Sure Winners in 2020 Tokyo Olympics? Gangsters


As Japan bets on a big economic boost from the 2020 Olympics, it might be dismayed by what’s happening right now in Russia. Moody’s doubts the Sochi Games will be much of a plus for that economy.

Yet there is one sector of Japan’s economy sure to profit handsomely from Tokyo 2020: mobsters. Tokyo won’t spend anywhere near the $50 billion Vladimir Putin did turning a Black Sea town into a global tourist destination. More likely, preparations will involve around $4 billion or $5 billion of construction projects over the next six years. And where there are cement trucks, there are gangsters.

What worries yakuza expert Jake Adelstein isn’t the cash that organized-crime groups will be extorting below the radar screen. That’s a given in a nation in which gangsters operate legally, pass out business cards and enjoy lucrative relationships with government officials. Adelstein’s concern is how much of this dirty dealing will happen in relatively plain sight and on a very grand scale ahead of what he calls the “Yakuza Olympics.”

Writing in the Daily Beast, Adelstein details Japanese Olympic Committee Vice Chairman Hidetoshi Tanaka’s alleged yakuza ties. Adelstein, author of the 2010 memoir “Tokyo Vice,” also revisits allegations that former Prime Minister Yoshiro Mori, the man heading the Tokyo 2020 organizing committee, has traveled in similar circles in the past.

“The controversy doesn’t give the 2020 Tokyo Olympics quite the ‘clean and crime-free' image that Prime Minister Shinzo Abe promised when luring the event to Japan,” Adelstein argues.

Corruption in Japan has increased since 2011, when a record earthquake prompted one of modern history’s biggest reconstruction efforts. In 2011, Japan’s ranking out of 178 nations in Transparency International’s corruption perception index was 14 — just behind Germany. But in 2013, Japan was 18th, coming in behind Barbados and Hong Kong. Why? Blame a sudden return to “concrete economics” in a nation that has tried for years to shake a phenomenon that lends itself to large-scale graft.

Tokyo 2020 adds an entirely new dimension to the public-works boondoggle. A surge in yakuza activity will deaden any economic benefits Japan might have hoped to win from the games. Spending public funds unwisely limits the multiplier effect, whereby stimulus trickles down and helps households. The intersection of politicians, contractors and yakuza also is where economic reforms go to die. A possible leap in graft at the highest levels could further complicate “Abenomics,” taking the oomph out of games-related fiscal stimulus.

When the government has tried to sever the shadowy ties between organized crime and corporate Japan, the construction industry has always been the first target. As one Tokyo police source told Adelstein, the yakuza’s cut on construction projects is typically about 5 percent. But with friends in high places, insider information could raise that take exponentially as yakuza front companies bid on lucrative contracts and also scam any number of subcontracting deals that might allow for double billing.

Look, corruption is to the Olympics what Nike contracts are to athletes — there’s no way of avoiding either. But Japan could significantly raise the bar. “The nexus of massive construction projects, bureaucrats, politicians, businessmen and yakuza are as revealing about Japan as they are about Italy and Russia,” Jeff Kingston wrote in his 2010 book Contemporary Japan. Historically, he added, nothing enriches yakuza bosses like construction, “given that during the 1990s the public-works budget was on par with the U.S. Pentagon’s budget and remains quite high despite huge cutbacks.”

Well, happy days are here again for Japan’s goodfellas. Given how they’ve been squeezed from all angles — including the Barack Obama administration’s moves to freeze assets and impose sanctions — expect an all-guns-blazing effort to boost their construction take. Japan’s public debt is already twice the size of the economy, and the nation will be borrowing more to pay for 2020. Even if Tokyo doesn’t approach Sochi’s price tag, you can bet Abe’s government will pay far, far more than it now estimates.

In recent years, politicians pledged to break the construction-industrial complex that enriches gangsters more than Japanese families. Tokyo 2020 will test that commitment — and Japan’s reputation, too.

William Pesek is a Bloomberg View columnist.

© 2014, Bloomberg News.

Read more From Our Inbox stories from the Miami Herald

  • French food on a slippery slope

    Before my first visit to France, around 45 years ago, I was told that you couldn’t find bad food there if you tried. I was of limited experience, so even a hot dog jammed into a baguette bore witness to that “fact.”

  • Even when the VA does act, it still fails our veterans

    Jymm’s preferred attire is a skin-tight Minnie Mouse T-shirt with bright pink windbreaker pants. Even when not sporting his outfit of choice, he dons short shorts and shirts with holes in them, because that’s what he finds most comfortable. His Santa Monica apartment was furnished with broken chairs and tables he dug out of dumpsters. He held onto his favorite old drinking glass long after it broke. Jymm is a Vietnam veteran (who holds two Purple Hearts), and he’s definitely a character. But he’s never hurt himself or anyone else.

  • Blue-state disgrace

    Immigration is a complex problem. So is the long-term question of how the United States should handle the influx of tens of thousands of children from Central America. Beyond the legal mandates, we owe them basic human decency. On the other hand, to say that they should all simply stay here for good begs big questions about encouraging more children to make this journey, and the rights of all the people abroad who are waiting their turn in line. Unless you believe in open borders, it’s all thorny. What seems right for an individual child can seem wrong systemwide.

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category