Uniqueness and sleaze - Japan's Recruit scandal

National Review, June 2, 1989 by William Stern

TOKYO-The Japanese maddeningly pride themselves on their uniquenness. They delight in telling us that their "unique" society accounts for their special abilities. How else to explain the better cars, the crime-free streets, the harmonious system? The Japanese often point out that the United States' "open" society is responsible for its many failures. How else to explain the gunfights in our streets, our lazy workers, and our legislators who childishly bash a Toshiba radio-cassette player on the steps of the Capitol?

Then enter the Recruit scandal. The roots to this tale of influence peddling, corruption, and deceit lie in the uniquely Japanese system of kinken-seiji, money-politics. The scandal has brought out the darker side of many elements in the Unique System that Western journalists have long ignored and Japanologists admired. These include the stability provided by the uninterrupted 34-year reign of the Liberal Democratic Party (LDP), the cozy interconnections among big business, the LDP, and the vast bureaucracy, and the unquestioned right of a closeknit elite to guide Japan's future.

The story of the scandal is well known by now. Hiromasa Ezoe, the ambitious founder and former chairman of the Recruit Company, had a problem. For the sake of his company, Ezoe was determined to break into Japan's inner circle, where he could hobnob at Ginza nightspots with influential bureaucrats and play golf with the likes of former Prime Minister Yashuhiro Nakasone. But he lacked the right family ties and, even worse, headed up an upstart firm, not one of Japan's entrenched conglomerates.

Japan's politicians also had a problem. It takes about $1 million annually to cover a typical Diet member's political operations, and the government only provides $150,000. The balance has traditionally come from "dangerous money"-mostly business donations. So Ezoe was merely conducting money-politics as usual, except that he made two mistakes. He spread around more than is normal, and, according to the prosecutors, he exacted special favors in return.

The rest is history, although observers outside Japan have underestimated the scandal's magnitude. Imagine an affair that led to George Bush's resignation, and also engulfed most of his Cabinet and every conceivable presidential replacement from Gerald Ford to Jack Kemp, from Jesse Jackson to Pat Schroeder. Throw in the related arrest of Lee Iacocca, and the forced retirement of the Washington Post's chairman of the board, Katharine Graham, and you begin to get the picture.

The Japanese would have us believe that the scandal, by revealing the sleaze factor in the interplay of big business and politics, will ultimately contribute to its cleansing. Highly unlikely. Others have asked just what kind of democracy Japan is. They point out that Japan's political system has never provided any impetus to Japan remains tied to an archaic system where business supplies the huge funds it takes to keep the LDP in power. The party, in turn, conspires with the bureaucracy to write the laws that keep the Japanese companies prosperous. Since 1945, it has subjugated most other considerations to forging an economic powerhouse and has succeeded brilliantly.

Finally poised on the verge of superpower status, the Japanese have found that, whoops, their political system more closely resembles Tammany Hall than that of an aspiring leader of the free world. Awash in a sea of yen, Japan seems unable to come to grips with the fact that the Unique System that brought the opulence may forever be its Achilles' heel. Her domestic political future now is, as a local paper reported, "caught between the unimaginable and the unacceptable." The traditional and heretofore effective LDP formula for political damage control has been used: First say you know nothing about the dirty money. If they prove you knew, say you didn't personally receive any. And if they prove you did, say, What the heck, everyone else did too. But this typically Japanese tactic of evasion didn't work this time. The entire top echelon of the LDP is tainted.

Takeshita, for his part, was the consummate LDP politician-a gifted fundraiser and crafty backroom bargainer whose legendary elusiveness was a source of pride. That he lacked a sense of global perspective merely made him typical of his peers. Although Takeshita didn't create the Unique System that finally derailed him, it was his ability to maneuver within it that led to his stewardship of Japan.

Will Japan learn its lesson? Unlikely, says Masahiko Ishizuka, the editor of the prestigous Japan Economic Journal. He explains: "The situation requires a new type of political leader capable of thinking beyond his narrow interests and taking a wider world view, but we just don't have anyone like that in sight." Typically, the number-one concern in Japan now is not how to clean up the system, but fear that the U.S. will use Tokyo's paralysis to gain an upper hand inpending bilateral trade issues.