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Social Science Japan Journal #6.

1 HILL

Heisei Yakuza: Burst Bubble and Btaih

Peter HILL

Peter HILL is a British Academy Postdoctoral Fellow in the Department of Sociology at the
University of Oxford. His current research interests include organised crime, policing in Japan and the
wartime special attack corps (tokubetsu kgeki-tai). Publications include The Japanese Mafia: Yakuza,
Law and the State (Oxford University Press forthcoming 2003). He can be contacted at the Department
of Sociology, Littlegate House, St Ebbes, Oxford, OX1 1PT, UK, or by email at
peter.hill@sociology.ox.ac.uk

Abstract: This paper explores developments in the business activities of the yakuza/bryokudan
(Japans organised crime syndicates) following the end of the Shwa period in 1989. Since then, the
yakuza have had to contend with two events which have had profound effects on their economic
environment: the collapse of Japans bubble economy right at the beginning of the new era and the
introduction of the bryokudan countermeasures law (Btaih) in 1992. Whilst post-bubble economic
stagnation has deprived the yakuza of many lucrative opportunities, it has compensated them with
others. The Btaih, by imposing new restrictions on formerly legal yakuza activities, made these
sources of income more costly and thereby similarly forced gang-members to develop new sources of
income. In particular, amphetamine dealing and organised theft rings have grown in response to the
double punch of the bubble and the Btaih. The paper concludes by suggesting that the continuing
economic hardship faced by the yakuza is weakening the intra- and inter-organisational mechanisms by
which they have tried to stabilise their world.

1. Introduction

During the early years of the new imperial era two events had a massive impact on the
economic, legal and political environment of Japan's underworld gangs known as
yakuza:1 the collapse of Japans speculative real-estate and stock-market bubbles in
1989-90 and the passage of new anti-yakuza legislation in 1991. This paper explores
these changes and the effects they wrought on the yakuza over the following decade,
asking what this tells us about the relationship between the authorities and yakuza.
My interest in yakuza was initially sparked during the late 1980s when, as a
karate student in the northeast of Japan, I spent an extraordinary evening drinking
with the prefectures most prominent gang-leader. As a nave student I was struck by
the apparent paradox of a large and visible set of organised criminals amidst a
harmonious and peaceful host community. The fascination continues. The research on
which this paper is based took place ten years later in Tokyo and Osaka, supplemented

1
In this paper, the term yakuza is used in preference to that favoured by the authorities, academics and
broad-sheet journalists, bryokudan (violent groups) when referring to Japans organised crime
syndicates. This choice is based simply on the more general recognition of the former word among
non-Japanese readers.

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with more recent material drawn largely from the monthly trade magazines of the
yakuza such as Jitsuwa Jidai and Jitsuwa Dokyumento2. I focus principally on the big
three syndicates -- the Yamaguchi-gumi, the Inagawa-kai and the Sumiyoshi-kai --
who collectively comprise over two-thirds of the total yakuza population.
At the beginning of the Heisei period in 1989 the yakuza apparently enjoyed a
position of wealth, security and acceptance inconceivable for organised crime groups
in other advanced industrial democracies. Even in Italy, long seen as the exemplar of
state-mafia symbiosis, the activities of determined prosecutors such as Giovanni
Falcone and Paolo Borsellino had critically undermined the validity of this paradigm.
No such trend seemed apparent in Japan; as the Shwa emperor was lying on his
deathbed, LDP supremo Kanemaru Shin was entertaining, and flattering, the head of
one of Japans largest criminal syndicates. Similarly, police officers the length of the
land were dropping in at gang-offices, clearly identifiable with large nameplates, to
share coffee and cigarettes whilst chatting about what was happening on their beat.
Whilst this seemed to constitute conclusive evidence of systematic state-
yakuza symbiosis, as stressed by much of the popular English-language literature (e.g.
Kaplan and Dubro 1986, van Wolferen 1989), the reality was slightly more complex.
Since the mid 1960s, police countermeasures had consistently been one of the two
most significant factors driving the diversification of the yakuza into new business
activities3.
As of December 1988, the yakuza comprised a total membership of 86,552
men4 (including both fully initiated members (ksei'in) and trainees (jun-ksei'in)
making up 3,197 groups. Of these groups, 1,397 (34,492 men) were attached to one or
other of the three big national syndicates, the Yamaguchi-gumi, the Sumiyoshi-kai and
the Inagawa-kai (Keisatsu Hakusho 1989: 13). These syndicates were organised on a
pyramidal, quasi-feudal, hierarchy in which the formal organisational structure was
reinforced by a parallel social structure based on fictive father-son and brother-brother
links forged through ritual exchanges of sake. Within these syndicates were strings of
sub-groups and sub-groups led by syndicate members of decreasing seniority.

2
There is a certain prejudice against such magazines amongst academics, and indeed they are both
highly partial and far from academic. Used carefully, however, these are a valuable source of up-to-
date yakuza information. Yakuza and police alike read these magazines.
3
See Hill (forthcoming).
4
Although classically seen as employers of last resort for discriminated minorities, in gender terms the
yakuza are not equal opportunities employers.

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In reaction to nationally concerted police arrests of senior gang bosses during


the mid-1960s, in the early 1970s the large syndicates adopted a system of monthly
tribute, (jnkin5), paid by sub-groups to their parent gang. This guarantees an income
for senior bosses, while insulating them from any direct criminal involvement. In the
case of the Yamaguchi-gumi, by the early 1990s the bosses directly linked to the first-
level organisation (chokkei kumi-ch), were expected to pay 1.34 million per month,
giving headquarters a guaranteed annual income of 21.26 billion (Mizoguchi 1997:
54-58). Not all this money went to the gang boss, since leading a syndicate is an
expensive business. Costs include running the headquarters; legal fees; maintenance
for families of incarcerated members; and gifts of money at funerals, jail-release,
succession and other yakuza ceremonies (as well as mainstream year-end and summer
gifts).
Where did this money come from? Estimates of total yakuza income can never
be made with any degree of confidence. In 1989 the National Police Agency
(hereafter NPA) published a widely reproduced pie chart showing their assessment of
annual yakuza income (Keisatsu Hakusho 1989). According to this estimate, at the
end of the Shwa period, the yakuza collectively made 1.3 trillion per year.
This total was broken down as in table 1.

Table 1. Police estimate of yakuza sources of income, 1989.


Source of income Percentage of income
Amphetamine dealing 34.8%
Gambling and bookmaking 16.9%
Traditional protection 8.7%
Civil intervention (minb) 7.3%
Corporate extortion (skaiya) 3.4%
Other illegal activities (fraud, theft, etc) 9.2%
Legitimate business management 9.9%
Legitimate employment 9.8%
Source: Keisatsu Hakusho, 1989.

In an interview (Tokyo, March 1998), I discussed these figures with a senior research
officer at the National Research Institute for Police Science (NRIPS) who had been
involved in devising the methodology underpinning this estimate. This officer
suggested that significant sources of yakuza income were excluded from this estimate

5
The yakuza themselves prefer the term kaihi or membership fees.

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for political reasons: senior NPA officers considered it politically embarrassing to


have to admit the extent to which criminal organisations were taking money from
large and supposedly respectable businesses in exchange for nebulous services.
Perhaps the most significant source of funds of this type was Japans
construction industry. In 1990, total investment in construction in Japan stood at over
81 trillion (18.5% of GDP) (Asahi Shinbun 1999: 166, 81). If we assume that yakuza
protection extends to one-third of this total6 and that the standard rate is 3% (as
suggested by interview data) then this industry yields the yakuza 810 billion per year.
Yakuza dependence on construction is not unique to them; as Kerr (2001) so
trenchantly reminds us, this industry is the drug to which politicians, bureaucrats, and
vast swathes of the population are addicted.
The much-cited figure of 1.3 trillion should therefore be seen as a serious
underestimate of total yakuza earnings. Mizoguchi Atsushi7 (1986: 182) suggested a
figure of 7 trillion for annual yakuza turnover for the mid-1980s, with profits being
somewhere in the region of three-quarters of this.
There were two crucial (and frequently interrelated) developments in yakuza
business practices over the 1980s. The first of these was their increased involvement
in the speculative real-estate and stock-market bubbles. Many yakuza were initially
drawn into this sphere by real-estate developers who hired yakuza to conduct jiage
operations forcing owners of small adjacent properties to sell their land and provide
a large, developable site. Japanese property law provides many obstacles to doing this
quickly and cheaply and the yakuza provide an expedient short cut. The commission
earned on such operations was typically 3% of the lands ridiculously inflated value.
By the late 1980s, jiage was considered to be the biggest single source of income for
yakuza in the Kant and Kansai regions (Mizoguchi 1997: 66). Ambitious yakuza
moved into real-estate development, and then investment in the soaring stock market,
in their own right. In their enthusiastic participation in these markets, yakuza were by
no means unique.
The second key development over this period was the growth in minb.
Minb, more formally minji kainy bryoku, violent intervention in civil affairs.
This comprises activities in which bryokudan members or associates make use of the
implied threat of their gang-affiliation in order to intervene in the everyday lives of

6
As will be mentioned later, for 1990, this is a conservative assumption.
7
The one writer recommended to this researcher by yakuza and police alike.

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the general public, or by taking the form of rightful or interested parties and taking
advantage of areas in which legal procedures do not function adequately, intervene in
economic transactions. Strictly speaking, sub-classifications of minb include
incidents related to: debt-collection; skaiya activities; finance; promissory notes;
bankruptcy management; real estate (especially jiage); out of court settlement of
traffic disputes; other disputes. In general parlance however, minb typically refers to
traffic dispute and other types of pretext racketeering. This latter sense is adopted
here.
The big growth in minb followed the 1982 reform of the commercial code,
making which made skaiya-type racketeering harder, especially at the lower end of
the business. Yakuza displaced from the skaiya business developed other fundraising
activities. This development was significant for two reasons. Firstly, unlike the
traditional victim-less yakuza businesses such as gambling and protecting bars,
much minb activity directly impinges on the lives of ordinary members of the public.
The authorities tolerance of organised crime is highly influenced by public
perceptions of victimisation. Secondly, prior to 1992, minb occupied a legal grey
zone. Although it rests on the threat of violence to achieve its ends, this threat is
implicit; the threatened party identifies the signs of bryokudan membership, and
their semiotic significance, displayed by the party making the threat. In most cases
there is no need for the actual use of violence or its explicit threat, both of which are
legally actionable.
Let us now look at how developments over the last decade have changed the
yakuza world.

2. The Bursting of the Bubble and its Impact on Yakuza Business

The bursting of the bubble economy, with the spectacular collapse of land and stock
prices, had profound implications for the yakuza. These were not purely negative; the
yakuza economy is far more dynamic than that of the upper world and smart yakuza
were sometimes able to exploit the economic misfortunes of others to their own
advantage. Let us look at the losses and gains in turn.

2.1 Bubble Trouble

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After the bubble burst, there was of course far less money floating around the
economy for yakuza to siphon off. Companies that had formerly found it easier to pay
yakuza to go away than confront them could no longer afford this luxury. Similarly,
economic hardship reduced the amount spent in Japans bars, restaurants and
commercial sex establishments (though in international terms, the sum remains huge),
reducing protection payments (mikajimery) to yakuza. The other yakuza staple, the
construction industry, held up better due to massive investment in public works.
Yamada Hitoshi, head of the Japan Bar Associations anti-bryokudan committee,
suggests that probably 30% to 50% of public works projects in Japan now (1999)
involve payoffs to gangs, and these vary from about 2% to 5% of the total
construction cost (Forbes 8 February 1999). The main loss to the yakuza has been in
the financial and real estate markets and it is on those that we shall concentrate here.
Following the crash, revenue from jiage dried up; investors no longer saw
large profits to be made from large developments. This was a heavy blow. Moreover,
many jiage-ya had diversified into speculation on their own account. Like many other
investors, they had financed their speculation by borrowing, using land as collateral.
The collapse in land prices destroyed the investments, slashed the value of the
collateral, and made debt-recovery a problem. Whilst this problem was not specific to
the yakuza, collecting debts from such individuals presented creditors with particular
problems.
In 1993, Koyama Toyosabur, vice president of Hanwa Bank, was shot dead.
Koyamas duties had included recovering debts and it was widely assumed that his
killer was a yakuza. Koyama had approved a 590 million loan to a yakuza front-
company. The loan had been granted because the gang had silenced a political
magazine that had been exposing various scandals associated with the bank.
Mizoguchi (1998: 192) reveals that competing factions within the bank made use of
political organisations and bryokudan to thwart their rivals. In 1996, when the
Ministry of Finance (MOF) ordered Hanwa to stop trading, a list of the banks
special investments, comprising debts owed by yakuza and right-wing political
groups, was discovered.
Also in 1993, a spate of attacks on Sumitomo Bank branches and executives
homes were recorded. Then in September 1994, Hatanaka Kazufumi, manager of
Sumitomos Nagoya branch, was shot dead as he opened his front door to a caller.

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Police investigating this murder, convinced that the bank was withholding
information, took the unusual step of impounding Hatanakas desk and filing cabinets.
An NPA official, writing in Tokyo Business Today (December 1994), attributes the
banks reticence to the links Sumitomo had forged with yakuza figures during their
highly aggressive business activities in the years of the bubble economy.
Yamada Hitoshi sees a further dimension to the Hatanaka killing:

Sumitomo had a policy of collecting collateral no matter what and they


started using crime syndicates to collect on loans connected to other crime
syndicates. Sumitomos loan collection efforts drove the head of the Aizu-Kotetsu
gang into suicide in Kyoto and then another gang leader killed himself in Tokyo. At
this point, gangsters started to realise they could be next so they murdered the
Nagoya branch manager who had been most aggressive at trying to collect on such
loans. (South China Morning Post 31 May 1998)

This attack prompted MOF to grant Sumitomo Bank permission to write off 500
billion worth of yakuza-related debts. The other major banks were also allowed to
write off hard-to-repay loans (ibid.). In total, by 1997, 21 major financial institutions
had been allowed to write off 20.5 trillion of their most problematic loans (Konishi
1997: 101).

The problem of yakuza-related bad debt became particularly acute with the collapse of
the jsen8 which, due to their exclusion from 1990 MOF-imposed restrictions on loans
to real-estate speculators and their lack of regulation, became the main source of
funds to companies that failed to meet the banking industrys criteria of
creditworthiness:

All seven top jsen commonly made loans against collateral with a value lower than
that of the loan itself. They made loans to borrowers whom they knew to be using
false names. They loaned for speculative stock buying, for pachinko parlours and
for sex hotels. Many loans were made to companies associated with politicians.
Most of the jsen loans made after the 1990 restriction were paid to the companies
of criminal syndicates (Hartcher 1998: 128).

8
Japanese non-bank financial institutions set up in the early 1970s to provide loans to homebuyers.

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By January of 1996 the total scale of the bad debt held by the seven jsen
companies was estimated at 6.4 trillion. In addition these companies had a further
2.1 trillion of non-performing but salvageable loans (Australian Financial Review 23
January 1996).
How much of this was yakuza-related remains unclear. One sample of 93 loans
made by the Sjo Jkin Company contained 40 that had been made to yakuza
(National Business Review 15 March 1996), or 43% of the total. While such a small
sample is merely suggestive, 43% is around the mid-range of journalistic estimates
(generally between one third and a half) as to the yakuza portion of the problem. MOF
sources cited by the South China Morning Post (31 May 1998) admitted that yakuza
gangs and their front companies borrowed at least five trillion yen from the jsen.
Whilst the jsen debacle was the most spectacular manifestation of Japans
bad debt problem, it was just one aspect of it. Although Japanese accounting practices
allowed banks and companies to conceal much of their debt,9 by 2002, the official
figure for bad debts held by Japans banks and non-bank financial institutions, was put
by the new Financial Supervisory Agency at 42 trillion (Financial Times 15 October
2002)10. An alternative, non-governmental, estimate by Goldman Sachs gives a figure
of 237 trillion (Bloomberg News 4 April 2002).
The most frequently quoted estimate of the degree of yakuza involvement
with this total was 40%. Support for this 40% figure comes from Miyawaki Raisuke,
formerly of the NPA and currently a consultant on yakuza-related problems, who, in
1995, estimated that 10% of bad debt was directly tied to yakuza groups whilst 30%
had some indirect connection (Financial Times 12 December 1995).
To resolve the mess left by the collapse of the jsen, in 1996 the government
set up the Housing Loan Administration Corporation (HLAC or Jsen Kiny Saiken
Kanri Kik). This organisation was merged 1999 with the Resolution and Collection
Bank (Seiri Kaish Gink) to become the Resolution and Collection Corporation
(RCC or Seiri Kaish Kik) with responsibility for bank as well as jsen non-
performing loans (Miyama 2000: 59). It includes a special armed task force on
attachment from the police to deal with yakuza related problem loans. Of the 8.7

9
Changes in accounting regulations introduced fiscal year 1999-2000 (requiring Japanese companies to
consolidate the finances of subsidiary companies in their annual accounts) and the following financial
year (in which assets must be valued at market value rather than book cost) might be expected to
alleviate these problems (Economist 27 December 1999).
10
Stock market volatility of course ensures considerable instability in this figure.

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trillion of non-performing loans that the agency has purchased up to April 2002, it has
managed to recover 4.6 trillion (The Australian 9 April 2002). Some 18.4% of loans
purchased by the RCC are yakuza-linked (Financial Times 23 October 2001).
Whilst yakuza have certainly lost money on failed investments, their ability to
bully creditors into writing off their losses has limited yakuza losses. Meanwhile in
other ways the yakuza have actually profited from Japans economic problems.

2.2 Bubble Gains

2.2.1 Debt Collection and Loss-Cutting: Songiri

The fact that banks employed yakuza to recover debts owed by other yakuza, reminds
us that debt-collection is a long-standing yakuza service. In a debt-laden economy
lacking efficient legal channels for reclamation, such business booms. The standard
rate charged by yakuza debt-collectors is 50%, though this may be supplemented by
expenses (Yajima 1992: 22-3). After the bubble burst, creditors could not realistically
hope to reclaim the principal owed to them in full. There was therefore a new niche
market for yakuza capable of exploiting the negotiating advantage that gang
membership entails to act as loss-cutters (songiri-ya).
To understand how songiri-ya operate, consider the following scenario.
During the bubble, bank AAA lent 350 million to mansion block-management
company Z. With the collapse in the bubble economy, Z is unable to repay the loan
and the collateral falls in value to a mere fraction of the outstanding debt. Enter the
songiri-ya. Having gained the appropriate powers of attorney from AAA, he
persuades Z to settle the debt with a payment of 40 million (just 11.4% of the
outstanding debt, not including interest payments). The debtor pays a further 20
million to the songiri-ya as thanks for reducing its debt burden by so drastically. Of
course the songiri-ya also receives a commission from the creditor, estimated by
Hinago (1998, 166) at 3% of the amount retrieved.
This type of activity is legal: why, then, is it dominated by yakuza and their
business associates? The answer is that, to be effective, it relies on the implied threat
of yakuza association. The further obvious question is why creditor and debtor do not

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negotiate directly and cut out the middleman. Often the reason is that the debtor has
some kind of connection with a yakuza group.

2.2.2 Auction Obstruction: Kybai Bgai

This type of activity can take many forms, but effectively auction obstruction involves
artificially depressing the value of a property to be sold. The ability to do this can be
profitable to yakuza in three different ways: they may continue to use the property as
before following the auctions collapse; they may hope to acquire the property
cheaply and then sell it on at its market price; or they may be paid money to vacate
the premises by those wishing to sell it.
Auction obstruction has long been a feature of the real-estate industry. In
1979, a system of sealed bids (kikan nysatsu) was adopted under which, it was
hoped, in an attempt to prevent intimidation. However, this merely led to changes in
the way in which auctions were obstructed. In particular, some auction specialists
evolved into occupation specialists (seny-ya) who would strategically occupy target
buildings.
There are various ways in which yakuza can take possession of a property.
They may lend money to an ailing company using short-term leaseholders rights as
collateral. Alternatively they may purchase the property with borrowed money they
cannot repay and then sublet the premises to another group. Surprisingly enough,
property owners themselves frequently conspire with yakuza groups by granting them
short-term rights. In these cases, the objective is to deter the owners creditors from
recovering their debts. In many cases of problem real-estate-related loans, the
properties in question have multiple mortgages on them. Should the property be sold,
the first mortgage holder will recover nearly all of the revenue from the sale whilst the
third and fourth mortgage holders receive little. These lower priority mortgage holders
may therefore sell their rights to yakuza (Konishi 1997: 105-7).
Japanese law provides strong protection to tenants, making it very slow and
expensive to evict those in possession of leaseholders rights. This makes dealing with
occupation specialists difficult; frequently the most cost effective strategy may be to
pay them to go away.

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Once a building has been occupied, the standard practice is to advertise the
fact by displaying yakuza affiliation from windows and on doorplates. Alternatively,
an armoured public-announcement truck festooned with right-wing paraphernalia
parked outside the property provides a clear signal to prospective purchasers. A name
card, showing gang-affiliation, may be inserted in the documents giving public
notification of sale. If these tactics prove insufficient, more direct intimidation
remains an option, though this runs the risk of criminal prosecution.

2.2.3 Bankruptcy Management - Tsan Seiri

Bankruptcy management (tsan seiri) is one of the most sophisticated and skilled
techniques by which bryokudan members make money. When a company goes
bankrupt in Japan, the legal machinery for the settlement of the various creditors
claims usually takes several years (occasionally up to ten) and the amount of debt
eventually repaid is a small percentage of that actually owed. Creditors may therefore
find it advantageous to sell their debt to a specialist bankruptcy manager (tsan seiri-
ya) sometimes for as little as 5% of face value (Mizoguchi 1986, 189). Emotionally
fragile managers of bankrupt firms may also prefer to bring yakuza on board to
protect them from the wrath of angry creditors (retired gang-boss interview 1998).
The two most important things for bankruptcy management specialists are
speed of action and the accumulation of more debt than other creditors. What seiri-ya
will often do is identify a company on the point of collapse and then move in with
short-term financial support. From this position of strength, the seiri-ya will force the
manager to write and seal a document granting power of attorney thereby gaining
possession of the firms books, seals and deeds. The seiriya may then forge
promissory notes and other documents in his favour. Once the company has finally
gone bankrupt, it is important to occupy the companys premises and collect any
money outstanding from credit sales before any other creditors, or yakuza, can get
their hands on the companys assets (Yajima 1992, 16-21).
Following the collapse of the bubble, bankruptcies (and therefore
opportunities for seiri-ya) have increased, especially when measured by total
liabilities. However, since the end of the 1980s, bankruptcy management has become
harder due to greater police interest in this type of activity, companies taking

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advantage of the Company Resuscitation Law and more stringent oversight by


lawyers during bankruptcy proceedings (Yamada 1994b: 300: Mizoguchi 1998: 190-
1).
As a consequence, it is now easier to attach oneself to a company before it
goes bankrupt and to exploit it from the inside. An example of this is the Itoman
scandal of the early 1990s in which a business brother of Takumi Masaru, the
Yamaguchi-gumis wakagashira (number two man), diverted an estimated 500-600
billion to the criminal economy from the Itoman Real Estate Corporation (Mizoguchi
1998: 193-6; Tokyo Business Today December 1994).
Complicating life for yakuza trying to develop new businesses in this changed
economic environment was the introduction of the anti-yakuza law. Let us now
examine this law, its causes and consequences.

3. The Btaih and its Impact on Yakuza Business11

3.1 Background to the Btaih

As mentioned above, public tolerance of organised crime is largely conditional on its


activities being characterised as victimless crimes. During the 1980s, such a
perception became increasingly hard to maintain due to the growth in the minb
activities. In particular, cases where ordinary members of the public were victimised
led to increased public antipathy towards the yakuza.
Negative public perceptions of the yakuza were reinforced by three high-
profile inter-gang conflicts. The first of these was the Yama-Ichi ts (1984-89), the
nation-wide conflict between the Yamaguchi-gumi and its breakaway faction the
Ichiwa-kai, which cost 25 deaths, 70 injuries and over 500 arrests. The second conflict
was the Hachiji war of 1990 on the western outskirts of Tokyo in which the
Yamaguchi-gumi mounted reprisals against the Hachiji-based Nibiki-kai following
the murder of two executives from a sub-group. This conflict was significant in that
the Yamaguchi-gumi had a long-standing agreement with the Inagawa-kai not to set
up gang-offices in Tokyo and the Tokyo police were particularly keen to maintain this
situation. Finally, in 1990, conflict broke out in Okinawa between the Kokury-kai
11
For a particularly perceptive account of the passing of the Btaih and its effects on the yakuza, see
Herbert 2000.

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and the breakaway Okinawa Kokury-kai. Amongst the fatalities was a high-school
student mistaken for a gang member. According to one NPA interviewee, the death of
this youngster was the single most important factor in changing public opinion.
Political factors, both domestic and international, were also significant.
Following a string of scandals, disgraced prime ministers and electoral disasters, in
1989 the LDP installed Kaifu Toshiki as party leader and hence prime minister, in a
bid to clean up the partys image. Looking tough on organised crime by introducing
the Btaih was part of that strategy. At the same time, Japan was coming under
attack for not pulling its weight in Americas War on Drugs (seen as synonymous with
organised crime). At a time when US-Japan relations were already under strain over
the bilateral trade imbalance, Japan was criticized for slow compliance with such
measures as the 1988 UN anti-drug-trafficking convention. Friman (1996: 64) notes
that faced with increasing threats of economic retaliation, Japanese policy makers
have viewed co-operation on drug issues as a means to defuse broader bilateral
relations.
Interviewees suggest that NPA officials involved in discussions with their US
colleagues were similarly embarrassed by criticism of their anti-yakuza efforts. Unlike
the US and Europe, Japan lacked specific countermeasures against organised crime.
The debate within Japan was thus conducted with reference to European and
American models. The European approach, caricatured as criminalisation of organised
crime group membership, was thought to violate constitutional guarantees of freedom
of association and deemed inappropriate. Most attention was therefore directed at
Americas Racketeer Inspired and Corrupt Organisations Act (RICO).
The main significance of RICO is that it makes possible the single
prosecution of an entire multidefendant organized crime group for all of its many and
diverse criminal activities (Giuliani 1987: 105). In short it is a law that leaves the
crime to other laws and addresses the idea of being organised (Rebovich 1995:
141). It does this by making it unlawful for an individual to participate in the activities
of an organisation involved in a pattern of racketeering defined as two or more
acts of racketeering within ten years. The penalties provided by RICO are severe: in
addition to up to 20 years imprisonment and/or a fine of up to $25,000, RICO allows
for the sequestration of assets acquired through violation of its statutes. How then
does the Btaih compare to this standard?

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3.2 Provisions of the Btaih

The Btaih empower regional Public Safety Commissions (Kan Iinkai; hereafter
PSC) to officially designate a group as a bryokudan if it meets each of the following
three criteria: firstly, regardless of ostensible purpose, the members of the
bryokudan in question make use of the said bryokudans influence to acquire funds,
whether to maintain living expenses, accumulate wealth or operate a business;
secondly, more than a certain proportion12 of the group must have a criminal record;
and thirdly the representatives of the said bryokudan, or the individuals who have
governing positions in its administration, have under their control a hierarchically
constructed group (Btaih Article 3).
Once designated, a bryokudan becomes subject to a number of restrictions on
its behaviour. Most significantly, its members are forbidden to make violent
demands (bryokuteki yky). These include requests made by a member of a
designated group whilst exploiting the influence of that group (by, for example,
mentioning the groups name or handing over a name-card indicating gang-
membership). The full range of prohibited demands is covered in Article 9 of the law
and corresponds roughly to the various categories of minb identified earlier.
Should a designated bryokudan member engage in activity infringing Article
9, the victim may notify the PSC, which will then issue an injunction forbidding the
activity. PSC injunctions can also be issued without notification, against gangs
pressuring juveniles to join their ranks, for instance. The Btaih also empowers the
PSCs to forbid the use of gang offices at times of inter-gang conflict. Even at times of
peace, activity considered likely to cause anxiety to members of the public in the
vicinity of gang offices (such as publicly displaying the gangs name and crest outside
the office) are liable to PSC injunctions. If an injunction is violated then, and only
then, are penalties are incurred. These range in severity up to one year of
imprisonment, a maximum fine of one million yen or a combination of the two.
Another feature of the Btaih is that it allows for the establishment of
Centres for the Elimination of Bryokudan (Bryoku Tsuih Und Suishin Sent or,
more simply, Btsuisen). These groups, designated at the discretion of the National
PSC, have a number of responsibilities: assisting the yakuzas victims; promoting
12
The proportion varies from two-thirds for a group of three to 4.2% for a large syndicate of 1,000 men
or more.

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public awareness of the yakuza threat and how to deal with it; advising and helping
those who wish to leave gangs; and assisting non-governmental anti-yakuza groups.
Although it is not specified in the law how these organisations should be
constituted, the prefectural centres are closely wedded to their respective police
forces. Offices are generally situated within the local police headquarters and many of
their employees are retired police officers. It is hard to avoid the conclusion that, in
part, these centres were designed to create amakudari positions for police officers.

3.3 Revisions to the Btaih

Since its introduction the Btaih has been revised several times. These revisions
aimed to expand the scope of the law and to close gaps that the yakuza had used to
evade its provisions. The most significant of these was to make the activities of
yakuza business brothers13 and other associates subject to the provisions of the law.

3.4 Yakuza responses

Even before its appearance, the yakuza were taking measures to minimise the impact
the Btaih would have on their operations especially the Yamaguchi-gumi
(Mizoguchi 1992b: 246). At the regular monthly meeting (teirei-kai) of March 1991,
by which time the laws first draft had been published, discussion concentrated on
how to respond. The following day, the executive committee sent faxes to regional
block managers ordering that gang-signs be removed from all sub-group offices. Each
regional block was further instructed to set up study groups to examine the laws
provisions.
At the following teirei-kai, members were instructed to sever all contact with
the police, not to co-operate with them and not to let them into gang-offices without a
search warrant. The Yamaguchi-gumi also sought to establish better relations with the
other large syndicates to minimise the risk of inter-gang conflict and the attendant
legal repercussions. This diplomacy included two yakuza summit meetings (27
September 1991 and 22 February 1992) at which the participants agreed not to annoy
ordinary members of the public or each other (Yamada 1994b: 406; Japan Access 13
13
Business brothers (kigy shatei) is the term used to refer to business-men who, whilst not themselves
members of yakuza groups, make use of their close association with gang-members in order to secure a
competitive advantage in their business dealings.

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January 1992; Mizoguchi 1992b: 252). However, the very varied approaches
subsequently adopted by the various syndicates suggest that no common strategy was
agreed at these summits.
In general the yakuza syndicates based in the Kant region did not react as
dramatically to the Btaih as those from Kansai. One reason was that the eastern
groups had already taken greater steps towards creating corporate facades than those
in the west. Another was that the polices number one target was, and remains, the
Yamaguchi-gumi. Tokyo-based gangs therefore felt less threatened by the new law.
Hence the remarks of one Tokyo-based boss that the new law might be a nuisance but
it wont really have much effect on us yakuza, well just take new titles like president
and manager (Reuters News Service 2 March 1992). This differs from the widespread
feeling of paranoia amongst Yamaguchi-gumi members at the same time (interviews
with criminal defence lawyers, Osaka, 1998).
This difference is also reflected in yakuza courtroom tactics. Although both the
Inagawa-kai and the Sumiyoshi-kai both gave evidence at pre-designation hearings,
they did not dispute the decision. Tanaka Keiz, representing the Inagawa-kai,
demonstrated this more accommodating nature stating, whatever the law might be,
the laws decided on by the state are solemnly and humbly accepted (Yamada 1994b:
247).
In contrast, the Yamaguchi-gumi, the Kyoto-based Aizu Kotetsu and groups in
Fukuoka and Naha launched legal challenges, arguing that the new law violated the
constitutional principle of equality before the law. The Yamaguchi-gumi dropped its
case after more than two years, and none of the three cases pursued to a judicial
conclusion met with success.
One exception to the pattern of legal resistance in western Japan was the
Sakaume-gumi, a small Osaka-based gambling group well known for its good
relations with (and favoured treatment by) the authorities. At its pre-designation
public hearing, the top executive representing the gang stated that it is the duty of the
people to obey the laws decided on by the state. If the Sakaume-gumi fulfils the
conditions for designation, then we have no option but to accept it (Shkan Jitsuwa
14 October 1999).

4. Post Bubble and Btaih

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4.1 Membership Trends

Police statistics suggest that, between 1991 and 1995, total yakuza numbers fell from
91,000 to 79,300 (13%). Unfortunately, these figures are problematic. Some groups
pretended to expel members with a criminal record, thereby falling below the legal
threshold for designation; those expelled retained their gang links but posed as
business brothers or right-wing political/social activists. Such a decline in numbers
does not therefore represent a net benefit to society. Perhaps more promisingly, in the
Yamaguchi-gumi a number of gang members that were not pulling their weight were
genuinely expelled (Yamada 1994b: 258). Here the new law was a handy pretext for
reducing staff in response to the post-bubble economic conditions. However, given
that these were generally the least able individuals, with correspondingly low chances
of legitimate employment, the social impact of this restructuring might actually be
negative: these individuals are likely to continue their criminal careers but now
without gang-imposed restraints on their behaviour.
Since 1995, the yakuzas numbers have started to grow modestly and, at the
end of 2001, were estimated at 84,400 (Bryokudan Taisaku-bu 2002b). Of these
roughly half (43,100) were full members (kseiin) though over the last ten years
there has been a trend for the proportion of kseiin to decline as gangs and members
alike find it advantageous to adopt a lower profile, reflecting the more hostile legal
environment. Of the 43,100 kseiin, 91.4% are members of designated bryokudan.
The one aspect of yakuza membership trends that does actually look promising
is their long term demographic change: the yakuza are ageing faster than Japanese
society as a whole (Bryokudan Taisaku-bu 2002a: 36-7), suggesting that young
males are ceasing to find gang membership an attractive career choice. Given that
yakuza ultimately depend on the credible threat of physical violence, this will
eventually become a significant problem for them.
Between the introduction of the Btaih and the end of 2000 the police and the
Btsuisen managed to persuade 5,310 gangsters to leave their groups. Not all gang-
secession is genuine, however. Many of those that agree to quit their gangs are in
prison at the time and will receive shorter sentences if they agree to leave (interview,
Kanagawa prefectural police, 1998). Nor is going straight an easy matter for those
who try it: out of the 5,310 leavers, only 640 (12%) were placed in jobs through

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associations set up by the police for this purpose (Keisatsu Hakusho 2001: 139); and
in the two Btsuisen visited during 1998 (Kanagawa and Iwate), roughly half the
gang-leavers placed in jobs had since quit.
Although the double punch of bubble and Btaih has damaged the
collective earnings of yakuza, this does not necessarily encourage gang-secession
since the opportunities in legitimate activities are often worse. As mentioned above,
the yakuza economy is consistently more dynamic and innovative than that of the
upper-world. Nor does secession necessarily benefit society unless those who try it
can be re-integrated into non-criminal society, which as we have seen is no easy
matter.

4.2 Disbandment

Between 1991 and the end of 2000, 1,971 gangs, with a total of 16,350 kseiin,
disbanded or disappeared. However, the overall number of kseiin declined by only
6,600, suggesting that many displaced yakuza were reabsorbed by other groups. As
with group-secession, disbandment does not benefit society if former members are
reabsorbed in other gangs, become unaffiliated criminals or reorganise as a front
company, spurious social movement or political group.

4.3 Oligopolisation, Peaceful-Coexistence and Strain

Since the mid-1960s the big three syndicates have accounted for a growing proportion
of total yakuza numbers. This process partly reflects increased police action against
yakuza, which disproportionately affected small groups with undiversified sources of
income. Aggressive syndicate expansion was quelled somewhat in the early 1990s by
yakuza fears of the Btaih, but some smaller groups have voluntarily joined one of
the big syndicates in order to exploit their superior brand identity. Also some Kant
gangs have joined one of the Tokyo syndicates to avoid being taken over by the
Yamaguchi-gumi.
As of the end of 2001, the combined strength of the big three (including jun-
kseiin) stood at 58,200 or 69% of the total. The Yamaguchi-gumi alone accounted
for 36,300 men or 43% (Bryokudan Taisaku-bu 2002b). The behaviour of these three
groups is therefore of central importance to the yakuza world as a whole.

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Since the early 1990s the big syndicates have made a show of attempting to
reduce the level of inter-gang conflict, largely in response to the Btaihs provision
for compulsory gang-office closure. Police statistics show a distinct improvement in
this respect; the mean annual incidence of inter gang conflicts in the decade following
1991 was 8.9, that of the preceding eight years was 28.8 (Bryokudan Taisaku-bu
2002a: 15). 14
The greater diplomatic efforts of the big syndicates have been cemented by the
tying of brotherhood bonds between senior members of these and other groups. In
1993, the leaders of the Yamaguchi-gumi and Aizu-Kotetsu formed a relationship
(shinseki engumi) in order to try and stop their two groups fighting (Yamaguchi-gumi
sub-groups wanted to profit from the construction work on Kyotos 150 billion new
railway station). In 1996 a three-way sakazuki (ritual exchange of sake to seal an
alliance) took place between the bosses of the Kyoto-based Aizu-Kotetsu, the
Hiroshima-based Kysei-kai and the Yamaken-gumi (the most powerful group within
the Yamaguchi-gumi). The same year the leaders of the Yamaguchi-gumi and
Inagawa-kai, the two most powerful yakuza figures in Japan, also held a sakazuki
ceremony. Given that Kant-based groups already had an association promoting good
inter-group relations (the Kant Hatsuka-kai), by the late 1990s all but a small
minority of yakuza gang-members were in some way tied into amicable mutual
relations.
Such an arrangement might be expected to work if there were satisfactory
economic opportunities for all gangsters. Unfortunately, in the 1990s, this was not
true. Even in good times, much yakuza work involves protecting consumers from
other yakuza. Hence yakuza alliances are bound to come under strain. The efforts to
maintain peace between the Yamaguchi-gumi and the Aizu-Kotetsu were largely
unsuccessful due to the continued efforts of the Nakano-kai (a large Yamaguchi-gumi
sub-group) to muscle in on construction work in Kyoto. In July 1996 (just five months
after the three-way sakazuki) Aizu-Kotetsu hit-men attacked Nakano, though his
bodyguard foiled the attempt and kill two of the assailants.

14
By international standards, Japanese inter-gang conflicts are mild affairs. Typically they involve
ritual exchanges of shots at the offices and homes of the protagonists without causing significant loss of
life. Between 1991 and 1998 gang conflicts averaged 9.6 cases and 4.6 deaths per year, or 0.48 deaths
per conflict. In part this reflects the lack of military quality weaponry in Japan, but perhaps more
crucial is the mature, oligopolised state of organised crime in Japan; violence tends to be used more by
gangs that are rapidly expanding and trying to establish their reputation.

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Though this incident called into question the effectiveness of leaders


exhortations not to cause trouble, subsequent events showed the new diplomatic spirit
in action. A peaceful reconciliation was rapidly brokered and a senior Aizu-Kotetsu
lieutenant offered an amputated finger by way of apology though if the pugnacious
Nakano had not been in police custody at the time, settlement would have been harder
to achieve.
Yakuza harmony has also come under pressure within the Yamaguchi-gumi,
peaking in 1997 when Takumi Masaru, the Yamaguchi-gumi wakagashira and
financial brain, was killed by Nakano-kai gunmen. After a period of indecision,
Nakano and his group were finally expelled with no hope of rehabilitation. Despite
stern edicts prohibiting retaliation, attacks on the Nakano-kai continued.
The attraction of Tokyos wealth to hungry Yamaguchi-gumi members has led
to a number of running conflicts between Yamaguchi-gumi sub-groups and Tokyo-
based gangs, while economic hardship has severely impaired the ability of the Kant
Hatsuka-kai to maintain harmony among the Tokyo gangs. In 2001 there was a rash of
incidents amongst Hatsuka-kai members, most notably the shooting of two
Sumiyoshi-kai executives by Inagawa-kai members at a gang funeral in Tokyo. In the
case of a long-running internal feud at the Tokyo-based Kokusui-kai, the disputants
rejected offers of mediation from fellow Hatsuka-kai members. Meanwhile, the
penalties for causing trouble within the Hatsuka-kai are now less rigorously applied.
All of this suggests that economic hardship is destabilising the yakuza world. Of
course these conflicts inevitably result in increased police intervention, further
exacerbating business conditions.
We can see here the dilemma of large syndicates: their interests do not always
coincide with those of their lower-ranking members and sub-groups. Directives to
sub-groups after monthly meetings continually instruct them to refrain from
antagonising other groups, dealing in drugs or getting involved with foreigners, which
suggests that such directives are equally continually flouted.

4.4 Injunctions and Violations

From 1992 to 1999 the number of injunctions issued under the provisions of the
Btaih each year increased rapidly as victims learned how to make use of the new

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law. In 2000 the number of injunctions15 issued fell for the first time (from 2,300 in
1999 to 2,280). This suggests that knowledge of this law has been fully disseminated
and that barring changes in yakuza behaviour, injunctions will remain stable at around
their current level.
Perhaps more interesting than the number of injunctions is the trend in
injunction violations. Until 1995 only one injunction had been violated. In the
following five years injunction violations numbered six, nine, eight, seven and four.
Given the number of injunctions issued, these numbers are very low, suggesting that
Btaih injunctions are largely effective when issued.

4.5 Arrests

For all yakuza groups (including jun-kseiin), arrest figures are remarkably stable,
averaging around 32,000 over the last decade. The 2000 figure of 31,054 arrests was
fully 37% of the total estimated yakuza population of 83,600 that year. However,
whilst the police arrested 32,511 yakuza members in 1999, that year the prosecutors
processed only 8,077 yakuza, of whom 6,213 were prosecuted (Keisatsu Hakusho
2001: 131; Hanzai Hakusho 2000: 523). The vast majority of these arrests therefore
amount to no more than short, admittedly unpleasant, spells in police custody.
Perhaps the most remarkable trend in the arrest statistics over the 1990s is the
widening gap between the arrest probabilities (arrests/members) for the big three
syndicates versus all other gangs. These show that over the decade, members of the
big three gangs became considerably more likely to experience arrests, whilst other
gang members became far less likely to be arrested. Moreover this rise in the former
figure was overwhelmingly due to increased arrests of Yamaguchi-gumi members.16

Table 2. Arrest Probabilities 1990-2000

1990 2000
Big Three Syndicates 0.50 0.79
Non-big Three Gangs 0.29 0.14

15
There are two different types of injunction chshi meirei and saihatsu bshi meirei, in the interests of
brevity they are here treated collectively.
16
These figures are based on arrests of jun-kseiin and kseiin, which are not broken down between
individual syndicates in the published official statistics. However, graphs show flat arrest figures for
the Inagawa-kai and Sumiyoshi-kai and a sharp rise for the Yamaguchi-gumi.

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Source: Derived from police white papers, dividing number of arrests by number of members.

These figures suggest that rather than making more aggressive use of the existing
criminal law to combat the yakuza in general following the introduction of the
Btaih (as the Keisatsu Hakusho routinely assert) the police have been increasingly
targeting the Yamaguchi-gumi.

4.6 Crime Trends

As mentioned earlier, yakuza businesses are continually developing as new market


opportunities open up and old ones are closed due to economic change or stiffer law-
enforcement. We can see both these mechanisms at work following the imposition of
the Btaih. Minb-type activities have become harder to carry out, especially for the
least skilled yakuza, who lack the contacts and expertise to engage in financial
racketeering. Many of these lumpen-yakuza have therefore become more reliant on
amphetamine dealing or organised theft, two activities traditionally disparaged in
yakuza society.
Since the middle of the 1990s we have sees a significant increase in annual
seizures of amphetamines; in 1999 and 2000 these jumped off the scale at 1,976 and
1,027 kg respectively (in only two previous years, 1996 and 1998, had seizures
exceeded 500 kg) (Keisatsu Hakusho 2001: 84). Despite these massive seizures, street
prices fell throughout the late 1990s suggesting that retail supply was largely
unaffected. Supply has risen with North Koreas attempts to produce amphetamines to
earn foreign currency. However, importation and distribution is a yakuza-run affair:17
typically about 40% of all drugs-related arrests are of yakuza members and 25% of all
yakuza arrests are for drugs-related offences. The closure of other economic
opportunities has led to growing involvement in drugs.
Amphetamine-related arrests have also risen fairly steadily since 1994,
standing at 18,942 in 2000, with 50% of those arrested being first-timers. One new
feature of the current amphetamine abuse epidemic 18 is the high proportion of young
customers, particularly school-age girls, which suggests that dealers are selling with
17
Despite the lingering perception of them as a major part of the drug economy, arrests of Iranian drug
dealers (175 in 2000) are a tiny fraction of those for yakuza dealers (7,729).
18
The first epidemic period lasted from 1945-55 and the second from 1970 to the late 1980s. The third
started in the mid 1990s and, according to the 2001 Keisatsu Hakusho, is still continuing.

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far less discretion than before. Use of mobile telephones and the Internet in this trade
are also new factors.
Another development in lumpen-yakuza activity in the 1990s was growth in
organised theft. Arrests of yakuza for theft almost doubled between 1991 and 1997,
from 13,016 to 24,838, and this the police do accept is a side-effect of the Btaih
(Yasuda 1998: 27-8). In particular the number of such cases involving ten or more
individuals jumped from below ten in the preceding years to 60 in 1997 (Jitsuwa
Jidai December 1998).
Of particular concern is the increase in violent, professional robbery, hitherto
practically unheard of in modern Japan. In 1993 there were six robberies of armoured
delivery cars compared to five in the preceding three years combined. In 1994, there
were nine, including one in Hygo prefecture in which two robbers made off with
541 million in cash (Keisatsu Hakusho 1995: 153). In the peak year of 1997 there
were 24 such raids, including 17 in which firearms had been discharged. In
subsequent years the number of raids has stayed in double figures (Keisatsu Hakusho,
passim).
Gangs are also establishing specialist groups for stealing luxury cars to order
and providing them with fresh key cylinders, number-plates and papers before selling
them on for 15-20% of show-room price. One 23-man group (Yamaguchi-gumi
related) processed over 80 cars in this way before being arrested. Other groups
specialise in diggers and trucks for markets in China and Russia, where a truck can
fetch as much as 3 million (Jitsuwa Jidai December 1998, Iwate police interview,
1998). In 1999 car thefts jumped to over 43,000 after a decade of stability around
35,000 per year. In 2000 they reached 56,205 (Keisatsu Hakusho 2001: 114). Britain,
which like Japan drives on the left, is also a market for stolen Japanese vehicles.
Whilst small-time yakuza have become increasingly reliant on drugs and theft,
bigger players have also developed new business activities. Some, such as illegal
dumping of industrial waste,19 are not particularly sophisticated; others are. Of the
latter, Internet pornography and credit card fraud are perhaps the most notable. The
National Consumer Affairs Centre of Japan has received mounting complaints about
spurious and excessive bills for Internet service in recent years; in an eight-month
period in 2001 these numbered 12,944 (Mainichi Shinbun 12 February 2002). The

19
Strictly speaking this business is not new. It has however grown significantly; between 1992 and
1998 arrests rose from 56 to 248. In 2001 the figure was 204 (Bryokudan Taisaku-bu 2002a: 28).

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intimidating ways in which these firms enforce payment, and the seamy nature of the
sites involved, is strongly suggestive of yakuza involvement in these fake charge
scams.
Some yakuza also jumped on the dot-com bandwagon. In October 2000, a
senior executive of one of the first companies registered on Tokyo Stock Exchanges
Mothers market (a venture capital market) was arrested for kidnapping a colleague
after disputes over company strategy. The arrested man, subsequently found guilty,
was also a business brother of a yakuza gang. According to police sources cited in the
Financial Times (10 April 2001), both NASDAQ Japan (in Osaka) and Mothers have
had other yakuza-related incidents in recent years. During the dot.com bubble, the
standards for listing on these markets were less stringent than the more established
exchanges and this made them relatively easy targets. Yakuza groups currently seem
to be paying less attention to this market. The exchanges have tightened listing rules,
and, perhaps more significantly, the bottom has fallen out of the dot.com market.

5. Conclusion

Over the last decade, the yakuza have had to contend with the double punch of the
collapse of the bubble and the introduction of the Btaih. The rapid evolution of new
types of business in response to this changed environment illustrates the highly fluid
nature of organised crime. In the case of some businesses, such as auction obstruction,
the post-bubble recession is clearly the major factor, but elsewhere the effects of the
economic and legal factors are too closely entwined to be analysed separately. A
harsher economic environment made it harder for companies to pay off yakuza; the
Btaih made it easier for them to stop. Both factors tended to push yakuza in the
direction of alternative activities such as amphetamines and organised theft.
Given that the Btaih has had these socially dysfunctional side effects,
should we condemn it? No. The Btaih has applied judicial controls to the formerly
grey area of minb, providing legal redress in cases of purely predatory violent
demands in which no service is provided to the victim. The growing numbers of
Btaih injunctions, combined with the extremely low rate of injunction-violation, are
Btaih successes, albeit within limited parameters.

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However, when the victims of yakuza violent demands are themselves


operating outside the law, or on its margins, recourse to the Btaih is not an option.
Illegal foreign workers and street prostitutes thus remain subject to yakuza predation.
Moreover, the continuing demand for the yakuzas protective services from various
sectors of mainstream business make it highly unlikely that any statutory measure will
put an end to yakuza interaction with the legitimate world.
As we saw from the immediate reaction of the various syndicates to the law,
the threat of gang-office closure at times of inter-gang conflict has generally been an
effective inducement for gangs to quickly and peacefully resolve their differences.
The two summits of 1991 and the subsequent sakazuki diplomacy suggests a trend
for the western syndicates to adopt the less confrontational norms of the Tokyo-based
groups. This, too, is a direct consequence of the Btaih.
Perhaps the most significant effect of the Btaih, however, has been
psychological. For the first time a law has specifically identified the yakuza as a social
evil. This has affected the mindsets of the police, citizens and yakuza alike. Outside
the illegal vice markets, organised crime is no longer seen as inevitable. The yakuzas
victims are increasingly launching civil suits against their tormentors and the
prosecutors have taken a more adventurous line in indicting bosses when, for
example, their bodyguards are armed.
Further pressure on the yakuza comes from three new anti-organised crime
laws passed in 1999, which provide for increased use of wire-tapping and sting
operations in serious crimes, increased penalties for such crimes and wider scope for
seizure of assets of organised criminals. It is too early to assess the impact of these
laws. However, if rigorously implemented, they will increasingly force the yakuza to
conceal their activities and identity, becoming more like gangs in other countries with
similarly strict provisions.
While applauding these blows against the yakuza, we should be aware of
certain risks. As Schelling (1984: 172) observes, one of the advantages of a well-
established set of organised crime groups, each with a long time horizon, is that they
are likely to internalise costs that would be externalities to individual criminals. They
therefore have a greater interest in not antagonising the authorities unnecessarily. We
can see this illustrated most clearly in Tokyo with the Kant Hatsuka-kai, but with the
coming of the Btaih the western syndicates have also increased their diplomatic
efforts. However, economic hardship has left the leadership of these syndicates

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struggling to maintain stability and adherence to the policy of peaceful coexistence


among member gangs.
At a delicate time like the present, the authorities are faced with a difficult
paradox. As we have seen, their principal targets have been the Yamaguchi-gumi, and
to a lesser degree the two big Tokyo-based syndicates, the Inagawa-kai and
Sumiyoshi-kai. In a sense this is both natural and right, for these are the strongest
centres of underworld activity in the land and account for two-thirds of the yakuza
population. But at the same time these giant syndicates are also the main guarantors of
stability in the yakuza world: the only organizations with the power and authority to
enforce non-violence pacts. There is a danger that if they start to fragment under the
impact of the Btaih and the recession, we could see internecine warfare and a
proliferation of breakaway groups willing to engage in the dirtiest of businesses and
eager, as newcomers, to establish a reputation for willingness to use violence. This
would be a severe challenge to the effectiveness of the new laws and the courage of
those entrusted with enforcing them.

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