheed prosecutors because of his personal involvement with the aircraft industry, he was never indicted.

Kishi and Sasakawa both seemed to be made of Teflon. Between 1955, when Kishi helped create the LDP, and 1960, when he resigned as prime minister, fourteen separate corruption cases involving politicians and bureaucrats swirled around the party and the government. Kishi's name never once appeared on the formal dockets of the prosecutors, but it was ubiquitously associated with them in the popular imagination. Many of these scandals, e.g., the "Lockheed Grumman Affair" of 1958 and the "Indonesian Kickback Problem" of 1959, are closely associated with the "alternative routes" that Kishi had developed for amassing political funds: the acceptance of U.S. support, the use of public resources, and reliance upon political fixers.

Before leaving his post in Manchuria in 1939, Kishi reportedly told his colleagues: "Political funds should be accepted only after they have passed through a `filter' and been `cleansed.' If a problem arises, the `filter' itself will then become the center of the affair, while the politician, who has consumed the `clean water,' will not be implicated. Political funds become the basis of corruption scandals only when they have not been sufficiently `filtered.'"28 More than fifty years later, when virtually the entire leadership of the LDP was tainted by the Recruit Scandal, when Kanemaru Shin, Tanaka Kakuei's disciple and Ozawa Ichiro's mentor, was prosecuted for accepting funds that had not been properly "filtered" (in this case, four million dollars from a gang-related trucking company), and when Prime Minister Takeshita Noboru was toppled for his ties to yakuza, Kishi's advice was still relevant. It was, after all, Kishi who first connected the discredited world of prewar politics to postwar conservative hegemony and it was Kishi who welcomed organized crime and the nationalist rightwing into the mainstream of LDP power. By the 1990s, however, few seemed to remember the connection. By then, Kodama was dead, Sasakawa was weakened and dying, and a range of newly-founded religious organizations had become active -- indeed indispensable -- supporters of the LDP. Kishi's advice echoed faintly. Structural corruption within the "1955 System" was taken for granted. It was just the way things worked.


* Japanese names are given in the Japanese order, surname followed by given name.

1. Author's interview with former Prime Minister Nakasone Yasuhiro, May 17, 2000.

2. Kurzman, Dan, Kishi and Japan: The Search for the Sun (New York: Ivan Obolensky, 1960), p. 256.

3. Quoted by Kurzman, p. 267.

4. Quoted by Kurzman, p. 278.

5. For a detailed account of these developments, including the use of "show money," see Hara Shinsuke, Kishi Nobusuke: kensei no seijika (Kishi Nobusuke: Powerful Politician) (Tokyo: Iwanami, 1995), pp. 162-9.

6. Hara, op. cit., p. 177; and Kitaoka Shinichi, "Kishi Nobusuke: yashin to zassetsu" (Kishi Nobusuke: Ambition and Failure), in Watanabe Akio, ed., Sengo Nihon no saishotachi (The Prime Ministers of Postwar Japan) (Tokyo: Chuo Koronsha, 1995), pp. 121-148 .

7. Uemura Kogoro Denki Henshushitsu, ed., Ningen: Uemura Kogoro sengo keizai hatten no kiseki (Uemura Kogoro, The Man: The Path of Postwar Economic Development) (Tokyo: Sankei Shuppan, 1979), pp. 343-4, 606; and Hanamura Nihachiro, Seizaikai paipu-yaku hanseki (My Half-Life as the Pipeline Between the Political and the Business Worlds) (Tokyo: Tokyo Shimbun Shuppankyoku, 1990), pp. 19, 83.

8. Kano Akihiro and Takano Hajime Uchimaku: ayasutte kita kenryoku no rimenshi (Inside Story: The Hidden Background of How Power Came to Be Manipulated) (Tokyo: Gakuyo Shobo, 1976), p, 57.

9. Ono Koji, Nihon seiji no tenkanten (Reversals in Japanese Politics) (Tokyo: Aoki Shoten, 1998), pp. 91-94.

10. Masumi Junnosuke, Contemporary Politics in Japan (Berkeley: University of California Press, 1995), pp, 218-32.

11. Author's interview with Hori Wataru, April 28, 2000.

12. Asahi Shimbun, June 30, 1960.

13. Jacob M. Schlesinger, Shadow Shoguns: The Rise and Fall of Japan's Postwar Political Machine (New York: Simon & Schuster, 1997), p. 109.

14. Kishi Nobusuke, Yatsugi Kazuo, and Ito Takashi, eds., Kishi Nobusuke no kaiso (Recollections of Kishi Nobusuke) (Tokyo: Bungei Shunju, 1981), p. 126.

15. See Chalmers Johnson, Norbert A. Schlei, and Michael Schaller, "The CIA and Japanese Politics," Asian Perspective 24:4 (2000), pp. 88-94.

16. Kishi, Yatsugi, and Ito, pp. 118, 128.

17. Schlesinger, p. 110.

18. Arase, David, Buying Power: The Political Economy of Japan's Foreign Aid (Boulder, Colo.: Lynne Rienner, 1995), p. 28 .

19. Nishihara Masashi, The Japanese and Sukarno's Indonesia: Tokyo-Jakarta Relations, 1951-1966 (Honolulu: University of Hawaii Press, 1976), p. 103.

20. Masumi,p. 229.

21. Yasuhara Kazuo, Keidanren kaicho no sengoshi (The Postwar History of Keidanren Chairmen) (Tokyo: Bijinesu-sha, 1985), pp. 102-3.

22. On the Recruit scandal, see Gerald Curtis, The Logic of Japanese Politics: Leaders, Institutions, and the Limits of Change (New York: Columbia University Press, 1999); and Sasaki Takeshi, ed., Seiji kaikaku 1800-hi no shinjitsu (The Reality of 1800 days of Political Reform) (Tokyo: Kodansha, 1999).

23. For these details, see Iguchi Go, et al., Kuromaku kenkyu (Studies of Political Fixers) (Tokyo: Shinkoku Minsha, 1977); and Sato Seizaburo, ed., Za raito uingu no otoko: senzen no Sasakawa Ryoichi goroku (The Rightwing Man: The Prewar Record of Sasakawa Ryoichi) (Tokyo: Chuo Koronsha, 1999).

24. See Ino Kenji, "Sasakawa teikoku ga yuragu" (The Sasakawa Empire Trembles), Ekonomisuto, August 2, 1994, pp. 88-91; and Ino, "Sanninno kuromaku to Sasakawa Ryoichi" (The Three Political Fixers and Sasakawa Ryoichi), Ekonomisuto, October 3, 1995, pp. 86-91.

25. Wakamono to Shukyo Kenkyukai, ed. Toitsu Kyokai no uchimaku (The Inside Story of the Unification Church) (Tokyo: Eeru Shuppankai, 1992); and Andrew Marshall and Michiko Toyama. "In the Name of the Godfather," Tokyo Journal, October 1994, pp. 29-35.

26. Christopher Redl, "Curse of the Kingmakers," Tokyo Journal, May 1993, pp. 34-41; and Redl, "Japan's Divine Seduction: How the Unification Church Infiltrated the Japanese Government," unpublished manuscript, 1994.

27. Ino Kenji, 1995, p. 91.

28. Tajiri Ikuzo, Showa no yokai: Kishi Nobusuke (The Monster of Showa: Kishi Nobusuke) (Tokyo: Gakuyo Shobo, 1979), p. 88.

RICHARD J. SAMUELS is Ford International Professor of Political Science and director of the Center for International Studies at the Massachusetts Institute of Technology. He has written numerous books on Japan, including Rich Nation, Strong Army: National Security and the Technological Transformation of Japan (Cornell University Press,1994), which won the 1996 John Whitney Hall Prize of the Association of Asian Studies. He has recently completed a comparative political and economic history of Italy and Japan, of which this paper is an edited excerpt. It is used with the permission of Cornell University Press. Professor Samuels received an Abe Foundation fellowship in support of this research and was affiliated with the Institute of Social Science, University of Tokyo. In October 2001, Samuels was appointed Chairman of the Japan-U.S. Friendship Commission.

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